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Internet of Things Market Development Trends for 2017

It's been a busy year for those telecom service providers who are active in the Internet of Things (IoT) market. Currently, IoT accounts for less than 1 percent of most network operator's total revenue, according to the latest study by Analysys Mason.

It will take until 2025 for IoT to exceed 5 percent of service provider total revenue, even starting from 1 percent and growing by 20 percent per year (assuming flat top-line revenues), which is roughly in line with current growth rates for their IoT businesses.

Meanwhile, telcos may explore acquisitions or investments. Verizon was one of the few operators to make a move in 2016, investing over $3 billion on its acquisitions of Fleetmatics, Telogis and other smaller firms. More network operators may follow Verizon's lead in 2017.

Service Provider Outlook for IoT in 2017

Almost all presentations on 5G mention IoT, but few presentations on IoT mention 5G. IoT vendors are already developing solutions. Massive M2M connectivity has been one of the key use cases proposed for 5G, but this will likely receive less attention in 2017.

The focus for 5G may instead be on nearer-term use cases, such as high-speed access in the final mile, as proposed by Verizon. 5G will need to be significantly les expensive than NB-IoT to transform IoT and it's unlikely in the near term.

3GPP technologies (such as NB-IoT and LTE-M) have high barriers to entry, which gives cellular operators an advantage. However, technologies in unlicensed spectrum (such as LoRa) have lower barriers to entry, which opens the market to new wireless technology competition.

Fixed telecom operators have customer bases and other assets, which may encourage them to compete in this market. Fixed operators, such as Comcast (USA) and Dr. Peng (China), have recently announced LoRa networks. Further announcements may come during 2017.

Government regulators are interested in IoT technology, given the recent high-profile DDoS attacks. However, the impact of regulation may be limited in the near term. New regulation will take time to implement, and millions of devices have already been deployed.

Moreover, vendors and telecom service providers in the IoT industry will likely strive to agree on frameworks and self-regulate in 2017, in order to stem the need for imposed government regulation.

Most autonomous vehicles are independent entities that are driven using a combination of on-board sensors and highly detailed maps. That said, the overall transport system can be improved by real-time information from vehicle to vehicle (V2V), and vehicle to infrastructure (V2I).

Advances in technology have fundamentally changed the economics of providing energy. They're disrupting the historical model for distribution through development of the service operator or 'on-demand utility' model. More utilities to embrace this new model in 2017.

There will be an increased focus on IoT investment models to support the implementation of city-wide energy efficiency systems. Cities represent 78 percent of global energy demand, placing the smart-city concept at the heart of the climate change agenda.

The UN believes that investment of $53 trillion in city infrastructure and operations is necessary by 2035 to achieve the COP 21 objectives. New investment models will be critical in transitioning from IoT trials to full-scale smart city operations.

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