Internet of Things Market Summary: Mobile Operators

By Keith Tamboer

We’re going to run a series of short segments reviewing quarterly financial & operational results for companies working in IoT.  Up first are mobile operators:

IoT continues to gain momentum among mobile network operators across the globe.  With end of year 2015 reporting season more or less complete, below is a sampling of results for operators who routinely discuss and feature IoT performance in their disclosures.

AT&T finished 2015 with more than 26.2 million cellular IoT connections.  Connection growth in the fourth quarter was nearly 1.2 million and full year 2015 growth exceeded 5.2 million. Connected Car is a key driver of AT&T’s IoT growth. With relationships with nine of the top automakers worldwide, the company expects more than 10 million connected cars on its network by the end of 2017. Recent deals include plans to power more than 10 million Ford vehicles by 2020 and the multi-year renewal with BMW to provide high speed internet access to vehicles in North America.

Vodafone continues to drive Enterprise growth via Machine-to-Machine communications (M2M). M2M revenues increased more than 27% Y/Y and are estimated to be between £450M - £500M for all of 2015. In the current quarter, Vodafone restated how connections are reported to include more than just activated SIMs. Vodafone’s new method of counting connections expands its total base to 35.5 million connections, resulting in a quarterly gain of nearly 3 million. The carrier highlighted key quarterly Enterprise wins including Siemens, Centrica (a British utility), and Luxottica (one of the world’s largest eyewear companies).  Like AT&T, the Connected Car market bolsters Vodafone’s results; and the operator is working with 80% of European automotive companies.

Verizon’s full year IoT revenues totaled $690M, including $200M in the fourth quarter. Full year 2015 revenues increased 18% vs. 2014.  In the second half of 2015, the company relaunched its IoT organization which included its connected cities strategy featuring the city of Savannah, Georgia, launched Hum, an after-market, direct to consumer telematics offering, and announcement that developers have begun creating applications on its new development platform, ThingSpace.

Telefónica’s M2M connections now exceed 11.5 million. The base includes nearly 2.4 million connections in the U.K. that would be included in the proposed sale of O2 to Hutchison. The carrier reported M2M revenues of €47M in the fourth quarter and €169M for full year 2015. Connections in Brazil increased by more than 700K in the quarter and ended the year at more than 4.2 million. The company stated that new energy efficiency projects in Spain are driving growth and helping customers save more than 30% on energy expenditures.

Orange S.A. reported connections in France of nearly 3.9 million, an increase of a quarter of a million in the quarter and more than 1.5 million in the past year. Belgium/Luxembourg affiliate Mobistar added 50K connections in the fourth quarter with a connection base nearing 900K.

Sprint grew its IoT base by nearly 700K in the fourth quarter ending the year with more than 9.6 million total connections.  Sprint’s base grew by more than 50% year over year driven largely by wholesale and affiliate partners.

EE ended 2015 with more than 2.1 million IoT connections. The company, recently acquired by BT Group, grew connections by 250K over the past year.

Telstra grew M2M revenues in calendar year 2015 to approximately A$110M. The Australian company increased connections and revenue from commercial fleet and logistics. Telstra had more than 1.7 million connections at the end of 2015.

NTT DOCOMO added 800K connections in 2015 and ended the year with more a base of more than 4.6 million.

T-Mobile USA ended 2015 with more than 5.3 million connections. After adding more than half a million connections in the previous quarter, growth slowed to less than 300K in Q4.

KPN grew connections by nearly 60% year over year ending the year with 1.5 million connections. In 2015, the Dutch company set up an IoT Academy to explore and grow business opportunities in IoT. 

Proximus doubled connections in 2015. The Belgian company ended the year with more than 550K IoT connections.

More reviews of Q4 2015 to follow.