Business consultancy project

Internet of Things.

The idea of the internet of things (IoT) contains the establishment of seamless connectivity between physical and digital objects without human interference. The interaction between human to object and object to object are being transformed through the existing internet connections. The large scale of IoT devices is using cellular and non-cellular technologies. The non-cellular technologies connection is being provided by Bluetooth, WIFI, and LOR while the cellular connection is maintained by Mobile Broadband connectivity. (IoT connectivity comparison, 2019)
The evolution of high-speed internet and the extensive growth of the IoT devices impulse mobile telecom industry to transform the infrastructure and build up new business opportunities. Mobile operators are intending to accomplish the new capabilities by enlarging the 3G and 4G network capacity, according to 3GPP standardizations. (IoT Connection Efficiency Guidelines, 2014) The development of the LTE (Long Term Evolution) is also enforcing the foundation of IoT as a new value stream for mobile operators worldwide. IoT is playing a pivotal role in defining the differentiating strategy through innovation inculcation. (Mobile IOT, 2019) The mobile operators in the developed world are adding the IoT to their product lines and modernize the infrastructure correspondingly. Vodafone strengthened the IoT connection all its European footprints, and the other operators such as AT&T in the USA and NTDOCOMO in Japan were the pioneers in the deployment of IoT connection. Besides, China and Indian mobile operators with the most substantial subscription numbers are planning the enlargement of IoT connections, and according to the GSMA estimation, the highest revenue proportion will be obtained in Asia-Pacific region due to economies of scale. The overall revenue estimation of the IoT service in Y 2025 is being considered to reach 1.1 trillion. (Global Mobile Trends, 2018)
Meantime, the deployment of the IOT requires the following operator and market potential.

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  The expanded 4 G(LTE) and 5G Network
  
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  The reliable infrastructure
  

According to the projection, the number of IOT devices will be reached to 21 billion on Y 2020. However, the large scale of expansion will be congregated in the developed countries where the penetration of smart devices is well developed, and mobile operators’ revenue can be generated through economies of scale (Telecoms, 2016)
IoT service implementation requires an enormous investment from mobile operators. For the flawless of interactive exchange, the 5G network must be expanded as 4G traffic is not always capable of meeting all IoT device requirements. Also, operators with 3G and 4G network coverage advantage must adopt low- power wide area network (LPWAN) technologies for complementing of IoT service to their network infrastructure. Simultaneously, the Network Functions Virtualization (NFV) cloud technologies should be implemented for the sustaining the high-speed interactions between objects. Besides, most IoT devices are using low bandwidth, and minimal (kilobyte) increments are transferring data consumption, and the profit can be acquired through economies of scale.
In comparison with developed countries, the IoT infrastructure has not well developed in Azerbaijan. Consequently, the IoT implementation is being projected for the long-term return of investment (ROI).
Azercell is expanding 3G and 4G network, however, considering Azercell 4G coverage has reached to 48% in Y 2019, and 5G network has not developed yet, Azercell will require the additional requirements for the deployment of IoT infrastructure. For the acquiring IoT as a differentiated feature, Azercell must enlarge the 4G network and start 5G coverage integration. Besides, for the installation of NFV and LPWAN capabilities, Azercell will require OPEX expenses.
Throughout the consultancy project, the IoT service implementation has been discussed with technical and commercial team management correspondingly. Considering the high investment for IoT service implementation and low ROI from the service consumption it was ubiquitously agreed the deployment of IoT could be planned in the long run, and for the acquiring new value stream, the mobile financial services can be considered as a new value stream for the next 12 months.

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