The Internet of Things means everything is connected. All machines will have sensors and network connectivity that will allow them to communicate with each other and exchange data. It’s the thing that will take the world from having just smartphones to smart everything.

The CEO of Orange (News - Alert) has said that by 2020 there will be “25 billion objects connected in the world” – that’s 1,000 times more connected devices than we have today. Obviously, it’s a huge business opportunity, so there are bound to be people who want to provide the service to connect all these smart machines – and Orange is jumping on the train early. The company is launching an IoT-specific network in early 2016 based on something called LoRaWAN (long range WAN) technology, which allows sensors to communicate over long distances through unlicensed wireless spectrum. This type of network is optimal for IoT because a good portion of these connected devices are expected to be fine with low bit rates and small quantities of data to stay connected. 

However, some of the IoT connections will require super fast response times, such as your car when it’s driving itself a few years from now. 5G will be required for that, and establishing 5G is not a simple task. Arguably, the two high-level requirements most often cited are a 1,000 times improvement in peak data rates (on LTE (News - Alert) 2010) and a major reduction in end-to-end latency to fewer than 5 milliseconds. To make this possible, we have to start with solidifying the cloud, virtualization, and programmable networking (SDN/NFV). So there is not a simple IoT network formula for everything. I mean, is it even possible to design one network that could deal with the requirements of 25 billion objects?

But let’s get to what an IoT service provider could do. Obviously, one is to do what Orange is doing – provide a pipe on some kind of new IoT technology. However, it is also likely that specialization could occur because there will be so many connected things. And with the increasing migration to NFV and cloud-based infrastructure, it seems that there would be more opportunities for specialized MVNOs to interact with the Internet. For instance, there might be MVNOs that not only handle specialized connectivity (kind of like the wireless Internet service providers when Wi-Fi first came around back in the day) but also handle interconnectivity between these specialized service providers. These service providers would provide a function similar to the wireless exchanges like IPX that we see today. 

Another type of IoT service provider can be applied to an example I mentioned earlier: cars that drive themselves. These cars will need the most minimal network latency possible because they’ll have to make split second decisions (like we do when we drive); so there might be IoT service providers that have specialized networks for these kinds of machines with very particular, strict requirements.

Other creative ideas will come because IoT will generate so much, and I mean so much, data that specialized IoT MVNOs will emerge to efficiently store and analyze the data for customers. An MVNO could analyze the data and possibly spot trends before people know they are trends. Furthermore, they could use the predictive features to develop their own capabilities and services to beat the trend and get a running start.   

It is also likely that all these connected devices will have different pricing and billing models, and MVNOs could be designed and launched to create the best pricing model for the use case at hand. An example of this is the different kinds of MVNOs today that cater to different population segments – prepaid cards, people who don’t use cell phones a lot and just need pay-as-you-go calls, people who need larger screens, etc. For IoT, there will likely be similar models that cater to specific verticals and cater to businesses.

There are many possible roles for carriers in IoT: data collection and analytics, connectivity and access, transport, cloud and hosting, and beyond. We haven’t completely figured this all out. However, I can see the possibilities that IoT service providers can offer, and why many regard IoT as the next big thing.

Jim Machi is senior vice president of product management and marketing at Dialogic (News - Alert) Inc. (www.dialogic.com).