Even assuming huge new markets for internet of things emerge, and even if huge amounts of new connections revenue are therefore created for mobile and other service providers, there are many pesky business model issues.
Consider only the prosaic matter of how a service provider bills for such a service. In a consumer setting, any stand-alone (by device) method might have billing costs that are a huge percentage of the actual connection revenue generated. In some instances, the cost of rating and sending a bill might exceed the revenue, or cost so much that there is no profit from providing the connection.
If you assume connectivity has to be provided, the issue is how that connectivity is supplied, and “who” pays for it, and how all that gets done on a sustainable basis.
Amazon provides one model, where the appliance supplier pays for connectivity (mobile network) if Wi-Fi is not available, and then uses Wi-Fi as the preferred connection. In that model, connectivity somehow is build into the use of an appliance (does a purchase become a rental?).
Wi-Fi might be an easy choice, as it shifts payment to the owner of the appliance (user pays for the internet access connection). In a few cases perhaps a third party pays (advertising).
That same model could hold for multi-device IoT plans sold by mobile operators, just as they now sell “multiple-device” plans. That has the user paying.
There are exotic possibilities, such as collaboration between a refrigerator manufacturer and one or more large grocers, where an appliance maker works with the retailer and gets a percentage of automated grocery orders. Those might be relatively complex deals for almost anybody but an Amazon.
The point is that moving up the stack might be the best way to ensure that IoT actually produces enough value to create a bigger revenue stream. No service provider is going to want to mess around with billing for a connection that generates less than a dollar a month, at scale, on a stand-alone basis.
Even assuming it is an enterprise or business customer that “buys” the connection service, and billing is in bulk, the service provider might still have to track usage, no matter what the billing cycle.
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