The acronym IoT (Internet of Things) has what it takes to become popular: there are more connectable objects on the planet than connected people, which has given rise to fantasizing about the magnitude of the market. In reality, it is a very long value chain, which goes from the minuscule, the sensors, to the voluminous, the storage of the generated data. But in between there are different layers that are markets in themselves, so no one could say that they control the IoT market, even though they may lead certain segments.
Telecommunications operators have been interested from the beginning. One of them, Vodafone: its Spanish subsidiary had 5.2 million cellular lines (SIM cards) dedicated to IoT as of March 31, with an estimated share of 40.6% in this segment, cellular connectivity based on technology Narrowband NB-IoT (excludes Wi-Fi and other smaller solutions). Daniel Barallat, director of Vodafone Spain's IoT business, explains it this way: “Years ago, IoT was talked about with a certain lightness; the devices tended to be elementary and their function was to enable a connection to send the data, without managing their efficiency or the battery, which today are two basic requirements”.
With the entry into force of a European directive on cybersecurity, the market has turned towards requirements that give advantages to cellular connectivity, he points out. “In our case, we added a layer of device management until the delivery of the data, generally in vertical sectors; this profile matches the company's business model”. By the way, the group accumulates 162 million lines in total.
Vodafone Spain has set up a marketplace in which third-party companies offer their own solutions: hundreds of thousands of cards in the security sector, in logistics and associated with geolocation. Other deployments anticipate the incorporation of intelligence into electrical distribution. Vodafone wants to transcend the role of carrier: "We feel comfortable with vertical applications because we control the network and because we have an advanced laboratory in Spain for the international certification of devices."
"The Spanish market lacks a business substrate in which large companies abound taking off services around the world," says Barallat. Is it a limitation? “It is a fact that thousands of Volkswagen, BMW or Ford cars circulate in Spain whose lines have been contracted by other subsidiaries of the group, so they do not have Vodafone Spain SIM cards”. Value and volume do not match: “The percentage of billing for services in Spain is much higher than the relative weight of the cards we supply here. I understand that the same thing happens to the competitors”.
Vodafone is entering a prepaid business model, through the connected beacons that all vehicles must carry by January 1, 2026 at the latest. "If you have to sell a piece of equipment to which you must give connectivity throughout its life cycle, the prepaid model is imperative”. With the current figures, it would be between 30 and 35 million to add to the total of 11 million current SIM cards for IoT in Spain.
In addition to road safety, there are other promising verticals; the most immediate is the digitization of the water cycle. It is a pressing problem in Spain: it is intended to drastically reduce losses in the distribution of household water in two or three years, which currently ranges between 25% and 30% depending on the city. Water meters, at least another 15 million IoT NB-IoT lines, will multiply the installed base.
