Understanding IoT Data Plans: What is Right for Your Solution?

Frank Greer
May 10, 2021 12:06:42 PM

There’s no one-size-fits-all IoT data plan, making it difficult to know what to expect when you’re preparing to launch a new IoT solution. In this post, we share how to choose an IoT data plan and what considerations to consider when evaluating connectivity providers, so you can have confidence that you’re on the best plan for your business.  

What is IoT Data?

The Internet of Things (IoT) is a network of physical objects, or “things,” embedded with sensors so they can “talk” to other devices and systems in the cloud. IoT data is shared between these sensors to facilitate communication of information such as text, video, audio, etc. The data is transmitted and stored in the cloud and can be retrieved at any time. For example, IoT data may include temperature readings in a home or the location of a car or a piece of equipment. For cellular IoT devices to do all of this, they require a data plan.

How to Choose an IoT Data Plan Provider

When looking for IoT data plans to support your connected device offerings, one of the most important factors to consider is the provider. The provider you choose for your data plan is as important as the data plan itself since there’s so much variability in pricing and what you get for the price. Here are the criteria to weigh as part of your decision. 

  • IoT expertise and experience — The provider should understand your needs and be able to support them efficiently. IoT devices are very different from traditional cellular devices. The fact that a provider can offer smartphone or tablet plans does not mean that those plans have been authorized for IoT use. No authorization means increased risk to your business.
  • Optimized total cost of ownership (TCO) — Seek a provider that includes data plan optimization and any additional services required to support your business case. If you are consistently running through your data caps month over month, has your provider offered you the right solution for your IoT application?
  • Ability to accommodate new and legacy technologies (like Cat-M1 vs. Standard LTE) — Flexibility will set your business up for future product offerings and ensure you can support your existing devices with multiple options. Your cellular data provider should have the flexibility to offer you different types of plans that are more likely to fit your needs than a “one-size-fits-all” approach.
  • Seamless roaming across established networks — You need reliable coverage that’s scalable. When you run into coverage issues, it could be that your existing provider doesn’t have the authorization or agreements in place with carriers to offer both off-net and on-net coverage, something an authorized reseller may be in a better position to support.
  • Transparent agreements — You never want to be in a position where you don’t know what you are paying for. The business agreements (and reports and invoices) from your provider should be clear and easy to understand.
  • A simple and intuitive web-based interface — Your life will be much easier if your provider has an easy-to-use cloud-based wireless subscription enablement platform that can support your business as it scales. Your provider shouldn’t make you jump through hoops to manage your devices, like requiring numerous accounts due to artificial limits that constrain the number of devices you can oversee/manage concurrently. These limits only serve to hamper your growing business operations.
  • A platform that offers lifecycle management and useful analytics — You need to know how your business is performing and have access to insights and key performance indicators that will help you respond to problems and opportunities quickly and efficiently. Metrics like this include number of active devices, total data usage, growth rates, gross margins, etc.

Authorized Resellers vs. Roaming Vendors

While going direct to the carriers is an option, it may not be ideal for many connected device companies. This is true for three reasons:

  1. Many carriers require you to agree to minimum financial commitments upfront. This requirement creates unnecessary risk for smaller or expanding companies. Authorized resellers make this commitment to the carriers, so working with a flexible reseller reduces your financial risk.
  2. If you sell products in multiple geographies/countries, you will have to create agreements with each carrier and handle the technical integrations with each carrier. Authorized resellers typically have more affordable pricing plans for worldwide markets than roaming vendors because their business models are based on global roaming agreements. Working with a reseller with global roaming agreements ensures you have the coverage you need at an affordable price.
  3. The carriers don’t offer end subscriber billing components, so you’ll need to build these capabilities yourself. Certain resellers, like Zipit, offer robust billing platforms that make your business operations much easier. 

How Much Data Do You Need?

The big question being asked by every IoT device company is, “How much data do I need?” Several factors go into determining the answer to this question. Zipit helps clients calculate the precise plan (or plans) they need based on their unique situation. The following four factors impact the amount of data usage:

    • What is the device? Different devices, by nature, use different amounts of data. A device that streams video, for example, will need more data than one that simply sends a daily temperature reading.
  • Where is the device being used? Do you need regional coverage, nationwide coverage, or coverage in various locations around the world? Will devices be deployed in rural areas with sparse tower access or within cities?
  • How is the device being used? How are your customers using the device? Customer usage habits will impact how much data you need.

  • What events trigger data usage? How often does the device check in? More events mean you’ll require more data.

A Word on IoT Data Pricing

Data plans and pricing should be customized to your specific situation. Data usage is variable, so loads will go up and down. Beware of companies offering set prices for set data packages because the pricing can’t be optimized to your situation — these companies may artificially price high because they don’t understand your realistic data usage estimates.

Get the Best Balance of Price and Service with Zipit’s IoT Platform

Zipit's IoT connectivity solution is designed to help IoT device companies target the ideal balance of coverage, network reliability, and cost-effectiveness. This platform is backed by a company with a decade of experience in the IoT industry.

Our comprehensive yet easy-to-use platform allows you to securely activate and manage IoT-enabled devices and handle customer service from a single location. Customers can log in to activate devices and manage their subscriptions.

Additionally, our team of IoT experts helps you evaluate all the relevant factors to ensure you choose the best carriers for your customers’ geographic locations and determine how much data you should plan to purchase. Because of our relationships with the various carriers worldwide, we help our clients get the best coverage for an optimal price. 

Schedule a call for a free, no-pressure demo of our platform. 

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