Why The Internet Of Things Is Going To Hit Your Back Pocket

Introducing a more connected world

The first thing to drive acceleration in the amount of data transacted over mobile networks – and thereby our phone bills – was the number of people connected. Two thirds of the world now has a mobile phone. Around half of people with a mobile network connection a smartphone. Entire generations in Africa are skipping wired connections for mains power, preferring privately leased solar cells which pay for themselves in 18 months. They’re also skipping fixed phone connections preferring mobile alternatives.

These Global trends in uptake and reliance on mobile are the first major factor driving increases in utilisation of cellular data. The amount of mobile network data we’re using is growing by 70% per year, according to a Cisco (and other sources.)

Why The Internet Of Things Is Going To Hit Your Back Pocket

The ‘Internet Of Things’ is next

What seems likely to come next is not an increase in mobile subscribers, but an acceleration of the number of connections per person. From now on, this is the trend which will most influence what we spend on mobile services.

The GSMA (the Group Speciale Mobile Association – the people who decide on the standards that are established in the mobile industry) say that there will be one billion new mobile services by 2020. This huge volume in connected devices comes from the digitisation of almost every new device, from lights and cookers in the home, to cars and buildings outside it.

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Phone bills already make up around 5% of household expenses, around the same as what people spend on their groceries. We’re going to have to get used to spending more than that. It’s normal users, like you and me who are going to come to rely on the services that all these additional connections will generate and have to pay for them.

Getting from here to there

5G is on the way it is likely to be here as soon as 2020 with trials taking place before then. 5G has been designed with the internet of things in mind. Devices on 5G networks can survive for years on a single battery. Careful engineering has led to the development of 5G network specifications requiring extremely low levels of power.

If the annual Consumer Electronics Show is anything to go by, soon, everything we own will be online and accessible from our smartphones. This year saw demonstrations of internet connected coffee makers, garden sprinklers, toddler / child back packs with position / location devices installed in them and, of course, connected cars complete with mobile broadband data connections so the kids can watch YouTube.

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One of the most significant factors in uptake is that as soon as we experience these new technology elements, we form a deep emotional connection with them. Try removing tablets and mobile broadband access to Facebook from kids in the back of a car on a long journey and you’ll understand what I mean.

All this presents an opportunity – helping us manage those cost

Encouraged by the opportunity this situation creates, a while new world of services and apps has sprung up with the express intention of helping us manage our data and to keep the costs down.

Phone companies offer mobile phone plans for family in which data allowances can be pooled together. The parents who don’t use their allowance can find a use for it, providing it to the kids who get through theirs quickly. Almost every phone company in the world now provides a free of charge Self Service app which gives users a visual outline of how much data they’ve used, with what apps and how much they have left.

Android and iOS have built in data management facilities to hard stop data when your allocation for the month is reached. Third party apps take these concepts further. It won’t be long before platforms are developed to assist groups of users from families to large enterprises manage the cost of all of these services, from standard smartphones to the plethora of internet connected devices which will find their way in to our lives.

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Bringing it all together

Mobile service bills already cost as much as the weekly groceries in many families. Those with kids suffer the highest cost. Mobile service costs already amount to nearly four times the cost of school uniforms for them.When aggregated across entire countries, Western economies, the financial ramifications of this ever increasing number of connected devices will be significant.