Africa and the Middle East (AME) is set to be the second-fastest growing region, behind Asia Pacific, for Internet of Things (IoT) revenue, as interest gains momentum.

While IoT is still in the early stages of uptake, stakeholders are exploring and identifying key areas of growth throughout a number of verticals, says data and analytics company GlobalData.

According to the firm’s latest report, ‘Telco IoT offerings and market opportunity assessment in AME’, the region’s IoT market is forecast to more than double by 2023, reaching over $20-billion.

Utilities, government and manufacturing verticals will be driving this revenue, having accounted for more than 50% of the total IoT opportunity in the area in 2018.

“These verticals account for significant spend, which is expected to continue throughout the forecast period,” says GlobalData Europe, Middle East and Africa telecoms director Houda Bostanji.

Global telcos may develop standardised use cases to cater for “common needs” across the world, including smart metering, smart cities and Industry 4.0 solutions.”

“Most expenditure will remain on the IoT software and services side, but IoT devices will be the fastest revenue growth segment, [with] costs forecast to increase as edge computing is explored and adopted. Connectivity will continue to account for the smallest share of the total IoT market opportunity, at 13% to 14%.”

She explains that telcos remain focused on seeking solutions that will increase their roles beyond the connectivity and network management layers of an IoT value chain, with ambitions of capturing a larger proportion of the revenue potential associated with IoT deployments.

“Telcos are quickly perceiving that before developing vertical-focused IoT applications, they need to act horizontally at a platform level,” Bostanji adds.

A number of telcos have launched platform-focused solutions, including open standard platform as a service, cloud and big data and analytics offerings geared towards IoT implementations in an effort to achieve scale by acting across different sectors.