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Blog/ Sep 7, 2018

Why State Based Pricing is Important in IoT

The state of an IoT SIM will inevitably affect monetization and how it affects the way you conduct business. We're here to help you decipher how to make it work and help you along the way.


IoT (Internet of Things) SIMs (Subscriber Identity Modules) are quite similar to conventional SIMs in that they enable service providers to provide connectivity services to their end customers.


But the fact is, is that conventional SIMs and IoT SIMs are not built alike. 


IoT SIM cards help improve productivity, accuracy & efficiency.


An IoT SIM needs to be smarter, more robust, deliver multi-operator coverage and superior quality.


Fun Fact: Back in 1991 the first ever user SIM card was born.
To this day, business are still using this technology to connect their devices.


What is State Based Pricing?

A common tactic among service providers is that they too want to charge a recurring subscription price for products and services that they sell. 


Many service providers often tack on additional charges based on usage. 


But - with an IoT SIM, subscription pricing can get more complicated...

  • A SIM that has not been already supplied for instance, would have a different price than a SIM that is already in a fully active state.
  • An active SIM with usage can be subject to a different rate than an active SIM without usage.
  • State based pricing accounts for the fact that subscription and usage charges will vary based on the state of the SIM.
Need a Strategy?
Deriving Value from the Internet of Things

The SIM and One Time Charges

What's a service provider going to do when it comes to billing?


As part of your monetization strategy, you will want to charge a combination of recurring and one time charges for SIMs or SIM bundles.


One time charges include but aren't limited to items like:

  • Configuration fees
  • SIM activation fees
  • Cancelling fees.

These fees occur during state transitions. For instance an activation fee may occur during a transition from pre-active to active, while a cancellation fee can take place from any usage state to cancelled.

Efficiently monetize Your Offerings
Numerex and LogiSense Discuss the Internet of Things

Volume Pricing

Motivate your customers to stick around using incentives.


As customers get into contractual agreements with thousands of SIMs, service providers need to account for increased state variations.


At any given time in a billing cycle it is possible that customers will have SIMs in different states and subject to different price plans.


Furthermore, as a service provider, you will want to incentivize your customers with preferred pricing based on volumes.


Dealing with this complexity of volume thresholds and tiers can be a daunting challenge for most billing systems. 


Curious About Volume?

Building the Bottom Line with Usage Rating

Final Thoughts

IoT SIMs and regular SIMs are not built the same, make sure you are prepared to deal with different SIM states.


One time fees will pop up alongside recurring fees.


Incentivize your customers to stick around with preferred pricing plans based on volume of use.


IoT SIMs and billing can get complicated, but it doesn't have to be. Find out how LogiSense can meet your billing needs.

Want to Continue Learning?
Step-By-Step Guide to Selecting a Modern Billing Solution
Is Your Organization GDPR Compliant?
The Challenges of Smart Billing for Periodic or Seasonal IoT Devices
4 Ways to Execute Your IoT Strategy with LogiSense
5 Ways to Monetize the Internet of Things
Looking to join the Logisense Team? We're Hiring!


EngageIP allows you to define as many states and state transitions for a given service as needed.


Monthly recurring charges and one time pricing can be customized per state and per state transition. There is also the option of prorating charges to accommodate mid period state transitions.


Price plans can also be set up and customized to personalize any account depending state pricing and volume pricing.

About the Author

Chris Brown /

Chris has over 20 years of experience in the telecommunications industry dealing with Fortune 2000 enterprises and service providers globally. As VP of Innovation Chris interacts in the market and internally providing: technical leadership and vision, mentorship, and creative problem-solving.


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