Connected Cows: IoT BS or BSS?

The business and operational model of the telco is the number 1 impediment to telcos realising new revenues and avoiding marginalisation/commoditisation.

Nowhere is this more apparent than with the Internet of Things. The future world with its 50B+ connected devices is frequently referred to as a huge opportunity for telco. However, the challenge with IoT devices is that they do not behave like a mobile phone, will possibly have 50M+ different use cases/business models, and that without the ability to adapt to non-telephony use cases and business models, the role of the telco rapidly retreats to providing commoditised bandwidth and connectivity. Dean Bubley’s post on the mTeddyBear nicely summarised the dilemma for the telco with the traditional SIM based subscriber business model breaking down when confronted with a device which is a teddy bear not a phone.

An existing IoT business, MooCall, illustrates some of the problems and opportunities in IoT for a telco.

MooCall is a device, attached to a cow’s tail, that monitors her tail movements and detects patterns that indicate an imminent birth. When this is detected an SMS is sent to the farmer to take appropriate action. Vodafone provides network connectivity to MooCall based on a Global SIM. MooCall is a really neat piece of IoT developed by a farmer for farmers.

But let’s unpack the value chain here a little, to better understand the opportunities and risks:

1. The value that Vodafone provides to MooCall
2. The value that MooCall provides to the farmer
3. The potential animal eHealth value that both could provide.

[Please note this is a theoretical exercise and is not based on practical experience of the business of farming or MooCall and its relationship with Vodafone.]

Vodafone currently sells a global SIM enabled device and gets recurring connectivity revenue on an annual basis. The global SIM enables connectivity globally from the best signal strength local network. In the current situation Vodafone is unseen by the farmer. MooCall could very easily move future devices to other global SIM providers who could undercut Vodafone’s price.

By contrast, MooCall is very visible to the customer. They sell the tail device and an annual subscription to the cow tail monitoring software with SMS alert. MooCall’s value prop is that the life of a single calf saved by assisting a difficult birth pays for the device. Moocall have a very direct value to the farmer.

However, MooCall are probably limited in uptake of their service by upfront cost and its single use case  ‘cow birth detection’. Currently there are 15,000 MooCall users worldwide but for comparison in the UK alone there are approximately 500,000 cows in first calf every 6 months.

There are a number of capabilities that Vodafone or other telcos could provide together with MooCall that could grow the value proposition:

1. Device SW management. Software updates using over-the-air provisioning.
2. New use case software distribution (Cow Heat detection; Horse birth detection……)
3. Outcome based billing: Connectivity is free but the farmer is charged based on an outcome (birth detected)
4. Cloud processing and analytics for device. Host MooCall and functions as SaaS.
5. Telco ‘intelligent farm’ package providing farmer with devices free and charging based on device outcomes and analytics/SW use as part of mobile contract.

Each of these could enable MooCall and the telco to grow the value proposition to farmers. Together they could increase the market for the device, its global penetration and ultimately strongly position for a future farm device ‘social network’.

However, to enable such a different model requires a completely different exposure of the telco BSS/OSS capabilities, with the ability to flexibly orchestrate these across the telco and MooCall. Outcome-based billing requires the orchestration of MooCall-derived outcomes and SaaS with telco billing.

Distinct MooCall and telco products require common OSS and BSS functions to be easily re-combined to enable rapid go-to-market. This is something the current monolithic BSS and OSS infrastructure prevent. However, with the ability to unbundle OSS/BSS functions and to orchestrate these with the service telcos have the opportunity to become high-value participants in the IoT food chain.

Francis Haysom