TechCo vs. Telco: Why Telcos Must Start Building Again, Especially in IoT

24.07.2025
guide-image

The gap between technology companies (“TechCos”) and traditional telecommunications companies (“Telcos”) is widening. What sets TechCos apart from Telcos today isn’t the networks they run, it’s what they’re building on top of them.

While hyperscalers and digital-native players continue to capture most of the growth through software, platforms and data-driven services, many Telcos remain stuck. They invest heavily in infrastructure but struggle to create new sources of value beyond connectivity.

This divide is even more visible in IoT, where connectivity is treated as a commodity and real value goes to those building and running the platforms above it. To stay relevant in the next wave of digital transformation, Telcos need to move beyond selling bandwidth. They must rediscover how to build; developing software, platforms and tailored digital services that extend well beyond the SIM card.

The TechCo Playbook: Own the Platform, Own the Value

TechCos like Amazon, Microsoft, Google and newer IoT startups follow a straightforward approach:

  • Build platforms for data, AI, device management, security and billing
  • Attract ecosystems of developers and partners
  • Monetize through recurring services, upsells and new business models 

This is why AWS is more than a cloud infrastructure provider -  it’s an innovation engine. Or why Apple’s revenues go beyond hardware to include services, subscriptions and ecosystems.

In IoT, TechCos are delivering end-to-end platforms that handle device onboarding, data collection, analytics, security and AI. They make it easy for enterprises to deploy IoT at scale, hiding the complexity of networks underneath.

The result? Whether it’s NB-IoT, LTE-M, 5G or fiber, connectivity becomes invisible to the end customer. It’s a cost line, not a strategic advantage.

The Telco Dilemma: Stuck Selling the Pipe

Most Telcos focus on infrastructure. They’ve spent billions rolling out 5G, IoT-specific network slices, private networks and nationwide coverage.

Too often, that’s where innovation ends. IoT connectivity is sold as a commodity: cents per MB, dollars per SIM. Meanwhile, the real value: platforms, dashboards, analytics and insights, goes to others. 

This makes Telcos vulnerable to becoming wholesalers in the IoT value chain, while TechCos and industry specialists own the customer experience.

Why Telcos Need to Build Again, Especially in IoT

To stay competitive, Telcos must shift from being connectivity providers to platform builders and solution orchestrators. Here's why doing actual software and product development is critical.
 

  1. IoT Needs More Than Connectivity
    Enterprises want outcomes, not data pipes. They want to track assets, cut energy use, predict maintenance and improve safety. That requires data platforms, AI and vertical applications — areas Telcos can lead if they commit.
     
  2. Own the Customer Relationship and the Data
    Selling only connectivity leads to transactional relationships. Offering platforms or industry-specific solutions makes Telcos strategic partners and lets them use the data flowing through their networks to create more value.
     
  3. Stand Out in a Crowded Market
    If every Telco resells the same IoT management software, there’s no differentiation. Building unique digital tools, local offerings or customizable platforms creates loyalty and pricing power.
     
  4. Tap into New Revenue Streams
    By owning the platform, Telcos can charge for device management, analytics, SLA-based services, cybersecurity and more — moving beyond per-MB pricing. 

What Building Actually Looks Like

Not every Telco needs to become Google. But they do need to develop internal capabilities around product development: 

  • Hire product managers, engineers, UX designers and data scientists
  • Use modern tools: cloud-native architecture, microservices, open APIs and AI libraries
  • Build modular IoT platforms that work across industries
  • Support developers with clear APIs, sandbox tools and documentation
  • Embrace agile methods and iterate based on user feedback 

The Stakes Are High 

As billions of devices connect from smart meters to autonomous robots, IoT will form the backbone of industries and cities. The key question:

  • Will Telcos use their network expertise to become end-to-end solution providers?
  • Or will they remain infrastructure players while others reap the rewards? 

It comes down to one thing: whether they choose to build.

Final Thought

Telcos already have trust, scale and infrastructure. What many lack is the mindset and skill set to create software products and differentiated platforms.

But if they start now by investing in development teams and building distinctive IoT solutions, they can capture significant value.

At emnify, we’ve built our platform with the same mindset—giving businesses the speed to scale and the control to manage connectivity on their terms. Curious what that looks like? Explore our product demo.

Let’s talk strategy and success stories. Get in touch with us today.
Image of Martin Giess

Martin Giess

Martin Giess is co-founder of emnify, where he oversees the technical execution of emnify’s product vision. He has 15 years’ experience as a technology expert in agile development of innovative telecom services. Before founding emnify, he held technical VP positions at Syniverse and MACH.

