Delivering IoT connectivity across borders presents not only technical challenges but also regulatory hurdles. As region-specific data sovereignty laws become more prevalent, communications service providers (CSPs) must ensure seamless international operations while adhering to diverse compliance obligations. Kaleido Intelligence’s report on “The Connectivity Revolution” highlights this issue. It reveals that 59% of IoT CSPs, including MNOs, MVNOs, and MVNEs, see regulatory compliance as a top business challenge. They rate it higher than cost concerns, security, or platform complexity. Failure to comply can lead to severe penalties and losing business to faster-moving competitors.
The IoT landscape is rapidly advancing. CSPs are not only multiplying swiftly but also reaching a broader range of regions. However, increasing local data privacy mandates pose significant challenges. The Kaleido report underscores this evolution, indicating the shift from traditional concerns like security and connectivity costs to the pressing need of managing global operations compliantly.
Key regulations, such as GDPR in the EU, India’s DPDP Act, and Australia’s Privacy Act 1988, are setting world standards. Yet, many countries like Brazil, Turkey, and the UK impose their specific rules. This demands that IoT CSPs handle, store, and route data differently based on geography. For applications like fleet management or smart manufacturing, compliance at every network layer is essential.
Local breakout services offer a remedy to these regulatory pressures. They act as secure data routing points within regulated jurisdictions. By processing and storing data locally, these servers prevent sensitive information from crossing restricted borders. The advantages are twofold: they ensure compliance and offer performance boosts, reducing latency and enhancing response times, critical for applications such as autonomous vehicles or telemedicine.
The Kaleido survey indicates that 79% of IoT service providers prioritize local or regional breakouts for compliant and optimal connectivity. Only a small fraction of MNOs and non-MNOs have no plans to implement such strategies soon. Local breakouts address the complex issue of geographically restricted data transport. They confine data within specific regions according to regulatory needs.
While connectivity management platforms and multi-IMSI or eSIM IoT technologies provide scalability, their effectiveness amplifies when combined with a robust, compliant infrastructure. The new GSMA SGP.32 specification eases managing global IoT deployments, encouraging deeper collaboration among MNOs and OEMs. CSPs must prioritize data localization and ensure transparency and real-time visibility to meet both performance and legal standards.
Adopting a compliance-by-design strategy enhances growth opportunities and bolsters customer trust. In today’s connected landscape, data privacy and compliance can drive significant business growth. As IoT connectivity becomes vital for various industries, regulation-ready networks will identify market leaders. By turning regulatory challenges into opportunities, IoT service providers can gain a decisive edge.
