The IoT Impact On Carrier Contract Optimization

Christine Kruze  Christine Kruze
 Vendor Program Manager

The IoT Impact On Carrier Contract Optimization

Any company that plans to realize value from the Internet of Things (IoT) will need to be sure that they are negotiating optimal contracts with their carriers for future data needs. As a managed service provider working with a customer to establish and maintain the relationship with the carrier, that means truly understanding what level of service is required for each IoT deployment and then working to match those needs to contract Service Level Agreements (SLAs).

  • In most traditional carrier contracts, quality of service (QoS: is the assessment of the data stream performance and is usually measured on the following: latency, jitter, performance, error rates) is not established in the SLA prior to implementation.
  • Most wireless connections force competition for capacity and create negative impact on data transfer rates, jitter, packet loss rates, etc. because they are utilizing best-effort delivery protocols.
  • Customers generally have not established a QoS expectation of performance from the carrier and when they begin to notice problems, they will buy more bandwidth than they actually need in the false hope that this will improve the service level.
  • A shift to focusing on service levels instead of volume will create a need for managed service providers to negotiate and subsequently audit contracts to monitor the particular data feeds and report on the expected latency, speed, and error rates. The importance of negotiating correct pricing/solutions/services and the possibility of non-performance penalties will be a major factor in future IoT success.
  • It is advisable that the managed service provider be given good working knowledge of the carrier’s roadmap so that any new technology can be integrated as early as possible.
  • Avoiding long term strain on the data flow by pro-actively addressing future potential usage needs is a best practice that is often overlooked in the rush to enter the IoT race.
  • Managed service providers must be able to do predictive analysis of how expected usage of IoT devices will ultimately impact the customer’s data/network needs.

The understanding of a customer’s particular needs and cost thresholds in an IoT deployment is crucial to successfully navigating the unique waters around IoT. Although there are myriad challenges for companies seeking to exploit the full potential of the IoT, managed service providers should take steps now to position themselves as customer/carrier key partners and allow themselves an opportunity to take full advantage of what is coming next on the IoT horizon.

Christine Kruze is a telecom management industry thought leader exploring the impact of technology as a business accelerator and social capital enabler. Learn more about expert services to transform your telecom environment.