Gemalto announced (on 03 April 2017) that it will provide SoftBank with its remote SIM provisioning platform, the backbone for the operator’s new eSIM offering. The new platform will enable SoftBank’s customers to remotely provision eSIMs with profiles to connect to the mobile networks of their choice. SoftBank is targeting opportunities in a range of sectors, such as connected cars, wearables, traffic management and smart meters. In the connected car scenario, customers will be able to remotely select their choice of carrier when driving into a new country.
Our analysis Over the past couple of years SoftBank has entered into a range of partnerships to strengthen its ability to provision and manage IoT subscriptions and devices. In July 2015, SoftBank selected Jasper’s cloud-based Control Center IoT connectivity management platform. Last year it chose NEC’s CONNEXIVE platform. These partnerships enable SoftBank to meet different requirements and offer different functionalities. The partnership with Gemalto enables SoftBank to serve customers that require eSIM to support their roaming assets or for simple management of domestic assets. The Cisco Jasper deal enables SoftBank to compete with NTT DoCoMo to support the connectivity needs of enterprise customers using the Control Center platform, the largest global cellular IoT connectivity management platform. Access to NEC’s CONNEXIVE platform enables SoftBank to offer data exchange brokerage (DEB) services to its enterprise clients. SoftBank currently connects its enterprise and consumer IoT customers through its legacy 3G and LTE networks. It is in the process of deploying a LoRaWAN network across the country and has said that it will also roll out NB-IoT and Cat-M1 to address a range of LPWAN opportunities and meet different customer requirements. It has not yet put a timetable on its NB-IoT and Cat-M1 plans, but deployment of such LPWAN networks form only part of its rapidly diversifying IoT strategy. In the past 8 months SoftBank has acquired ARM Holdings, the leading semiconductor IP and software company, launched a technology fund that is targeting $100 billion of investment and has entered into a range of partnerships that give it exposure to areas such as autonomous vehicles, robotics, blockchain and insurance among others. As such its approach to IoT is considerably more ambitious than its operator peers, but unlike traditional telecoms players it has both a history of financing large transactions and its roots in software, content and internet services. The acquisition of ARM gives SoftBank strong existing revenue streams, but both this and its other initiatives around IoT reflect a desire to drive greater connectivity and the development of new vertical business models. SoftBank is taking the partnership or co-investment approach in areas such as connected car, blockchain and insurance. Increasingly, these initiatives will exploit capabilities it had gained through investments it has made in areas such as fintech (SoFI) and AI (Cloudminds). Building such broad capabilities will enable SoftBank to diversify its IoT revenues more rapidly than leading operators, such as SK Telecom (South Korea) and Verizon (US) that are aggressively targeting the IoT opportunity. In 2016 SK Telecom and Verizon achieved IoT revenue growth of 40.7% and 44% respectively, but such services still accounted for less than 1% of their total revenue. SoftBank’s key IoT developments over the past 8 months are outlined below.
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