Not All IoT SIM Card Deployments Are Equal. Why Treat Them as Such?
Every day we are reminded that there is no “average” IoT project because of the many unique requests we receive for our connectivity solutions. There are as many different projects as anyone can dream of, literally, and each project has its own idiosyncrasies, and therefore have distinctive requirements from their IoT SIM card connectivity provider. These requirements and need for flexibility/customization is most often seen in the data plan consumption model(s) for the project.
There are several ways that data plans can be customized/flexible. They include:
- Pooled versus Pay-As-You-Go (PAYG) plan models
- One-time payment/use (think disposable SIMs)
- Prepaid versus Postpaid
- Unusually sized data plans
- Plans for testing at manufacturer before full activation
- Limiting the countries in which the IoT SIM can operate
- Limiting the amount of Data an IoT SIM can consume
- Many other customizations
For the purposes of this article, we will concentrate on the first of this list, Pooled Vs. PAYG plan models.
Years ago, all plans were essentially PAYG. Each SIM card had their own plan and consumed its own data, or they were simply charged be MB for the data they used. These plans are almost always Prepaid. Then Pooled data was introduced where all of the SIMs on an account share a “pool” of data. This type of plan is designed for a scenario where there are some SIM cards that use more data and others use less data. So long as the overall data consumption on the account doesn’t exceed the amount of the data pool, then there are no “overage” charges and costs are very consistent and predictable. So which plan is the “right” plan for your project? To answer this question, let’s look at the pro’s and con’s of each plan type, and some typical use cases for each type of plan.
PAYG plans are excellent for projects where each SIM card will use much different amounts of data, and/or have different use cases (could be multiple projects on a single account). This offers a lot of flexibility because each SIM can have a different plan, or no plan at all and simply pay a per MB rate. Another plus to each SIM card having its own plan is in global deployments where there are some countries where the rates are dramatically higher than other countries. Having the flexibility to assign each SIM a separate plan means you are able to get the best price for the SIMs in countries with low rates and not be “forced” into paying a higher tariff based on the more expensive countries where SIMs are needed.
PAYG plans are typically used in low data consumption projects like Asset Tracking, where the device may only report a GPS location every few hours, or not at all if they aren’t deployed, or in the middle of the ocean. There could be other SIMs on these types of accounts that are reporting more often and maybe reporting more information like temperature, humidity, etc. which drive up data consumption. These IoT SIM cards will need other plans to take into account the different data usage.
Another solution type that may benefit from PAYG data plans is Vehicle Tracking/Telematics. The reason why this type of solution benefits from PAYG plans is there are sometimes vast differences in the amount of data needed between devices, depending on the use of the vehicles being tracked and the type of data being collected from the vehicles. We say “may benefit” because there are a lot of cases where the data is fairly static and PAYG may not be the right plan type.
The cons of a PAYG plan are that the plans tend to be more “cookie-cutter” like 5, 10, 25, 50, 100, etc. MB plans and the plans tend to be more expensive than Pooled data plans, especially on the lower data consumption plans; the effective per MB cost is higher than Pooled plans of similar sizes. PAYG plans also usually have “monthly minimum revenue requirements” where all active IoT SIMs have to reach a certain amount of use to meet these minimums.
Pooled data plans are best for those deployments were all of the SIM cards tend to consume the same amount of data. There are 2 ways that telecom companies structure Pooled data plans. One model, we call it the “Data Bucket” model, is where you buy a “bucket of data” and then you are allowed to add a fixed number of SIMs to use this bucket of data. An example of this might be where you are given choices of 1GB, 5GB, 10GB and 25GB of data. For the 1GB plan you might be able to add up to 250 SIMs, for the 5GB plan you can add up to 1000 SIMs, etc. The other model, we call this “True Pooled data” is where each active SIM card contributes a certain amount of data into to the overall pool, and the amount of pooled data grows as you activate SIMs.
The latter, True Pooled data, model is far and away the best and most flexible Pooled data model. The Data Bucket model pigeon-holes you into a set amount of data which the telecom thinks makes the most sense, and limiting the number of SIMs that can pool this bucket of data. The other drawback into the Data Bucket model is what if you don’t need 250 SIMs, then you will be charged more for service you don’t need. The True Pooled data model allows you to create any size plan you want. We have customers whose need is not 5MB or 10MB or 20MB per SIM, but their true average is 17MB, or 7MB, or 12MB per SIM and the True Pool data plan can handle any size plan you need; this is the most flexible in terms of data quantities.
We see Pool plans used in almost every type of solution because most projects tend to be singularly focused and all of the IoT SIM cards consume relatively equal amounts of data. One of the fastest growing categories we see these plans being used in is AgTech. While there are many solutions for Agriculture, each solution tends to have predictable data consumption rates. A good example of this is soil moisture meters. These instruments measure the amount of moisture in the soil at predetermined intervals and run 24/7 so the amount of data consumed by each instrument is fairly static. This is true if the IoT SIM card is in the device in the ground or in a gateway which aggregates data from many instruments. Other very common uses of the True Pool data plan are:
- Internet Failover
- Remote Video Broadcast
- GPS Tracking
- Connected Car
- Smart Meter
- Smart City
- Many, many more
True Pooled data plans are not only flexible in terms of the amount of data but these plans are fully customized by the countries included in the data pool. Unlike the Data Bucket data plan model or the PAYG model, True Pooled data plans include as many or as few countries to meet your particular requirements. This customization is a fantastic way to keep the cost of the plan as low as possible because the roaming cost varies in each country. To eliminate more expensive countries which aren’t needed and keep only those countries that are needed, the chances are that the cost can be lower.
So, what are the cons of the True Pooled data plans and Data Bucket plans? These plans lack the flexibility of having your IoT SIM cards use different plans. All of the SIM cards in a pooled plan must be on the same plan, in with the same cost, and with the same list of included countries. Even with these limitations, we see over 90% of our new clients gravitating to our True Pooled data plans.
If you have any further questions about the differences between PAYG and Pooled data plans, or if you are looking for a connectivity solution, we would love to hear from you. Because we offer both types of plans, we have valuable insight into each type of plan and can address any need you may have because of this flexibility. One of our IoT experts will be in touch with you if fill out our Contact Form. You can also email our team at firstname.lastname@example.org.