Connectivity-as-a-Service

No, wait! Isn’t connectivity already a service? So, does this concept even make sense? Yes, it does. Here’s why. A few weeks back, I heard my 4-year old singing to herself, not knowing that I’m watching her with a smirk at her sheer innocence. And then suddenly, the smirk turned into an expression of amazement. What I heard was, “If you liked that song, click here to subscribe.” Click here to subscribe! Welcome, Generation YouTube!

mobile connectivity already contributes to about 3.8% of the world’s GDP

This really simple example is a glaring example of how our behaviors are changing, without even realizing how weaved we are with the digital world. And for the new generation, the word "life" is almost interchangeable with "digital life". One catalyst in shaping this behavior is the mobile industry. The mobile industry has come a long way, in a relatively short span of time. The industry has seen a very fast pace of innovation. Just a few years ago, the high-flying value-added service (VAS) that a network operator could offer its customers was a ringtone or a ring-back tone! Sounds trivial enough to be a joke today, as “mobile” network operators diversify into many different businesses. VAS, I believe, has now transformed into business transformation services! They are now solving bigger problems like financial inclusion or industrial and enterprise automation, contributing far more to the economy than before.

According to the GSMA, mobile connectivity already contributes to about 3.8% of the world’s GDP. That’s roughly $3 trillion worth of economic value. This industry has been a torch-bearer in subscription-based businesses. It’s no wonder why mobile consumers are commonly called mobile “subscribers” in the industry. Ironically, the acquisition journey of a new subscriber has always begun by selling a product – the SIM card. “Subscribe to this voice package.” “Subscribe to news alerts via SMS.” “Subscribe to a monthly data plan.” And all those subscriptions aligned to one IMSI (International Mobile Subscriber Identity), burnt inside a secure chip. In fact, with handset subsidies, the mobile network operators have really taken the notion of product-as-a-service mainstream, setting an irreversible consumer behavior.

So, historically, connectivity has been sold not has a service, but as a product, requiring mobile operators to set up strong logistic networks and supply chains (think about multiple SIM vendors, multiple type of SIM cards per offer, multiple types of packaging and packaging suppliers, in some cases multiple handset manufacturers and so on). Over the years, I’ve worked on projects that have helped mobile network operators optimize their subscription selling in many different ways. But what happens now with more connected devices being sold and connected to the Internet of Things? Devices of different shapes and sizes (ranging from cars to smartwatches) are being produced in tens of millions around the globe. Can connectivity still be sold as a product to address these billions of devices? The complexity is not sustainable.

In comes the eSIM and subscription management. This, is the “Click Here” of cellular subscriptions. It is a big leap in the direction of connectivity-as-a-service. Make no mistake – this model is not devoid of a physical component either. The security and standard requirements, rightfully, enforce the use of a secure element (the eSIM). The beauty of eSIM lies in the architecture and model, where once deployed, customer- or subscriber-acquisition does not require the very high acquisition costs. The industrial and automotive world has adopted this technology for quite some time, so it has already reached a level of maturity. Now, with advancements on the consumer electronic side, subscription management is about to go mainstream. Let’s welcome the world of Connectivity-as-a-Service.

UPDATE: Came across this nice article on HBR that might interest anyone interested in the on-demand economy, and how it's shaping up: https://hbr.org/2016/04/the-on-demand-economy-is-growing-and-not-just-for-the-young-and-wealthy?utm_source=twitter&utm_medium=social&utm_campaign=harvardbiz

DISCLAIMER: All the cool views presented in this post are my own, and do not necessarily reflect the views of my past or present employers.