Automated Transcript
Hello. I’m Steve Lowe, Mobile Product Director at Gamma, and joining me today for this podcast is Rob Kittler.
Hello, Steve.
And Christian Krug.
Hi, everyone.
Today, we’re going to talk about IoT. We’re very fortunate because we’re really getting behind IoT in the UK now, and we’re going to be doing a big push this year. Christian’s got a lot of experience in IoT in Germany through the Epsilon business, which has now been acquired by Gamma. That’s great experience to bring on board. So, Christian, what is the history of Epsilon, and what prompted you to move into the IoT space?
Thanks for the question, Steve. First of all, I’m pleased that I can talk to you today about the important topic of IoT and its almost unlimited possibilities. My name is Christian Krug, Managing Director of Epsilon Telecommunications in Germany, a wholly owned company within Gamma Group. Since three and a half years, we are the market leader in the B2B marketing of connectivity solutions from the three most important network operators in Germany: Deutsche Telekom, Vodafone, and Telefonica.
Fabulous. And then, what actually made you decide to go into the IoT market?
Yeah, it was a funny story. In 2018, a long-standing sales partner approached me and told me that he had a customer who wanted to supply all major cities in Germany with a wireless router solution in the smart metering sector. They needed around 300,000 high-volume IoT SIM cards as part of the digitalization of electricity meter reading. Due to the low state-regulated price for electricity meter reading, it was not possible to deliver the service using Epsilon Network’s operator business model and make money at the same time. So we decided to cut out the operators and deliver the connectivity directly ourselves. We launched Fusion IoT as Epsilon’s own brand through our very good contacts in the telecoms market.
Yeah, that’s a fabulous story. I think we’ve seen the same use cases here in the UK with various utility companies looking to install smart meters with connectivity. It makes it much more efficient for them to operate their service because the meter readings are automatically captured and sent over the air. That’s a really interesting use case. You’ve got a lot of experience in the IoT market, and we’re looking to learn from that as we bring it into the UK. How would you define IoT, and how would you describe the business impact of IoT?
The globalization of markets and the digitalization of business processes require worldwide data exchange at any time and in any place, ideally in real time. Fusion IoT provides this service securely and at a competitive price for all devices that are connected to each other and exchange data. In this way, we establish the connection between people and the world of machines to implement advanced business processes with maximum efficiency.
Do you have any specific use cases that you’ve seen that we might benefit from in the UK?
Yeah, there are so many examples of the wide range of opportunities for IoT. I think a good example here in Germany is a pest control use case. There is a startup in Germany that digitizes traps for food companies, for pest control, for rats and mice. In the past, you had to walk through your environment and check the traps every day. This company, called TrapLink, digitized the traps so you don’t have to walk through your environment. You can monitor everything on your laptop. If there’s an animal in the trap, you get a signal and can see it. With Fusion IoT, you can connect all these traps in every surrounding, even in places with poor connectivity. You get massive cost-effectiveness for this business. With the eSIM functionality, you can build these traps with routers and deliver them all over the world, because you can get connectivity in every country you want. That’s a great use case. Other examples include asset tracking, smart metering, and smart cities. You can’t imagine what you can do with the connection all over the world with Fusion IoT.
I think the really interesting thing for me is that we’re focusing on delivering the connectivity. Whatever you want to do, we can connect you. But really, this is about business process efficiency, making businesses much more efficient and cost-effective, improving the quality of products or services, and driving more sales and revenue. Businesses will want to do this to get a competitive edge, but ultimately, they’ll need to do it to keep up with the competition. The forecasts for IoT growth are huge. The current volume of SIMs in the UK is 40 million, expected to be 65 million by the end of 2025. I know you have a more global perspective, Christian.
Yeah, thanks, Steve. The growth in network devices is forecast by well-known consulting firms to remain constant despite the global crisis. This means that global data connectivity is no longer a vision but a clear precondition for keeping the global economy running. With an average growth rate of 20% per year, $468 billion will be generated in our business by the end of 2027. I think there’s a great opportunity for all the partners of Gamma and the customers.
So I’m uncharacteristically quiet so far on this podcast. I think I’m mainly in awe of your English, Christian. Delivering something in German would be beyond me. However, I’m pleased to say that your product is coming over to our shores in 2024, so all of your best practices will rub off on us and our team in the UK. We can offer this to partners. I’m looking forward to putting cats out of business in the pest control side of things. But we always think of things like asset tracking and smart metering. I’m guessing you must be putting SIMs into every kind of device for analytics and data to feed through on the connectivity. Is there anywhere we should start in the UK?
Yeah, for sure. We are starting with our IoT launch of our Fusion IoT SIM management platform in 2024, together with Steve’s team at Gamma. We have an owner SIM management platform like the one we have in Germany for international purposes. We could start right now with connectivity for our customers in the UK and your international partners.
