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The latest Kaleido Intelligence Cellular IoT Connectivity Series report

Energy Sector IoT to Use 1 Billion Cellular Connections by 2028

Smart Metering and Smart Grid Act as Market Makers, with Each Sector Bringing in Over $1 Billion in Connectivity Revenue

London, 1st February 2024 – New research from connectivity experts Kaleido Intelligence has found that oil and gas and mining extractive industries, combined with power generation and distribution, will use over 1 billion IoT connections by 2028. This represents more than a 60% increase over 2023.

Kaleido’s new research, Cellular IoT Connectivity Series: Energy & Utilities Opportunities & Forecasts 2024, notes that power distribution and smart meters will be the bulk of these connections, with enough to make dedicated network deployments viable through a single contract. However, this also increases competition from unlicensed connectivity, where the benefits of leveraging an existing public network infrastructure are less necessary.

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Advanced Use Cases Drive Up Data Consumption

As well as an increase in connections, the report anticipates substantial adoption of the latest cellular technologies, which will drive up data usage to over 611 petabytes in 2028. This is driven by video-based use cases such as drone surveys for maintenance and automated vehicle usage in mining. However, the report notes that several of these use cases will not directly monetise the data directly but instead utilise alternative business models to keep the use of cellular technology appealing.

“Connectivity providers face a dilemma in the utilities segment,” notes research author James Moar. “Data-based services can drive operational savings, but show an increase in upfront costs. This pressure to keep costs low is driving a move to service-based business models, particularly for maintenance use cases.”

Mining Has Room to Grow

The research has found that Latin America has some of the highest growth in cellular connections in the sector, at a CAGR of over 50%. This is primarily driven by the mining sector in the region, although the amount of mining connections will remain relatively low, with only 8% of mines in the region utilising cellular connectivity. Kaleido believes that education is key to improving this, and CSPs need to improve their demonstration of return on investment in order to drive more interest in upgrading existing infrastructure.

Connectivity Limited for Maintenance in Oil & Gas Sector

Similarly, adoption remains low for the oil & gas sector, particularly in the Middle East & North Africa, with strong existing infrastructure. The bulk of revenues here will come from newer deployments elsewhere, with MENA making up less than 6% of 2028 revenues, thanks to less enthusiasm for upgrading existing operations.

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About Kaleido Intelligence

Kaleido Intelligence is a specialist consulting and market research firm with a proven track record of delivering telecom research at the highest level. Kaleido Intelligence is the leading research company addressing mobile roaming and connectivity services in its entirety, covering industry-leading market insights, data forecasts, historical viewpoints, competitive intelligence and operator market surveys.

Research is led by expert industry analysts, each with significant experience delivering market research and insights that matter.

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