Vodafone exec: company now serves 65M IoT connections, including 14.4M connected vehicles and 5M medical devices, generating~€235M in Q4 2017, up 18.8% YoY
The claim that connectivity is a commodity has existed in the mobile industry for some time and has recently extended itself to the Internet of Things.
Context & Ripple Effects
The 'connectivity is a commodity' argument has hung over mobile IoT since at least 2016, when Verizon disclosed $195M in quarterly IoT revenue and began building a dedicated low-power CAT-M network for the segment. Vodafone's disclosure is the European counterpoint: 65M connections across vehicles and medical devices, growing nearly 19% YoY.
The counter-argument arrived three years later, when German low-cost specialist 1NCE raised $50M from SoftBank and Deutsche Telekom claiming 10M managed connections — proof that bare connectivity can be attacked on price. Vodafone's mix of automotive and healthcare devices is its answer to that squeeze.
First-order effects
- Vodafone's IoT unit is now a material, separately reportable business — roughly €235M in a single quarter — anchored by two sticky verticals, connected vehicles (14.4M lines) and medical devices (5M), rather than generic meters or trackers.
- The 18.8% YoY growth rate gives Vodafone evidence against the commoditization thesis at the moment it matters most: while negotiating enterprise contracts where connectivity is bundled with device management.
Second-order effects
- Rivals face a fork: match Vodafone's vertical depth or undercut on price — the path 1NCE took with its cloud-based, low-cost model backed by SoftBank and Deutsche Telekom, which pressures per-connection pricing industry-wide.
- Automotive OEMs and medical device makers gain leverage as carriers compete for their fleets, shifting IoT contract negotiations from coverage maps toward service-level guarantees and data-platform features.
Third-order effects
- If low-cost specialists keep winning share of simple connections while operators keep the complex verticals, carrier IoT splits into a commodity transport layer and a premium managed-services layer — making revenue per active device, not total connections, the metric that separates winners from volume sellers.
- With IDC projecting enterprise-driven IoT spending climbing toward $1.4T by 2021, regulators and standards bodies face growing pressure on cross-border device certification and data rules for exactly the medical and automotive segments Vodafone is anchoring.
The trend: Carrier IoT is bifurcating into high-volume commodity connectivity contested by low-cost specialists and premium vertical platforms where scale plus device management defends margin.