The company said it has started shipping a dedicated IoT SIM called V-Sim by Vodafone as standard with IoT-enabled consumer electronics products; the SIM card will also be offered by third-party retailers next year. The corresponding V by Vodafone smartphone app gives a single and intuitive overview of all IoT-enabled products registered to an account, and customers simply need to scan a QR code on a product’s package and add the monthly fee to their existing Vodafone mobile accounts to activate the product.
The products come with automatic straight-out-of-the-box connection to the international Vodafone IoT network in any of 32 countries and a single fixed monthly price plan for each item. The company said existing mobile customers in Germany, Italy, Spain and the U.K. can already purchase any of the launch products in selected Vodafone stores or online. The operator will launch additional IoT categories in 2018, along with a new online product marketplace open to IoT developers with a view to extending the product choice for customers.
With IoT coming on fast internationally, we think it is a good move for any mobile operator to get involved, and for a multinational operator with vast reach and resources, such as Vodafone, it is a strong strategy to get heavily involved. Going beyond simply providing the connectivity for IoT, Vodafone is producing its own devices running on its own system, in essence branding and owning a significant slice of this global market. According to the operator, by 2020 there will be more than 370 million consumer electronics and smart home devices in the countries in which it operates, up from around 50 million today.
For the moment, at least, it does not appear that Vodafone’s IoT products are unique or transformative; Vodafone customers will be able to find the same or similar products elsewhere and may do so at will. But Vodafone’s strategy of creating a one-stop shop that not only offers the devices for sale in the same place but also integrates them into one control system accessible through an app should make the system very attractive to its customers. Combine that with the fact that Vodafone customers already have a level of trust and familiarity with the operator—and with the fact that the billing is extremely simple and seamless—and the offer becomes very persuasive.
In the era of declining ARPU from traditional services, operators of all kinds and sizes have been looking for new revenue sources and new sources of customer relevance. With IoT, a new and very broad area of consumer (and, to some extent, enterprise) revenue opens up. By co-opting it and self-branding it, Vodafone is potentially tapping into a vital stream of revenue, strengthening its brand, and keeping customers within its ecosystem. Other large operators will likely be doing the same.
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