Technavio analysts forecast the global telecom IoT market to grow at a CAGR of more than 42% during the forecast period, according to their latest report.
The research study covers the present scenario and growth prospects of the global telecom IoT market for 2016-2020. To determine the market size, the study considers revenue generated from product, customer, premises, and supply chain monitoring.
Premises monitoring will be the fastest growing application segment, showcasing a CAGR of almost 53% during the market forecast period. Inventory visibility plays a major role in business optimization, and adoption of beacons for real-time tracking of inventory is gaining mainstream attention. It improves security by helping keep track of critical equipment, individuals, activities, and asset management.
Abhishek Sharma, one of the lead market analysts at Technavio for M2M and connected devices, says:
“AT&T, one of the key vendors is the telecom IoT space, provides quality wireless voice and data communications services to its customers. As of March 2015, they had 22 million connected devices in their network. The company offers connected experiences like connected cars, connected cities, connected homes, and connected health and fitness. There is an increasing demand for such solutions, encouraging more vendors to enter this market.”
Technavio analysts highlight the following four factors that are contributing to the growth of the global telecom IoT market:
- Rapid deployment of smart grids
- Growing adoption of intelligent transportation systems (ITS)
- Increasing demand for network capacity to access connected services
- Increased number of mobile computing devices
Rapid deployment of smart grids
Countries like India, the US, China, and France have been implementing ambitious smart grid plans. Smart grid applications like supervisory control and data acquisition (SCADA), smart energy meters, and other communication networks enable utilities to have complete control in managing digital assets. China is currently the leading destination for smart grid solutions with more than USD 4 billion invested into the market in 2013 alone. By 2017, every household in the country is expected to be equipped with smart meters.
With the increasing awareness of smart home solutions, the sales of smart sensors, thermostats, and plugs is expected to globally reach around 80 million by 2018. Home automation has had a positive impact on the real estate business, and has resulted in customers increasing their interest towards automated homes. To ensure home security, remote surveillance via smart TVs are gaining momentum. This scenario has led to smart TVs accounting for a 49% share of the telecom IoT market share in the US and Canada.
Growing adoption of intelligent transportation systems (ITS)
“Safe, efficient, and accessible public transportation has become a top priority with increasing congestion on urban roadways. Intelligent transportation systems provide application-enabling solutions to connect public transit operations securely. These systems enable operators to securely gather, analyze, and distribute networked resources in real time,” says Abhishek.
Another important segment of ITS is smart parking for different combination of pricing and results-based payments. Also, most of these parking providers are investing in recharging stations in their parking areas due to increase in sales of electric vehicles, which is a very good source of revenue. With intelligent solutions like these on the rise, the smart sensors network is on the rise. Applications like traffic management, vehicle diagnostics, and video surveillance require advanced network connection systems for proper functioning. This is expected to fuel demand for 4G LTE and even 5G networks.
Increasing demand for network capacity to access connected services
The increasing number of connected devices is creating a proportionate demand for faster mobile broadband communication to experience seamless integrity of these devices. Internet connectivity becomes an important access channel to support communications over large-scale IoT devices. The roll out of 4G LTE-M and LTE-U, and 5G networks is expected to facilitate faster transmission of higher volumes of data in these smart ecosystems.
In the market forecast period, an increasing number of IoT applications like traffic management, vehicle diagnostics, and video surveillance will require high-speed data connections. Analysts at Technavio expect that this will push the number of IoT-connected devices to reach nearly 32.5 billion by 2020.
Increased number of mobile computing devices
Computing devices are needed on a day-to-day basis to have a hassle-free working of our daily lives. They are used to access social networking apps, read the news, surf the web, and check email. This, along with the healthy growth of IoT is driving the telecom IoT market. In 2015 alone, the unit shipment of mobile computing devices reached 1.91 billion units. The introduction of low-end phones like Xiaomi and OnePlus, which are packed with features, is leading to a higher adoption of smartphones worldwide. With such a high rate of penetration of smart devices, most business users and individual users are dependent on the internet to fulfill all their business and personal needs. This is driving the growth of advanced mobile technologies, which is likely to increase the adoption of telecom IoT services among business customers.