Related Posts

Image for post AI in Telecom: Why It’s the Next Battleground for Network Survival and IoT Domination

AI in Telecom: Why It’s the Next Battleground for Network Survival and IoT Domination

14.07.2025 – Executive Insights

As a founding CTO and co-founder of emnify, I’ve been closely watching how artificial intelligence (AI) evolves from a buzzword into a practical tool transforming the telecommunications landscape. The impact of AI on telco is threefold: It drives network utilization through new data-hungry use cases. It integrates directly into mobile networks to optimize both the RAN and the core. It empowers enterprises to manage and optimize their IoT deployments in smarter, more automated ways. Let’s explore these in detail. Will AI use cases drive network utilization on mobile networks? Absolutely. We’re only at the early stages of what this means for mobile operators and infrastructure providers. Generative AI applications, from real-time voice synthesis to multimodal assistants combining video and text, are pushing unprecedented volumes of data across mobile networks. Even seemingly simple consumer services like AI-enhanced translation or live transcription involve constant back-and-forth communication with cloud models. Consider: Edge-based AI cameras on construction sites sending continuous video streams for anomaly detection or compliance, often over 4G/5G. Retail robots using AI vision to track inventory, uploading rich datasets in near real-time. Autonomous drones relying on AI for navigation, uploading telemetry and video back to control centers over mobile networks. These examples don’t just add a handful of megabytes; they multiply demand on both uplink and downlink. As AI moves into more latency-sensitive, real-time applications, we can expect tighter integration with mobile networks. How will AI be used inside mobile networks? AI is not only driving demand on networks; it’s also making those networks smarter and more efficient. On the RAN side: AI/ML is increasingly embedded in radio access network software to handle: Predictive traffic management, where machine learning forecasts demand spikes by hour, day, or event, adjusting resources like spectrum or power accordingly. Beamforming and massive MIMO optimization, where AI algorithms determine the optimal beam patterns in near real-time, improving both coverage and capacity. On the core side: AI helps operators: Automate slice management, critical in 5G SA (Standalone), to allocate resources to enterprise customers on-demand. Detect anomalies and prevent fraud by continuously learning from traffic patterns. Predict and pre-empt failures, reducing downtime and enhancing SLAs. Telcos can now move towards intent-based networking, where you describe the desired outcome, and AI dynamically configures the network. It’s no longer about static profiles; it’s about continuous learning and adjustment. How will enterprises use AI to optimize their IoT connectivity? This is an area close to my heart. Many enterprises today struggle with managing global fleets of connected devices, from balancing roaming profiles to ensuring consistent performance across diverse networks. AI is changing this by: Learning optimal connectivity patterns: Instead of static roaming lists or manual APN switches, AI can analyze signal quality, cost metrics, and usage to proactively select the best network. Predicting SIM churn or device issues, allowing preemptive maintenance. Automating policy enforcement, e.g., instantly throttling or isolating suspicious devices. As an example, I was recently granted a European patent (EP4401436) on using AI to optimize eUICC (embedded SIM) settings. Our approach analyzes connectivity data across millions of sessions and automatically updates eSIM profiles or network preferences on the fly over the air, maximizing uptime and minimizing cost without manual intervention. This is exactly the kind of intelligence enterprises will expect as they deploy thousands (or millions) of IoT devices globally. Closing thoughts AI is no longer just a layer on top of telco; it’s woven directly into the fabric of mobile networks. It’s driving more traffic through innovative applications, optimizing the very networks that carry this traffic, and putting powerful tools in the hands of enterprise customers to streamline their IoT connectivity. As the ecosystem matures, we’ll see networks that are not only faster and more reliable but also fundamentally more adaptive, learning, predicting, and self-optimizing in real-time. I’d love to hear your thoughts. How are you seeing AI shape your connectivity strategies, whether as a telco, enterprise or tech innovator? Add your comments to my LinkedIn post here.
Image for post A New Security Paradigm: Native, Clientless SASE for Mobile Connectivity

A New Security Paradigm: Native, Clientless SASE for Mobile Connectivity

10.06.2025 – Knowledge Hub

As the modern workforce becomes increasingly mobile and cloud-dependent, organizations face a critical challenge: how to deliver secure, high-performance access to enterprise resources from any location, on any device, without increasing complexity. Traditional approaches to secure mobile access typically rely on VPNs or client-based solutions, which often introduce friction, require constant updates and struggle to scale gracefully.
Image for post Scaling IoT with Confidence: Compliance, Speed and Control through SGP.32

Scaling IoT with Confidence: Compliance, Speed and Control through SGP.32

13.05.2025 – Knowledge Hub

The world of cellular IoT connectivity is undergoing a transformation. At the center of this shift is the IoT eSIM, built on the new SGP.32 standard. While earlier eSIM models promised flexibility, they often fell short - relying on outdated protocols or requiring tight operator coupling. SGP.32 changes that. This new standard doesn’t just simplify switching providers. It helps enterprises navigate regulatory complexity, improve operational resilience and deploy at scale, all while improving control over compliance. As deployment timelines shrink and global reach becomes a requirement rather than a luxury, SGP.32 positions itself as a foundation for the next era of connected devices.