Mergers and acquisitions
Vodafone's business has grown steadily since 2008, supported by a number of vertical acquisitions such as automotive, healthcare, smart buildings and agriculture.
Automotive is Vodafone's largest and most profitable segment (accounting for around a third), followed by medical devices and healthcare (21%), energy and utilities (16%) and logistics and transport (10%).
Connectivity management is a core activity of the telecommunications company’s IoT business. As of the end of March 2023, Vodafone had 162.3 million IoT connections, distributed across 190 markets and 570 networks. The IoT connections are on 2G, 3G, LTE and 5G networks as well as dedicated IoT networks using narrowband IoT (NB-IoT).
By the end of the first quarter of 2023, Vodafone will have more than 1 billion euros in revenue from the IoT business. Analysts say the connectivity segment accounts for the majority of total revenue, growing at a rate of 10% annually, while the sales of hardware devices, terminal solutions and IoT connectivity have increased by 11%, 30% and 8.1% respectively.
Vodafone established a dedicated IoT unit in 2008, leveraging its successful roaming capabilities with its multi-country and multi-regional presence to provide practical benefits to users, such as dedicated roaming tariffs compared to regular roaming charges.
The operator sees strong growth potential in both connectivity and IoT service solutions. Vodafone sees the small and medium-sized enterprise (SME) market as the segment with the least IoT penetration, and therefore, this is an area of particular focus, along with e-health, smart cities, connected education and another category called “Digital Green” for the environment and sustainability.
Economy of everything
From a product perspective, Vodafone proposes the concept of “economy-of-things”, which refers to the integration of IoT into products and services that allows devices to interact, trade and transact.
In 2012, telecommunications company Vodafone launched its Digital Asset Broker (DAB) platform, which uses blockchain technology to authenticate devices and connected machines, allowing authenticated assets to trade data and money over a secure encrypted connection.
In May 2023, Vodafone will spin off its DAB business into a separate unit and sell a 20% stake to Japanese investor Sumitomo. The joint venture said it will initially target the automotive and transport sectors in Germany and the UK, before expanding to other European countries, the US and Asia.
“Under the agreement, Vodafone will transfer its Economy of Things (DAB) platform, as well as its intellectual property, contracts, technology and software, to the new business,” the operator said. “In return, Sumitomo will invest in this new business and work with Vodafone to attract additional investors, partners and customers.”
Also in May, Sky News reported that Vodafone had hired a consultancy to help sell a stake in its IoT division, as it sees the rapid growth of connected devices globally. The source said the carrier could sell up to 49% of its shares (valuing it at around €1 billion).
Vodafone is betting on the benefits of IoT for consumers, citing a growing number of applications such as smart watches, pet trackers, handbags and bicycles, as well as connected vehicles.
“For businesses, the need for IoT for potential use cases is even clearer,” Vodafone said. “These include solutions such as automated monitoring of energy use on the national grid, monitoring consumption in smart buildings and detecting traffic congestion in cities.”
(According to Inform, News Sky)
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