The Impact of IoT in Telecom: How Will It Drive the Future of This Industry?

Grace Lau
Published 11/02/2022
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Impact of IoT on TelecomThe Internet of Things (IoT) is bringing a new era of interconnectivity to our world. Smart devices are developing at a rapid rate, plus low-cost computing and advances in big data mean that there’s more data flowing and better ways to collect and use it.

Telecom is right at the center of this new data market. Business and personal users need greater data capacity and faster transfers to use this interconnectivity. So, by leveraging new technologies like 5G, telco businesses have an opportunity to corner the market.


What is IoT technology?

You might have heard the term IoT a lot recently without much explanation of what it means. That’s partly because it can refer to many devices and technologies. The basic principle is connectivity between web-enabled smart devices and the cloud and between the devices themselves.

The Internet of Things is essentially the network created by all these connected devices. When you have all these devices that can communicate, share, and use information, you need a network infrastructure that can handle huge amounts of data.



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IoT and 5G

5G is much better suited to handling large amounts of data with low latency than previous wireless networks. Compared to Wifi6, 5G can handle ten times the connection density with half the latency.

That’s why 5G is necessary on a device and network level for IoT applications. Telecom operators with a strong 5G strategy can take advantage of the emerging market in three key ways.


1. Service creation

New digital services need to be created as IoT applications develop. These services need to be broad in scope and will require a lot of forward planning. There is huge revenue potential in establishing these services, though, as IoT platforms become more popular.

Integration is always a primary concern for business customers. Services that can offer integration with multiple business tools, your IVR system, CRM system, marketing tools, and so on, will find it easier to gain a foothold in the market.


2. Service provision

Telecom companies are ideally suited to becoming IoT platform providers. Their ability to act as service providers goes beyond networks. They have the capacity to process large amounts of data and to develop the existing digital infrastructure that’s required.

There will be a considerable market for IoT platforms as a SaaS service. If your telecoms business has the network infrastructure to provide 5G connectivity, then providing the platform for businesses to use this network is a logical next step for growing your revenue.


3. Network development

The most natural role for telecom providers is network development. This involves the creation and maintenance of network infrastructure for 5G networks that can handle IoT data. This is actually not dissimilar to what many telecom providers are currently doing.


How will IoT applications affect telecoms?

The application of IoT across various industries will have a knock-on effect on how telecom businesses operate. This also means telco industry solutions will need to advance rapidly to keep pace with changing user demands.


Smart environments

Smart environments are emerging in a number of forms—smart homes, smart factories, and smart cities are just three examples. These are environments where multiple smart devices can communicate and share data in real-time.

Utilizing this data leads to new ways of managing business operations, more efficient public services, and energy-efficient homes. That’s where telecom companies can step in, providing users with a way to manage and utilize their smart device data.


Data storage

Cloud data services are a key part of IoT strategy. Telecom providers can handle the collection, storage, and processing of data for their users. This allows users to run their apps and tools client-side seamlessly while telcos handle the data load.

This will mean more telecom businesses providing SaaS services. For example, a business operating a cloud contact center using a VoIP phone solution and CRM system. The telco provider manages customer data, call data, etc., and provides access through a single platform.



Analytics is where the value in IoT data really shows. Telecoms businesses can provide an invaluable service to businesses by creating analytical results from IoT data. Big data insights are driving business strategy right now, and IoT data can play a big part in that.

There are opportunities for development in the backend, for integration and collection of data, as well as in the creation of software solutions for analyzing and presenting data insights. This will also lead to higher adoption of AI-assisted big data analytics.



Providing the connectivity required for IoT networks will define future telecom operations. Managed network provision for narrowband IoT will be a key revenue generator for B2B telcos.


The challenges of implementing IoT in telecoms

To take full advantage of IoT applications, many telecom providers will need to update their digital strategies. The IoT networks of tomorrow will be even more data-intensive than today’s networks, so the infrastructure will need to be updated to keep up.


Availability and reliability

For IoT environments to become fully functional, round-the-clock availability will be vital. The real-life applications of IoT in environments like smart factories and healthcare environments can’t afford unplanned downtime.

That means that reliable networks with built-in redundancy failsafe will need to be developed within smart devices to eliminate the issue of network disruption.


Interconnectivity and compatibility

5G networks use new protocols to handle device-to-device, device-to-server, and server-to-device communication. Interconnectivity between networks would be the ideal scenario. This means that we need to develop and adopt standardized protocols.

Compatibility between products, cloud storage solutions, and business tools will be vital in large environments using multiple smart devices. This presents a significant challenge in a market saturated with different tech businesses pursuing their own standards.



With so much interconnectivity, security has become a primary concern for users and businesses. Many telecom businesses are familiar with data security and secure storage already.

Yet, with a network of devices that need to communicate internally and send data externally, the concerns multiply. Currently, the biggest challenge is a lack of standardized security measures between different IoT devices.


Big data

Scalable data storage solutions are another significant challenge. Across the entire IoT landscape, there will be billions of devices transmitting information. This will lead to an unprecedented

 need for data sorting, storing, and processing.


How telecoms play a wider role in the IoT landscape

The effects of IoT adoption will mean that telecoms have an increasing role to play in areas like manufacturing, city infrastructure, and integrated home environments. Telcos will be the central access point for IoT data and applications in the wider IoT landscape.



Smart factories are growing in number in key manufacturing industries. The manufacturing IoT market is predicted to grow to $53.8 Billion by 2025. Manufacturers are already using data from smart sensors to improve process efficiency in their factories.

Smart monitoring in real-time can predict machine errors and reduce downtime from malfunctions. Supply chains can also benefit from using smart devices that can automatically monitor inventory levels.

On top of that, operational intelligence benefits from being able to gather in-use data from machines, as well as the ability to integrate data from functional testing automation tools.

The constant stream of data from those smart sensors needs a robust network and data storage solution. 5G networks with full IoT integration will allow the real-time collection of manufacturing data, which can be used to refine processes even further.


Smart cities

The idea of smart cities has developed around the world, with technology in use from New York to Copenhagen. Cities are using data from smart devices to assist with power consumption and distribution, traffic management, and environmental efforts.

In all these cities, telecom partners have helped implement the necessary 5G and narrowband IoT networks. The success of these initiatives means that more cities will be looking to modernize with IoT integration.


Smart home integration

Smart homes aren’t a new idea, but previous iterations based on niche devices failed to gain traction with consumers. The IoT version of a smart home relies on interconnectivity on a

How much do consumers spend on IoT devices

 network level. This gives telecom providers a unique opportunity in smart home networks.

Rather than relying on separate smart devices with different communication standards, the devices operate on a smart network. This is managed by the telecom provider in the cloud and the user accesses it all with an app on their smartphone.

Deutsche Telecom, AT&T, and Comcast all have their own versions of smart home network services. It’s more than likely that other telecom providers will follow suit as the market grows.


Final thoughts

The Internet of Things is already starting to transform the telecoms landscape. Whether it becomes the defining driver of big data, the demand for faster digital networks is already growing.

Building a strategy for scalable 5G networks and looking ahead to a more connected future will help your telecoms business thrive in these new data markets.


About the Writer

Grace LauGrace Lau is the Director of Growth Content at Dialpad, an AI-powered cloud communication platform for better and easier team collaboration. She has over 10 years of experience in content writing and strategy. Currently, she is responsible for leading branded and editorial content strategies, partnering with SEO and Ops teams to build and nurture content with the help of Dialpad’s guide to business enterprise transformation. Grace Lau also published articles for domains such as Causeartist and DivvyHQ. Here is her LinkedIn.