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Business model innovation driven by the internet of things technology, in internet service providers’ business context

Abstract

Business model innovation (BMI) describes the efforts made by the business in finding new business logic or new ways of value creation. Technological change is deemed to be the main driver of BMI. This study focused on the emergence of the internet of things (IoT) as a technological driver of BMI in internet service providers’ (ISPs) business context, in the scope of wired access (WA) and fixed wireless access (FWA) providers, and addressed new ways of value creation for ISPs driven by IoT. To this end, a four-stage BMI process, including; initiation, ideation, integration, and evaluation, was used. In the implementation of the BMI process, we used the data extracted from the literature of IoT, BMI, and ISP business, as well as those obtained through interviews with experts. As a result of the process implementation, we identified possible ideas for the value creation of ISPs in the IoT domain, based on connectivity service providing, cloud service providing, technical solution providing, and business solution providing. Then, we proposed ISPs’ business models in the IoT domain, in accordance with the identified ideas, based on Hedman and Kalling’s ontology. To boost the validity of the proposed business models, the stress testing approach was recruited at the final stage of the BMI process. Implementing BMI, driven by IoT, in the ISPs’ context, reduces constraints imposed by the paucity of knowledge in both BMI and IoT, helps ISPs’ managers to anticipate and identify the IoT-based opportunities, and provides a starting point for further studies on new ways of value creation in other businesses in the telecom industry.

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Notes

  1. 1.

    Access to the internet and its integrated services.

  2. 2.

    Which means the dependency on the experts' interpretation.

  3. 3.

    Or Identification stage.

  4. 4.

    i.e. fit to the capabilities, affordable loss and customer demand.

  5. 5.

    A service package consists of three parts, namely core service, enabling service and enahancing service (Huotari & Hamari, 2012).

  6. 6.

    This classification can help to explain the ideas of ISPs' value creation.

  7. 7.

    Required expert judgment, required collective consensus on the results, the existence of complex and interdisciplinary conditions, disagreement on a result, and inadequate knowledge (Beretta 1996; Landeta 2006; McKenna et al. 2002; Powell 2003).

  8. 8.

    a representation of data in the form of a map in which data values are represented as colours.

  9. 9.

    As well as Deloitte (2015) report.

  10. 10.

    Source: IoT Global Forecast & Analysis 2015–2025, Machina Research, August 2016. Excludes consumer audio-visual applications).

  11. 11.

    Up to 40 km in rural and up to 10 KM in urban areas.

  12. 12.

    Maximum battery life of 10 years.

  13. 13.

    Less than 5 dollars for each device and less than 1 dollar for an annual subscription of each device.

  14. 14.

    Means using fibre infrastructure close to the end customers; it doesn’t mean deploying fibre deeply.

  15. 15.

    $3.9 trillion to $11.1 trillion by 2025.

  16. 16.

    Including; Smart city, Connected industry, Connected buildings, Connected car, Smart energy, Connected health, Smart supply chain, Smart agriculture, Smart retail and others.

  17. 17.

    Total available market for IoT technology by 2025 in Telecom industry could be up to 55 $B.

  18. 18.

    The IoT is also benefiting from infrastructure improvements that have enhanced connectivity.

  19. 19.

    LPWAN fills an unmet need in IoT connectivity.

  20. 20.

    IoT grows in tandem with LPWA.

  21. 21.

    By 2022, we expect that most IoT applications will use LPWA networks.

  22. 22.

    Including the improvement of the individuals’ lifestyle due to the optimal control of their daily lives.

  23. 23.

    Including the optimization of the processes, intelligent management of the products, and increasing the scalability and efficiency of the business.

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Appendices

Appendix 1

The direct result of content analysis based on Atlas-Ti software related to IoT domain is presented on Fig. 

Fig. 7
figure7

Segmentation of the IoT studies into fourteen different codes

7.

The direct result of Atlas ti related to the family members of the mentioned codes in IoT domain, is presented as follows:

figurea
figureb
figurec

Appendix 2

The direct result of content analysis based on Atlas-Ti software related to BMI domain is presented on Fig. 

Fig. 8
figure8

Segmentation of the BMI studies into four different codes

8.

The direct result of Atlas ti related to the family members of the mentioned codes in BMI domain, is presented as follows:

figured

Appendix 3

Glossary of terms

BLE Bluetooth low energy
BMD Business model development and business model design
BMI Business model innovation
CIoT Consumer IoT
CRM Customer relationship management
D2D Device to device
eTOM Enhanced telecom operation map
FAB Fulfillment, assurance, billing
FWA Fixed wireless access
HetNet Heterogeneous network
ICT Information and communication technologies
IIoT Industrial IoT
IoT Internet of things
ISPs Internet service providers
LoRaWAN Long range wide area network
LPWAN Low power wide area network
LTE Long term evolution
MCC Mobile cloud computing
MEC Mobile edge computing
MNO Mobile network operators
MTC Machine-type communication
MWA Mobile wireless access
NBIoT Narrow band internet of things
NPD New product development
QoS Quality of service
RBT Resource based theory
S.P Service providing
SSIM Spectrum sharing and interference management
STA Stress testing approach
TCI Telecommunication company of Iran
Telcos Telecom companies
TIC Telecommunication infrastructure company
VCT Value configuration theory
WA Wired access
WNFV Wireless network function virtualization
WSDN Wireless software-defined networks

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Hanafizadeh, P., Hatami, P., Analoui, M. et al. Business model innovation driven by the internet of things technology, in internet service providers’ business context. Inf Syst E-Bus Manage (2021). https://doi.org/10.1007/s10257-021-00537-0

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Keywords

  • Internet service providers
  • Internet of things
  • Business model innovation
  • Stress testing approach
  • Uncertainty