Nov 13, 2012

Vodafone and its M2M strategy

In Vodafone's H2-2012 financial results presentation, its CEO outlined Vodafone's 2015 strategy including a reference to its M2M goals. In particular, Vodafone's M2M business unit will be a part of its Group-wide Enterprise unit. This raises important questions about Vodafone's longer term goals especially in the light of a growing consumer M2M market and the reorganisation plans of several of its competitors.

According to Vodafone's strategy announcement, M2M will exist as a business unit within Vodafone Enterprise Services as illustrated below.
According to Vodafone, the intention is to consolidate its lead in M2M building on 8.8m connections and a strong contract pipeline. Vodafone intends to expand out of "traditional" M2M sectors and also to leverage its global service delivery platform.

This arrangement suggests that Vodafone is targeting a B2B type of  business model i.e. Vodafone as a supplier to enterprise customers who then deliver a connected device or service to their customers.

The M2M market, in its broadest sense, is expanding to encompass a wide variety of consumer applications - in-car information and entertainment, assisted living, wellness etc. These service concepts will drive M2M hardware volumes and the economies of scale that will enable even more affordable offerings.

In many cases, Vodafone will have a service relationship with consumers using these services; this relationship may exist via a voice 'subscription' or a Smartphone or tablet service offering. And, it may be the case that consumers use their data devices and subscriptions with Vodafone to interact with an M2M application supplied by one of Vodafone's M2M business customers. The strategic issue for Vodafone is how it will position itself in relation to B2C (go direct to the customer) and B2B2C (serve consumers through some form of partnering with enterprise customers) M2M opportunities. The latter approach is more likely because it carries a lower implementation risk and lower capital outlay if suitably structured.

In terms of its organizational model, Vodafone's strategy stands in stark contrast to the recent trend for mobile operators to establish 'Digital' businesses. These accommodate consumer M2M applications and other mobile-enabled services that address the emerging connected life-style of consumers.


  1. 10 Nov 2016 Update

    PTC’s ThingWorx Application Enablement Platform Chosen by Vodafone for Rapid IoT Application Development

  2. 15 Nov 2016 Update

    Vodafone CEO promises consumer IoT play in 2017, UK TV service delayed again

    Vittorio Colao committed Vodafone to launching a consumer IoT product directly to its customer base next year, as the operator unveiled its latest financials.

    The Chief Executive said Vodafone was looking currently at potential plays and would “definitely” bring a product to market in 2017, but did not expand on what or where such a service would launch.

    The UK-based operator has 45.4 million “enterprise” IoT connections currently, up 39 percent year-on-year, which are largely centred around the automotive sector.

    Vodafone does not count that sector as directly consumer facing as it is the car companies themselves that offer the services to drivers, rather than Vodafone.

  3. 16 June 2016 Update

    Continuing healthy growth at Vodafone and tighter linkage with IoT within VGE.

  4. 7 Nov 2017 update

    Vodafone branches out into IoT things for the consumer segment. 'V by Vodafone' is a range of devices that run on the carrier's network.

  5. 14 Nov 2017 update

    Vodafone ups guidance, offers insight into IoT role

    “Which is why we tend to focus all of our IoT solutions for both the enterprise and consumer on where there is some element of mobility, because that is where typically it’s more consistent with our strategy and less crowded,” he continued. “It’s to do with outdoor, and control, an element of security, tracking.”

    In terms of IoT potential, Colao said that obvious revenue will be dwarfed by the number of devices connected, “it will be interesting growth, important – very important – when 5G comes, but it will take time,” he said.

    “We are planting now the seeds of future growth. It’s patient investment.”

  6. 31 Oct 2019 update

    The narrative at the show went that the IoT market has gone from proof-of-concept to ‘proof-of-value’. Yes, the technology works, but the value — and the business case — are still to be understood by both sides. Importantly, however, this exercise requires less work than before. In another show highlight from the stage — again, told squarely and effectively, with none of the bright-eyed happy-tech bluster that afflicted a number of sessions, as with every show of this sort — Vodafone said that even this concept of ‘co-creation’ was tired.

    The industry has gone beyond, said Phil Skipper, the company’s head of IoT development (pictured); the IoT market is no longer so novel or messy that technology experts and domain experts — technology sellers and buyers, IT departments and OT functions — must work through protracted collaborations to create solutions from scratch. There are, it turns out, only three use cases, or ‘use classes’, said Vodafone, and one of those doesn’t even exist yet.

    Asset tracking and remote monitoring are the only ones that matter now; everything else riffs on these. The emergence of URLLC-grade 5G in Release 16 will introduce a third: a means for ultra-reliable industrial control. The old telecoms sector, which stands to deliver this third digital-change service must sell reliability-as-a-service, and be prepared to put its money where its mouth is to guarantee the risk.

  7. 28 July 2020

    Vodafone managing 15m B2B IoT connections (2020)

  8. 25 Nov 2020 update

    Vodafone UK doubles down on IoT

    UK telco Vodafone is seeking to breath life into its IoT strategy with the launch of a new range of services for businesses.

    The new bundle of IoT joy doesn’t seem to have a collective name, but it owes a lot to IoT.nxt, a company Vodafone South African subsidiary bought a 51% stake in last year. It’s designed to provide IoT sensors and devices, create a data management platform, and offer professional services to companies that lack some or all of those capabilities in-house.

    “We’re making it easy for any business to adopt IoT,” said Anne Sheehan, Business Director at Vodafone UK. “We’re taking away complexity, and making it simple to deploy, simple to manage, and simple to see the return on investment. With our colleagues at IoT.nxt we can be unique in the UK market – we’ll grow our leadership position from here, and deliver customers a digital capability that will prove invaluable in meeting the pressures of business today.”

  9. 9 Dec 2020 update

    Vodafone launches platform that promises to play nicely with dusty legacy IoT kit

    Carriers are eagerly eyeing industrial IoT as a way to fatten slender margins, and diversify from their traditional bread and butter of handset sales and subscriptions. The latest foray into this space comes from Vodafone, which plans to sell an end-to-end system to UK biz customers.

    The product is based on technology developed by IoT.nxt, a South African startup partially owned by Vodafone. In 2019, the group's South African subsidiary, Vodacom, acquired a 51 per cent share in the firm, which has developed a range of sensors, gateways, and analytics tools.

    In addition to providing the base IoT.nxt hardware and software, Vodafone will sell ongoing professional services, including a wholesale deployment and management package for those unable to administer the system in-house.

  10. 18 March 2021

    Insights into Vodafone IoT business and strategy including:
    - IOT addressable market of EUR10bn, growing at 16% CAGR
    - FY2020 connections 103 million, connections growing at over 1m per month, reaching 120m at time of March 2021 report
    - FY2020 revenue EUR735 million
    - self-built, secure platform
    - Over 500 IoT developers

    Strategy - "IoT⫶END-TO-END Easy to adopt end-to-end IoT for every business"