Vodafone’s Erik Brenneis explains how NB-IoT and data are transforming the mobile operator.
Erik Brenneis leads Vodafone Global Enterprise, a business unit accountable for Vodafone’s largest global corporate customers. He defines the strategy and operational execution for Vodafone’s relationship with these multinational customers.
Brenneis is also director of internet of things (IoT) at Vodafone, meaning he is fully responsible for driving Vodafone’s IoT growth, business strategy, products, and profit and loss at a global level. This includes the Vodafone Automotive business (formerly Cobra Automotive Technologies SpA).
Since starting at Vodafone in October 2009, he has helped to drive the company’s position in the IoT market.
Before Vodafone, Brenneis held a range of senior management positions within Siemens and Cinterion Wireless Modules. Working as head of sales for wireless modules at Siemens, he developed his awareness of IoT hardware and the industry sector. Prior to this, Brenneis worked at Landis+Gyr in Switzerland as vice-president of sales, where he grew his knowledge of the utilities industry and enhanced his understanding of energy and power control systems.
Vodafone recently published its latest IoT Barometer, which shows that since 2013, the proportion of companies deploying IoT has more than doubled, from 12pc to 29pc, in just four years.
Among those that have deployed IoT, on average 19pc have already seen a return on investment. Of those with up to 100 connected devices in their businesses, 28pc are seeing “significant” return on investment, rising to 67pc for those with more than 50,000 connected devices.
Last week, we reported how Vodafone has joined forces with Dublin City Council to deploy narrowband IoT (NB-IoT) technology across the docklands district as part of a smart cities initiative that includes cutting-edge flood defence mechanisms.
Your study shows that those who have invested in IoT have seen a return on investment. In what way is this occurring?
We are looking at the market every day and that is the experience. Let’s take utilities: smart metering has already been around for quite a while in various countries, and in the countries where it has been rolled out at scale, like Sweden or Italy, the utilities after a while notice that they have all kinds of incremental savings they get from collecting data that they didn’t even calculate before.
For example, the business case for smart metering originally was a very simple one: a person going around reading electricity meters – this is cumbersome and not very customer-friendly because somebody needs to open the door. And so you automate that, it saves costs over time reading the meter and the customers are also happier.
What the utilities firms now notice is that since they have an always-on connection to their meter, their cost in managing customers goes down massively.
For example, the number of customers who call in with a question about their electricity; normally somebody would have to take an old meter read or a new meter read to tell the customer how much costs they can possibly expect. Now they can just log on and get an up-to-date reading that will save a lot of effort and cost and logistics and so on.
That’s just one example where customers see more benefits from IoT than they initially thought.
How deep is the penetration of IoT devices into the broader digital world or is it still the domain of telematics and smart manufacturing?
It has opened up. There are a couple of markets where, frankly, in the developed world, the markets are already saturated and every truck running around the EU has some form of telematics in it, sometimes even several devices for fleet management, tolls etc.
However, more and more devices are being connected. For example, there are a lot of high-end coffee machines that are already connected, where makers can remotely manage the machines; you can get a service contract along with it.
Actually, we have seen a take-up of consumers also buying small telematics devices for their cars, which they connect to their smartphones. And that, until recently, was a purely industrial business.
So, I think we still see the old industrial world going strong with M2M and also with smart cities, parking solutions being implemented. Smart lighting is a big growth area at the moment. These are traditionally industrial applications that are filtering into the everyday, consumer world.
I think it is growing across the world significantly.
Vodafone is a big champion of NB-IoT and recently revealed plans to deploy the technology across Dublin’s docklands. How do you see NB-IoT making its impact in our lives?
There are lots of technologies that you can currently connect to gas meters, electricity meters or water meters. These meters are the optimal devices for NB-IoT because the characteristics of the technology are that it is low power with a battery that can last for up to nine years and it works over long range.
Rival technology Sigfox works over unlicensed spectrum and has some limitations in terms of how much data you can send back and forth. And then there is also Bluetooth, where you can use short-range technology and connect several meters to a terminal in which there is a 4G connection to send the data back to a base station.
But the beauty of NB-IoT, in our opinion, is the very low power demand and the very good availability of the technology everywhere, so we can get into basements with it and that makes it optimal for sensors, for meters and so on.
On the other hand, when you discuss security and robustness of the technology against interference, for example, it is also safer than other technologies because it operates in our licensed spectrum. Nobody is allowed to send data on the same frequency because we own this frequency.
When you take all of this together, it is a low-cost technology. I believe it is an optimal technology for gas meters, water meters, electricity meters, sensors and so forth.
The pilots we have run so far are mainly with utilities firms who are extremely interested in it across the board in Spain, Italy, Ireland, the Netherlands. When you talk about where the network is available, the nice thing about it is, we can enable our existing network to also support NB-IoT software updates on our base stations.
We can switch it on over a regional basis. The network and the technology are there right now, customers and companies like meter manufacturers are developing upon it and then utilities in regions are keen to switch it on.
How will IoT change Vodafone as a business?
From a quantitative point of view, I don’t know exactly where it is going to be in five years but the current growth rates are close to 20pc per annum in revenue for us. If you extrapolate that into the future, it will be a multimillion-euro business in five years.
It is already a big business within Vodafone since the acquisitions we have made in automotive and the more than 59m connections we have in IoT.
Vodafone continues to invest in IoT. NB-IoT is a good example – this technology is only for IoT. I don’t think it is going to end up in the hands of a consumer NB-IoT device; it is a technology we are only rolling out for enterprises but the end results for consumers will be staggering.
On the automotive front, we are working very closely with car manufacturers.
It is also reflected in our quarterly results when our CEO refers constantly to growth of the internet of things. I expect the importance of IoT to Vodafone to continue to grow.
SIMs in cars are already a reality, so tell me more about the automotive aspect?
Interestingly, Audi cars’ M2M technology comes from an Irish company called Cubic Telecom and it uses the Vodafone network. That’s a joint project we did with Audi. Cubic provides the software platform for Audi cars to communicate with the network over Vodafone’s global network.
That is an exciting project for us and we expect that to grow into the wider Volkswagen Group as well, which are huge numbers.
What are your predictions for the machine-driven future?
From a Vodafone point of view, the responsibility for machine-to-machine communication or for machine learning, AI – and enabling that remotely – is part of the internet of things group.
At Vodafone, we consider ourselves a leader in the IoT market in terms of our size and what we can do. However, there is so much more that will come and basically, for us, our networks are always in the middle of this. When machines communicate with each other, then we are in the picture.
Our customers say that over the next five years, partnerships will flourish. We are not a robot manufacturer, we know how to communicate and we know how to deal with large amounts of data and applications. However, the intelligence of how a robot moves – that’s the domain of other companies.
How are you reorienting your people for a world of IoT and NB-IoT skillsets? Is the skills profile changing within Vodafone?
That is 100pc true. We offer secure end-to-end IoT solutions with authentication, encryption mechanisms. Security is under control but it will always be something to watch out for. More and more people are saying we are not getting the right people with the right skillsets for this new world.
At Vodafone, how we have dealt with it is, a mix of hiring a lot of people from specialised IoT companies. For example, I worked with Siemens in exactly this market, and we hire more people in the IoT space and these people train the people internally who have traditional roles in Vodafone.
When you talk about data analytics, software development, automotive analytics – that was why we acquired Cobra and that provided us with hundreds of hardware and software engineers in a vertical market, who know exactly how to program and operate systems for reading and managing data from cars, for example. So, our strategy has been a mixture of all of these measures.
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