We are running some proofs of concept with Christian’s team for some of our customers, where we’re testing the service and it’s working really well. Sometimes we’ll have a primary SIM, which will be our Gamma 3 UK SIM, covering 98% of the data passing through that. But where that signal fails, it will fall back to the Fusion IoT SIM. The connection is very quick, delivering real business benefits for the customers we’re trialing this with. The exciting thing is that we already have a great product with Fusion IoT, the connectivity management platform, and the different coverage options. We’re bringing that together with the data management capability we have in the UK, so we can manage customers’ traffic securely and with our recent capability. We’re going to be launching something disruptive in the eSIM space with Fusion IoT, creating something greater than the sum of the parts.
There are probably stories around each of the networks we have access to, the speeds and the coverage. Forgive my ignorance, but are we looking at one pane of glass? What type of information is on that pane of glass, and what does it deliver?
I have to go one step before. As we are the established and trusted contact for corporate communications for our business customers and their partners, it goes without saying that they come to us as a reliable provider when it comes to global data connections. Once the demand for the required data connection has been established, it generates scalable and recurring revenues over many years, planning reliability for customers and consultants due to its flexibility. Fusion IoT can be integrated into business models and also has the potential to help establish new business models for partners and end customers in win-win situations.
Perfect. The different connectivity options do sit behind one pane of glass. Christian’s team has built a portal, and behind that portal, there are various connectivity options with different network operators. All of these things can be managed seamlessly. You can have data pooling across the different operators. It’s about delivering the right connectivity in the right place at the right time, with the right application and the right device, all managed seamlessly and easily behind this platform. What we’re doing as we bring this into the UK is adding our Gamma 3 UK service. We’ll have a single network solution for the UK where that is sufficient for a customer because the coverage is excellent. If they need resilience or if they can’t afford for the signal to drop as they’re travelling around, the Fusion IoT offer is there to provide the multi-network SIM.
The customer only needs one portal for the whole IoT connectivity. They don’t have to think about which carrier is best for the devices in each country. We choose the right carriers for the customer and combine it in the portal. They don’t need to know the details; they just need to know there is a connection. That’s our business and our service.
One of the other benefits is that we will be providing a data management service. We will securely take the data from the network, bring it into Gamma, and route it wherever the customer needs us to route it. That can also be set up via the portal. Finally, we talked about eSIM. Whether it’s a traditional eSIM that you might find in a device, we can manage that through the portal as well. But we also have something very disruptive that we’re going to launch. You have to be aware that the vast majority of IoT devices out there do not have a SIM capability. We’re going to fix that. We’re going to turn non-eSIM capable devices into eSIM capable devices to truly liberate our customers and make life easier for them.
So that’s a physical SIM card, not a plastic SIM card, that will take an eSIM profile?
Yes, you will put the Gamma SIM into your device. It will fire up and work as normal. But what you’ve now got is an eSIM in that device. We can then push another profile onto that device. You may put the SIM in the device, it’s Gamma 3 UK coverage, but you need Fusion IoT, and we can push a Fusion IoT profile onto that SIM seamlessly and very easily for the customer.
My knee-jerk reaction to that is the engineering efficiencies of changing the SIM card once. It doesn’t have to be an eSIM device. We’re future-proofing from just a SIM change. So, we’ve got a physical SIM card in a device that can download an eSIM profile onto it from a myriad of carriers. Engineering efficiencies mean touching that device once only and leaving it in the field.
Think of all the devices that are already out there, on top of wind turbines, street lights, trailers, shipping containers. If you want to change your coverage provider today, you have to change the SIM every time. What we’re saying is change it once, put our Gamma SIM in there, and then your device is future-proofed and you don’t have to go to the expense of swapping out the device to have an eSIM capable device.
That’s hugely advantageous from a commercial and engineering efficiency perspective.
We’re going to be busy, aren’t we?
We will be. We’ve got a lot more to talk about on this subject in another podcast. This is the benefit of bringing together the capabilities of our German and UK teams to create something greater than the sum of the parts.
With our good connections in Europe to the main carriers, we have very good contracts for IoT connectivity worldwide for all aspects of IoT. If you think about M2M connectivity, 5G, narrowband IoT, LTE-M, we can offer it all in one portal. It’s easy to administrate these things for customers and manufacturers of devices combined with Fusion IoT connectivity.
There’s a couple of good points there. One is flexibility. As Christian said, you can have various types of application, all of which demand a different type of connectivity. If you have an IoT device in a shipping container and all you want to know is where that container is, you need a narrowband solution because that has a much lower impact on battery life, extending the battery life. One of these devices can be put in place and not serviced for ten years. You can also have something that demands constant pings and data, and you’ll need a 5G solution. You might have something in a remote location needing a narrowband satellite solution. All these different types of connectivity exist within the Fusion IoT service. We have a fabulous offering here.
Feel free to think about what you can do with data connection all over the world in your business. We can talk together and find the right data connection solution for you and your customers.
We talked about Germany and the UK because this service was built and launched in Germany. We’re bringing it into the UK and rolling it out into our other territories in Spain and the Netherlands. To Christian’s point, the fact that we can drive good aggressive pricing from the operators is based on the potential of Fusion IoT and the volumes as we roll out into multiple territories. We aggregate all those volumes to drive down the price and get the best possible commercial arrangements for our customers. That can only benefit your channel partners and our customers.
