The cellular IoT market experienced significant growth in 2023, with mobile operators worldwide earning $15 billion from 3.56 billion cellular IoT connections.
According to IoT Analytics’ Global Cellular IoT Connectivity Tracker & Forecast, mobile operator IoT revenue has grown at a compound annual growth rate (CAGR) of 16% since 2010, with projections indicating an acceleration to over 18% CAGR through 2030.
In 2023, the IoT revenue growth rate of mobile operators surpassed that of software vendors and hyperscalers, suggesting that cellular connectivity for IoT-connected devices is becoming more critical. Despite a 10% year-over-year decline in cellular IoT module vendor revenue, this was due to inventory management efforts rather than a reduction in demand.
Just a handful of major players control this market. The top five network operators controlled 83% of all global cellular IoT connections in 2023:
China Mobile: Contributing 46% of global connections and 20% of revenue, China Mobile saw a 20% year-over-year growth due to its comprehensive one-stop solution strategy.
China Telecom: With 15% of global connections and 7% of revenue, China Telecom grew by 28% year-over-year, focusing on urban management solutions.
China Unicom: Accounting for 14% of connections and 10% of revenue, China Unicom also grew by 28%, driven by 4G and 5G adoption.
Vodafone: Representing 5% of connections and 9% of revenue, Vodafone experienced 15% growth, particularly in the automotive sector.
AT&T: Managing 4% of connections and 12% of revenue, AT&T grew by 19%, also benefiting from strong automotive demand.
There is a significant difference in IoT connectivity pricing based on geography. Western mobile operators (AT&T and Verizon in the US, Deutsche Telekom in Europe.etc) charge a higher premium on their data plans than the global average but still enjoy double-digit revenue growth despite having fewer connections. By contrast, China Mobile is a leader in both revenue and connections.
While the cellular IoT market is growing, thanks to new massive and critical 5G RedCap connectivity options coming out in the next few years, these technologies are expected to account for almost half of mobile operator IoT connectivity revenue by 2030. The number of connections with 5G technology will grow at a rate of around 44% CAGR from 2024 until 2030.
The strength and cost-effectiveness of 5G RedCap come from its flexibility. This technology is becoming prevalent in many use cases—most prominently video surveillance, where it can provide the data rates necessary for high-quality video without requiring full 5G and its concomitant cost.
To summarise, this is a market that will continue to develop and grow as technological advances are made and customer demand increases from different verticals. With the rapid evolution of 5G and RedCap as underlying technologies, it is hoped that these two will radically redefine how IoT devices are connected to networks in the future.
(Copyright: IoT News Cellular IoT market hits $15B in 2023, poised for growth with 5G (iottechnews.com)
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