Vodafone IoT chief: ‘Big bets like NB-IoT are the business of telecoms’

31 May 2018

Vodafone IoT director Stefano Gastaut. Image: Naoise Culhane

Vodafone’s IoT chief, Stefano Gastaut, predicts that bets on narrowband IoT will make the telecoms giant a central player in industries from autotech to healthcare.

The last time I spoke with Stefano Gastaut, almost exactly eight years ago, he was the head of Vodafone’s consumer business in Ireland. In the intervening years, he has risen through the ranks to hold leadership positions in Belgium, Egypt, Russia and the UK. Today, he is director of the telecoms giant’s global internet of things (IoT) business.

Vodafone’s IoT business is in full throttle as the term ‘internet of things’ moves from an aspiration to a tangible reality in the present.

‘When we made our big bet on 3G, we didn’t know that the iPhone would be coming along and would change everything’

“It has become a sizeable business in volume for us and we have a few M&A deals in the works and [are] looking at more deals.

“We have decided to make IoT the big bet of Vodafone and this has made my job very exciting.”

Gastaut isn’t kidding around. Vodafone’s IoT division in the past financial year has recorded revenues in excess of $800m globally and the group has 1,500 people focused on IoT.

“It is still very early days for IoT in the sense that the technology will have a major impact and a variety of use cases. We have a lot of contracts and deals signed. We are no longer in a period where it is a question of how we can do it, but it is a business that is ready to scale.”

Telecoms is the business of scaling

The key to the scaling part is Vodafone’s big bet on the narrowband IoT (NB-IoT) radio standard.

“We have pushed our coverage plan really aggressively across Europe and, in the space of the next nine to 12 months, we will have achieved 100pc coverage in major markets.

“NB-IoT is no longer hypothetical, it is happening and it is going to be a major force in big verticals and it will be all-pervasive in automotives, agriculture, insurance, utilities and a lot more.”

The NB-IoT standard selected by Vodafone has also been selected by Germany’s Deutsche Telekom. It is a low-cost, low-energy technology that enables various machines, from sensors in factories, to one day pacemakers in human bodies, to small bursts of vital data over wide areas.

Gastaut said that Vodafone is on track to have 100pc NB-IoT coverage of the UK, Germany and Italy by March 2019.

“We have made the bet that NB-IoT will be the low-power technology of choice.”

While many deals have been signed, Gastaut said that current hurdle is ensuring more original equipment manufacturers (OEMs) create NB-IoT devices.

“The key is to have devices like electricity meters and other enabling devices that can carry an NB-IoT module. It is a question of time.

“The fact that ourselves and Deutsche Telekom are backing the standard will encourage more OEMs to make devices, starting with smart meters and other products like temperature sensors and more with NB-IoT modules inside.”

If you study Vodafone’s trajectory since the 1990s, when it was solely a mobile network operator offering 2G mobile phones, the company is now a total telecoms provider offering fixed as well as mobile services and has even forayed into TV.

In recent weeks, the telecoms giant revealed the acquisition of Liberty Global’s subsidiaries in Germany, the Czech Republic, Hungary and Romania, effectively making Vodafone one of Europe’s largest cable broadband and TV providers.

And into this heady mix will be the next-generation 5G evolution as well as NB-IoT. Quintessentially, the networks of the future will be a closed fixed and wireless loop of 1Gbps-plus speeds and higher, with NB-IoT ensuring consistency through short bursts of relevant, mission-critical data from a multitude of visible and invisible machines.

And, while NB-IoT is a wireless telecoms standard that supports enterprise and industrial applications today, it is tantalising to think what the world will be like when the technology is applied more broadly in the consumer world as well.

Vodafone’s ambition to be a platform player

“You are right in saying that Vodafone has changed its game plan quite a few times by clear choices on strategies. One is convergence, which you are seeing in terms of mobile, fibre and now our acquisition of Liberty Global companies in central Europe.

“The second bet is more enterprise-based at present. The key to understanding this bet is that we see the big role that Vodafone will play will be both as an access provider but also as a platform.

“With NB-IoT, we will be providing not only access but also a connectivity management platform. We believe IoT needs an ecosystem that has to be fully equipped to deliver the solutions that customers want. Vodafone covers a lot of different kinds of access, including mobile, fixed, fibre, satellite, maritime satellite and all sorts of connectivity solutions.

“Will NB-IoT turn out to be one of those main technologies? We are not sure but we believe in it enough to make a big bet on it. The use cases today are industrial and in devices like smart meters.

“We have had to make bets like this before. Big bets like NB-IoT are the business of telecoms.

“When we made our big bet on 3G, we didn’t know that the iPhone would be coming along and would change everything. It was the same with 4G, we couldn’t have predicted video would be as big as it has become but we had a feeling.

“Our reasons for getting behind NB-IoT are similar. It will be the telecoms standard that will drive many of the products and services of the future.”

The future is automated

Gastaut pointed to insurtech as an example of what is coming. “There are entire insurance companies being set up to challenge incumbents just using the internet of things in cars and medical devices.

“What you imagine today could come true sooner than you think.

“Look at logistics. With the digital economy, there is now more and more tracking than ever before. Delivery is being made possible via tracking of vans or through drones. The whole space of logistics is changing very rapidly. IoT is central to how you manage a building today, for example.

“We now have video cameras that can take feeds and process them instantly with AI. You can capture an entire crowd in a stadium and AI will not only recognise people in that feed, but businesses will build entire business models out of the analytics that will come out of video streams,” Gastaut concluded.

“Big bets on connectivity like NB-IoT will drive this near digital future.”

John Kennedy is a journalist who served as editor of Silicon Republic for 17 years