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Deutsche Telekom Set to Spin Its IoT Biz

German telecom giant Deutsche Telekom is spinning off its IoT business that will soon host an IoT hub platform using standardized interfaces to ease the deployment of IoT applications and services.

The DT IoT business will be an independent operation beginning July 1. The carrier said the move will allow that business to be more agile in responding to the rapidly evolving market.

“Competitors in the IoT environment are particularly agile and have lean decision-making structures,” DT noted in a statement. “The independent [company] is intended to strengthen Deutsche Telekom’s position in this growth market.”

“As an independent company, we are more agile and can better address the fast-moving IoT market,” added Rami Avidan, CEO of the newly-named Deutsche Telekom IoT business. That business will include all responsibilities for DT’s entire IoT operations.

DT had initially announced plans for the spin-off last August.

“Independent companies act in a more agile way,” explained DT’s T-Systems CEO Adel Al-Saleh at that time. “As such, they can better address the fast-moving market, including medium-sized enterprise. They’re more self-reliant in the market and help open up new opportunities, facilitating for example partnerships, or even cooperation with competitors – so-called coopetition.”

Gartner had previously forecast that there will be 25 billion IoT devices deployed by the end of next year.

The move also plays into DT’s growing 5G business. The carrier last week said it had expanded its home network to cover 16 million people, with plans to cover 40 million people by mid-July.

IoT delivered by 5G is poised to drive $8 billion in revenue for operators by 2024, according to a study released earlier this year by Juniper Research. That represents a 1,424% increase from the $525 million IoT is projected to contribute to operator revenue this year.

Making IoT Easier

However, analysts have noted that 5G doesn’t magically remove significant hurdles that remain. Multiple vendors are expanding the capabilities of IoT managed service platforms to embolden that effort.

DT’s efforts are around its “hub” marketplace that it said will make “access and operation of an increasingly heterogeneous IoT ecosystem as simple and manageable as possible.” This will rely on standards and open interfaces that will allow DT to integrate with IoT systems from other vendors and carriers. This includes tying together clouds, protocols, and different IoT technologies.

“The amalgamation of all IoT solutions into one framework provides a business environment that is unique to date,” Avidan explained. “With this, Deutsche Telekom is establishing the world’s first open IoT network and expanding its role from IoT player to IoT orchestrator.”

The Deutsche Telekom IoT hub is set to launch during the second half of the year. That timing could be critical to jump-starting the IoT market.

ABI Research recently noted that the ongoing COVID-19 pandemic has stunted the expansion of IoT deployments due to tightened spending.

“COVID-19 has of course had an impact, and in the short term primarily related to manufacturing delays both in the semiconductor industry and the industries those devices serve,” said Michela Menting, research director at ABI Research, during a recent webinar. “Markets such as automotive, industrial IoT, as well as 5G equipment for example, they’ll continue to suffer a little bit longer during the predicted recession even when manufacturing is 100%.”

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