Japan’s Soracom launches cellular network service for Internet of Things developers

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Soracom co-founder and CEO Ken Tamagawa[/caption]

See the original story in Japanese.

Once-in-a-blue-moon news of a product which excites me is unveiled today.

Japan’s Soracom, which offers mobile data communication over its platform, on 30th September announced it had commenced Soracom Air and Soracom Beam platform services. The firm has entered into business agreement with Japanese mobile network operator NTT docomo for wholesale (L2 classification) as a Mobile Virtual Network Operator (MVNO) and provides mobile network service using NTT docomo’s mobile base stations.

Soracom Air features a core network (packet switches, line management, band limits) and a support system (customer management or charge billing) that are proprietary developments as implemented on the Amazon Web Services (AWS) cloud, unlike conventional MVNOs who had to invest heavily upon starting up operations.

As such a drastic reduction in the initial cost was wrought; moreover, the firm opening up its platform to a third party realized more attentive mobile data communication services compared with other operators.

Upon purchasing the SIM (subscriber identity module) cards from Soracom, third-party operators can use Soracom Air at a set rate, charging a minimum of 10 yen (about 8 cents) per day. The set-up enables such operators to uniformly manage the SIM like changing the communication speed, halting and monitoring communication, or configuring the process via web or API.

Furthermore, the operators can also resell the SIM to their users and determine retail prices. Soracom Air’s SIM card is available for purchase on Amazon or its website (console screen). As for Soracom Beam, offering added functions for the platform including security and such, it is described later.

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B2B2C model enabling IoT operators to provide/control their SIM cards

The outline of the Soracom platform is as above.

In a nutshell, while conventional MVNOs offer their services by utilizing ready-made core network and system, Soracom developed these on its own to allow service control to be handed over to other operators.

For example if I wanted to launch a “smart lock” business, when door operations are to be controlled from remote places over the mobile network, each smart lock would require the SIM to be inserted. Conventionally, users need an up-front contract with an MVNO for the SIM, with perhaps further costs or altered contractual terms in the offing.

In contrast, by using the Soracom Air SIM only 580 yen (about $4.8) is charged as a basic charge per line with a daily rate of 10 yen (8 cents) [or 5 yen (4 cents) if before starting use]. Moreover, data communication charges are at a metered rate of 0.2 yen/MB (0.17 cent/MB); in other words, services like smart lock — which rarely needs data communication to be performed — entail very little cost.

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Additionally, the most exceptional feature of Soracom Air is being able to control all SIMs via web, so that the smart lock operator can control a SIM such as suspending use of one’s own service. Since this can also be done via API, one can use an embedded system for control such as turning on a smart lock for example.

With this it can be more appropriately referred to as the operators’ own service.

Incidentally, the Soracom SIMs are provided in two categories, either as nano, micro or standard SIM types with only data communication or as having SMS functions, respectively.

Soracom given “scalability” by Soracom Beam

As it is Soracom is quite comprehensive, yet the firm simultaneously announced the launch of an optional service called Beam.

As mentioned above, Soracom runs on the B2B2C model. Therefore, some user operators may possibly want to offer their service for corporate customers with a closed network. In such cases, the method of ensuring security processes like encryption or authentication will certainly become an issue.

On the other hand most IoT devices which Soracom is applicable to are small-sized with problematical CPU and batteries. If carrying out encryption at the device side, a high-performance CPU would be needed and the consumption of batteries would increase. A concept behind Beam is to solve these problems using the cloud.

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With Beam, encryption, protocol conversion and data transfer to on-premise or cloud servers will be conducted at the Soracom side. All these processes run on AWS so that a highly secured network will be guaranteed. As for connection to the user operators’ services, currently cases of private line are at the testing stage.

Challenging global expansion, cultivating partnerships

There are various forecasts as to growth of the IoT market. For example, according to a research report by Business Insider, the total number of devices accessible to network (e.g., smartphone, PC, tablet or connected car) is predicted to double and the shipment will reach 67 billion by 2019 at a compound annual growth rate of 61%. If the researched items are not limited to only devices for short-range communication (e.g., Wifi or Bluetooth) but include that for mobile communication such as Soracom, these numbers are most likely to increase further.

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Source: Growth in the Internet of Things will peak in 2015 by Business Insider[/caption]

Soracom’s approach is indeed an outstanding idea, however, they need to negotiate with carriers in each country, so as to develop the global market, or there is the possibility that other developers might develop it by themselves. Soracom CEO Ken Tamagawa also points out the importance of early global development.

Frankly speaking, I cannot read the future growth in number of IoT devices although various research reports about this have been produced. The current number of devices that one person has is about ten, and hence it is most likely to increase further in the future. As for service overseas, our main policy is negotiating with carriers in each country because adoption of roaming may mean excessive costs for users. Soracom’s core business is on AWS so we think we can expand our business in any country. We are now examining which market is suitable.

We should not classify Soracom with other cheap SIMs.

It indeed has the merit as to pricing; however, if widespread recognition is granted to it as a platform equipped with mobile data communication available for new business, ostensibly many startups may be spawned here.

Soracom will in fact start up a partnership program called Soracom Partner Space (SPS), to support the business launch on their platform. We look forward with high expectations to products or business that will be nurtured under this ecosystem.

Translated by Taijiro Takeda
Edited by “Tex” Pomeroy and Masaru Ikeda

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