Press Release - Regulation has the potential to disrupt the growth of the Internet of Things - survey

20 August 2014

Based on surveying telecoms regulators and analysing diverse regulatory environments worldwide, Machina Research concludes that several strands of regulation have the potential to disrupt the adoption of the Internet of Things, most immediately those related to permanent roaming of mobile connections

Machina Research today launched its M2M and IoT Regulation database. Based on extensive surveys of telecoms regulators, complemented by secondary research and our own analysis, the key findings were as follows:

  • The regulatory position over permanent roaming* is unclear, with over 80% of regulators having no explicit rules. The likelihood is that regulation will get tougher, particularly in Europe. This has significant implications for mobile connections reliant on roaming either through necessity (because the carrier has limited geographical footprint) or choice (because roaming SIMs can take advantage of national roaming).
  • One-third of regulators have implemented a dedicated numbering scheme for M2M devices. Most are in Europe. Machina Research does not see the particular value in implementing such schemes.
  • Data sovereignty issues may place onerous obligations on where data can be managed, and currently the distinction between payload and communications is not well defined by most regulators.
  • The EU’s General Data Protection Regulation will affect the provision of IoT around the world. Anyone involved in the IoT must be aware of the new rules about user privacy and how data can be stored and distributed. It’s not just about Google and the “right to be forgotten”.
  • Many of the explicit legal and administrative barriers are being removed, for instance with countries such as Brazil and Turkey reducing taxes on M2M SIM cards. A few remain, however, such as certain countries’ requirements for SIMs to be registered to a particular person or legal entity at the point of activation. This removes some flexibility in selling pre-activated off-the-shelf M2M devices.
  • There is typically no specific spectrum allocation for M2M connectivity. A number of regulators, particularly in Europe and North America, are currently looking at ‘White Space’ spectrum in the UHF band and how that might be accessed for, amongst other things, IoT.

Matt Hatton, Director at Machina Research commented: “As with all new technologies, in the Internet of Things regulation lags behind technical and commercial developments. To date this hasn’t caused a lot of problems, but it won’t be long until there is something of a crunch. Issues such as permanent roaming and data sovereignty have the potential to slow down adoption. Government legislators have been quite good at eliminating some obvious barriers such as punitive taxation, while the EU’s position on data privacy is timely. Telecoms regulators, however, have a number of areas where action is needed now. They have generally been most progressive is the one that is least important: dedicated numbering schemes.”

Focusing particularly on the issue of permanent roaming, Hatton commented: “We anticipate an increased regulatory crack-down on permanent roaming in the coming years. Those mobile operators that currently support lots of connections that way had better do two things. Firstly stop selling more, as that’s only exacerbating the problem. Secondly build alliances with other operators to ensure local connectivity in every country.

This press release is available to download as a PDF.

Subscribers to the Machina Research Advisory Service can download our Research Notes (based on the survey analysis, and all published in August 2014) on the topics of:

About the M2M and IoT Regulation Database

The Machina Research M2M and IoT Regulation Database is based on surveying regulators worldwide, supplemented by secondary research. It focuses on a number of key areas relating to M2M and IoT regulation, including the following:

  • Permanent roaming – The ability to offer services globally is a critical one for supporting many vertical sectors including automotive and consumer electronics. Regulatory prohibition of permanent roaming will fundamentally influence how connectivity is provided.
  • National roaming – The ability to make use of multiple networks within a territory will be useful for many M2M and IoT applications. However, regulatory positions vary with some countries prohibiting the use of national roaming.
  • Numbering – Regulators around the world have seen fit to introduce dedicated number ranges for M2M.
  • Spectrum licensing – Technology choices for delivering M2M and IoT services may depend on what, how, and how much, spectrum is made available. The availability of White Space might have an influence of how M2M/IoT evolves, while there are licensing issues related to the use of alternative technologies such as Low Power Wide Area (LPWA).
  • Data sovereignty – Different countries have starkly different rules about how data needs to be managed, for instance restrictions on whether the data can leave the country.
  • Other regulatory issues – There are a number of other regulatory issues, including subscriber registration and taxation, which will have an impact on M2M and IoT.

Full profiles for each country’s regulations are gathered together in country profiles. Machina Research will continue to extend and enhance the coverage of the database in future. For more details, visit the M2M and IoT Regulation Database page.

About Machina Research

Machina Research is a technology research and consulting firm focused on the emerging opportunities associated with new forms of connected device. We provide market intelligence and strategic insight to help our clients maximise opportunities from these rapidly emerging markets. If your company is a mobile network operator, device vendor, infrastructure vendor, service provider or potential end user in the M2M, IoT, Big Data or mobile broadband space, we can help. For more information visit the What We Do page.


For further comments or more information on this press release, please contact: Matt Hatton, Director, Machina Research

*Permanent roaming describes a situation where a device is permanently connected in a country other than its nominal ‘home’ territory, as defined by the Mobile Country Code of its IMSI. It relies on its operator’s roaming partner(s) for connectivity.

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