AWS May Be the Digital Key to Managed Connectivity Sales for Ericsson’s Carriers

In September 2020, telecommunications infrastructure manufacturer Ericsson entered into an agreement with Amazon Web Services (AWS) to make the cellular connectivity services of its carrier customer Telenor Connexion available for purchase on the AWS Marketplace. The AWS Marketplace has an Internet of Things (IoT) category, containing a “Device Connectivity” section that consists of 37 vendors, each of which offers online tariff plans for IoT connectivity services. Most of the vendors offer a single plan, but some offer as many as eight. Most are not traditional telcos, but are Mobile Virtual Network Operators (MVNOs), Virtual Private Network (VPN) and other protocol-specific routing service providers, and management platform vendors for IoT devices and IoT data. IoT “connectivity” has the broadest possible software-defined meaning on the AWS Marketplace.

Telenor Connexion is a subsidiary of the Telenor Group and an international MVNO specializing in cellular connectivity for the IoT. It was one of the first companies of its type, launching in 2008 and serving 10.5 million connections at the end of 2019. Telenor Connexion is currently offering a single IoT Trial Service tariff plan on the AWS Marketplace, providing 2G, 3G, 4G, and cellular Low-Power Wide-Area (LPWA) coverage globally. The plan includes five Subscriber Identity Module (SIM) cards, each with an allowance of 100 Megabytes (MB) and 10 Short Message Service (SMS) messages, for a bundled price of US$16 per month. Overage is charged at US$0.23 per MB and US$0.51 per SMS. This introductory plan is intended to entice new customers to experiment with Telenor Connexion’s services, with a view to developing a larger and more permanent relationship in the future.

Through AWS, enterprises can have a faster, easier to use, and more accessible means of purchasing managed connectivity for IoT devices. This provides enterprises with greater flexibility, as they do not have to go to a carrier directly, and do not need to develop a new business relationship with which they may not be as familiar. Instead, enterprises can purchase what they need instantly through a digital-only channel, and through a common supplier of Information Technology (IT) services that may already be familiar to and trusted by them. The simpler option that the AWS Marketplace presents will be especially beneficial to the long tail of Small and Medium Enterprises (SMEs) worldwide. The goal on the part of Ericsson as a technology supplier to wireless carriers is to accelerate the adoption of cellular IoT.

Wireless carriers can be brought into a third-party digital marketplace to increase their exposure and to acquire an alternative channel for the sale of their services. The AWS Marketplace democratizes the sale of connectivity by carriers, as well as IoT enterprises’ access to it. The Vodafone Group is a heavy hitter in the supply of global IoT connectivity, announcing in 2020 that it now manages more than 100 million connections. Its IoT business unit has benefitted greatly over the years from Vodafone’s large, pre-existing international enterprise sales force. Smaller carriers, even reputable long-standing specialists like Telenor Connexion, cannot compete with Vodafone in terms of sheer selling power. But through the AWS Marketplace, carriers no longer need a large sales force, or a widespread physical presence to reach enterprises worldwide. They are now a web search away.

Telenor Connexion is the first IoT service provider that Ericsson has brought to the AWS Marketplace and may act as a proof of concept for the introduction of other Ericsson carrier customers to Amazon’s platform. Ericsson has a long history with Telenor Connexion, the carrier being the original developer of the Device Connection Platform (DCP) that Ericsson now licenses as an IoT Connectivity Management Platform (CMP). The DCP is a foundational component of Ericsson’s IoT Accelerator platform suite and is currently used by 36 wireless carriers. Ericsson has previously considered becoming an umbrella entity to consolidate the IoT connectivity of its customers for joint sale to enterprises as a seamless global service. This has never come to pass, but Ericsson and Telenor’s involvement in the AWS Marketplace may be a test mechanism for allowing its smaller carriers to participate in the IoT, too.

Does it take anything away from carriers by having Ericsson lead them to the AWS Marketplace? Does it mean that carriers are a pure commodity in the IoT, just a pipeline to be plugged into on-demand and nothing else? No one party owns the IoT customer base, even though carriers have been among the few to have legitimately acted as a frequent primary point of contact and gateway to sourcing other IoT technology partners for enterprises. But while this is true for larger carriers that have often sought systems integration roles, it rarely applies to the smaller domestic carriers that would likely be the target beneficiaries of Ericsson’s stewardship. Even Telenor Connexion has been clear from the start that it only wishes to sell managed connectivity, preferring to stay focused on a discrete core competency, with no plans to ascend the value chain.

Ericsson and Telenor are not the first to offer cellular IoT connectivity on the AWS Marketplace. AT&T is present as the only traditional Mobile Network Operator (MNO), conspicuous by being one of the world’s largest IoT carriers and wireless carriers. It was AT&T that famously powered the first cellular Amazon Kindles and Amazon’s Whispernet. 1NCE, Eseye, Soracom, Teal Communications, and Truphone are also present as cellular MVNOs. 1NCE is the flat-rate MVNO that launched in 2018 with a footprint based on the Deutsche Telekom Group, having recently announced a partnership with China Telecom, too. Telenor Connexion is positioned between AT&T and 1NCE, so it will be interesting to see it what other carrier customers of Ericsson’s follow suit. “First out will be Telenor Connexion offering their well-established global connectivity solution for cellular IoT” stated Ericsson, intimating it is only a matter of time before there will indeed be more.

As Ericsson is not visible as Telenor Connexion’s partner on the AWS Marketplace, what is its goal and why should other infrastructure manufacturers and CMP vendors care? Ericsson does not sell managed connectivity, nor does it normally deal directly with IoT enterprises. But the AWS Marketplace arrangement exposes the combination of Ericsson’s hosted connectivity management with its carrier partners’ managed connectivity, just as if it did. Potentially, this provides a global IoT connectivity package to enterprises and orchestrates the sale of its carrier customers services; not as a replacement to those carriers’ own sales efforts, but as a supplement. This allows carriers to jointly serve enterprises that they would not have been positioned to have signed contracts with independently. This brings more licensing revenue for Ericsson and may attract more carriers to its IoT Accelerator platform. AWS’ rich customer base for cloud services is an ideal hunting ground for new business.