I know we have channel partners in logistics, security verticals, and various other specialisations. There’s no stone unturned with IoT. It’s not like my world of standard airtime by any stretch. You’ve explained it well, Christian. There will be an education piece from Gamma’s perspective and marketing and deployment to come.
Absolutely. As Christian said, you can do anything. What we’re providing is the connectivity. People talk about different verticals. Asset tracking is probably the most popular application at the moment. We’ve talked about medical applications, with people wearing wearables monitoring heart rates, heart rhythm, oxygen levels, and sending data to the local doctor. If the readings are outside acceptable parameters, it triggers an alert to the doctor to intervene before it becomes a huge problem.
We are able to build business models and connectivity services to manufacturers of solutions in every business. We can combine it as a service to the customer. We can combine it as a full service, for example, asset tracking together with connectivity for the customer. It’s very easy to combine these things for win-win situations for manufacturers of IoT solutions.
Christian’s team has built a very impressive ecosystem of partners who provide hardware, consultancy, and other services. We focus on the connectivity piece. In the UK, we’re building that ecosystem of partners to deliver full solutions to customers. From a channel partner point of view, they can go as deep as they like with us. If they have an existing IoT business, we’ve got a fabulous connectivity offering for them. If they need more help, we can provide that. We have the ecosystem partners who can provide various aspects that we don’t provide directly.
There is another advantage of Fusion IoT. Due to national regulations, traditional telecoms businesses in specific European countries must maintain their own secure infrastructure. In contrast, IoT utilizes existing global network structures, ensuring an open, software-based connection across all national borders. Fusion IoT uses all networks available to its customers worldwide and consolidates them on one asset management platform called My Fusion.
We’ll get access to that in the UK, Steve. Our product marketing teams will have their work cut out in the short term after this podcast, but we’ll have this information on availability as the product evolves.
We’ll have exactly the same platform that Christian has built in Germany, tailored for the UK. UK currency, UK tax recognised, built to support the channel partner structure in the UK. There’s also end-user access, so the customers of our partners can manage their own connectivity directly on the portal.
SIM cards, but not as I currently know them through Gamma Mobile, which is exciting. A myriad of connectivity for our partners.
At the end of the day, IoT is about business process efficiency, improving product and service quality, driving more revenue, and increasing customer satisfaction. It’s an exciting time to be in this market. It’s already a big market, and it’s accelerating. It’s a fabulous time to be in this market for your partners too.
The eSIM functionality will open up a wide range of opportunities and have a significant impact on IoT growth. We’re implementing the eSIM functionality this year with Gamma Mobile, and I think that will push the business much more than now.
We talked about eSIM in a previous podcast, and its release this year. SMEs coming on IoT as well. This is eSIM functionality on a physical SIM card.
Yes, there are two aspects to this. Some IoT devices have eSIM soldered into them. The metering industry and automotive industry are huge, with eSIM chips soldered into meters and cars. We’re talking about every other type of IoT device that doesn’t have eSIM capability. Those devices could be anywhere in the world, in really inaccessible places. They should be eSIM capable, so we’re going to make them eSIM capable if they’re not already.
I’m thinking about my partners and connectivity. We will be able to provide every type of connectivity moving forward when this gets released this year.
Yes, essentially. This is very secure as well. eSIM technology is very secure. We’re working with the largest manufacturer in the world with huge security credentials. They manufacture bank cards and are involved in government contracts. We’ve got a very secure solution with endpoint security through mobile device management capabilities. As Christian said, we can route the data securely from Gamma, minimizing the attack area. It makes it very difficult for anyone with less than honorable intentions to harm our customers.
We’ve got an army of partners, and from a Gamma Mobile perspective, IoT is coming over from Germany and launching in 2024. What does scalability look like? What can a partner who’s never done IoT before do compared to one that already dabbles but not with Gamma? How can we help?
We can start with any kind of business. We can start small and take it as big as they want. The huge growth potential means we’re adding 25 million SIMs in the next two years, and within 4 or 5 years, we’ll be at 130 million SIMs. We’re seeing exponential growth. Partners getting into IoT now will see a market already there and increasing numbers of businesses adopting IoT. Once adopted, they extend it to more use cases. We have growth in the number of companies using it and growth in the number of use cases. Partners thinking about IoT can start small and grow with Gamma. Fusion IoT is a global solution. We can take them from tens to hundreds of thousands to millions of SIMs.
It’s very easy to sell IoT Fusion IoT. Just ask your customer if they need to digitalise something in their business. If they do, they need connectivity. We are the right partner for connectivity worldwide.
You’ve summed it up perfectly, Christian. Every customer has a need for digitalisation in their business, and we can help them.
Thank you, Christian, for sharing your experience. It gives us a real head start in the UK. Thanks, Rob, for your time. I know you’re trying to get your head around this.
Absolutely. I’m excited about what it’s going to offer to our channel and our partners this year. Thank you for your time.
Thank you very much. It’s been a great discussion. We’ll be talking more over the coming months as we roll these things out. Thank you for watching the podcast. We’ll see you for the next one.
Thank you. Greetings from Germany. Let’s get it together and start.
Perfect. Thank you.
