In 2026, global IoT connectivity will face a rebalancing as enterprises abandon self-built models. They will favor managed services to mitigate operational risks.
For CIOs managing distributed assets, a specific operational dilemma has persisted for the past decade. A significant gap exists between the promising vision of IoT and the cumbersome processes of actual maintenance. For years, we’ve been trying to cobble together global networks by piecing together carrier contracts and evolving technology standards. This model is crumbling.
According to Eseye, 2026 will see a “major overhaul” across the industry. The complexity of global connectivity has reached a tipping point where in-house teams cannot handle it. As a result, the shift is towards security, with enterprises moving away from self-built approaches. They are now opting for managed services to offload risk from their balance sheets.
The core challenge has evolved beyond mere “connectivity” to “managing global IoT connectivity in a smart, secure, and reliable way.”
The Reality of Dual-Speed Cellular Networks
The most direct catalyst driving this shift is the fragmentation of global cellular infrastructure. While the US and Asia-Pacific markets are accelerating their move to 5G Standalone (SA) networks to unlock low latency and network slicing capabilities, Europe is struggling.
Eseye COO Adam Hayes warns that European operators lack investment funds due to roaming regulations. They are currently primarily deploying 5G Non-Standalone (NSA) networks. While NSA offers improved speeds, it relies on the traditional 4G core network. Therefore, it cannot provide the full functionality of 5G.
This poses a significant challenge to hardware lifespan. Equipment deployed today, with an expected lifespan of 10 to 15 years, must survive in a fragmented environment. It needs to be backward compatible with European 4G networks while also being forward compatible with leading-edge 5G SA.
This fragmentation is a major reason for the stalled adoption of integrated SIM cards (iSIM). Engineers are reluctant to adopt a single design as the technological foundation continues to evolve. A wise move in 2026 is to adopt a defensive strategy. This involves designing to support multiple radio access types (multi-RAT) to reduce investment risk.
2026 Reveals the Pitfalls of “DIY” IoT Connectivity
Theoretically, the new SGP.32 eUICC standard solves this problem by enabling carrier-agnostic connectivity. However, in practice, it can lead enterprise IT teams into a “DIY illusion.”
Paul Marshall, co-founder and chief business officer of Eseye, believes that simply viewing SGP.32 as a technical specification ignores its underlying business significance. He predicts that 2026 will be a year of “the collision between dream and harsh operational reality.”
Controlling your own switching profile means you effectively become your own virtual operator. This incurs huge overheads: negotiating contracts with various operators, reconciling bills in multiple currencies, and managing support teams across time zones. Technically, enterprises must also verify that switching device profiles from one operator to another will not fail. This is a cumbersome testing task that few IT departments can handle.
As CFOs reassess the pros and cons of “make-or-buy”, we are likely to see a policy “180-degree turn.” The success of SGP.32 lies not in its ability to help businesses achieve operational independence, but in its ability to act as an engine for managed services. This approach abstracts this chaotic situation into a single contract.
Carriers Will Have to Choose Their IoT Connectivity Direction in 2026
The pressure isn’t limited to enterprise users. Mobile network operators (MNOs) are also facing an existential crisis.
MNOs’ traditional IoT platforms—often outdated technology stacks like Cisco Jasper—significantly erode profits when applied to low-margin IoT devices. Eseye’s CTO, Ian Marsden, believes MNOs will be forced to “choose their direction” by 2026.
We’ve already seen companies like Vodafone divest their IoT divisions. Marsden calls this “Route One”: exiting or spinning off the IoT business to protect the high-margin consumer handset business. “Route Two” involves partnering with specialized connectivity service providers to completely overhaul the cost structure.
For enterprise buyers, the risk lies in vendor stability. If your MNO partner doesn’t have a clear strategy, you risk inheriting their legacy technology debt. Marsden suggests asking pointed questions about global support in regulated markets. If the answers are vague, the platform may not be suitable for the modern IoT economic model.
A True Killer Application for 5G Emerges
As 2026 approaches, while the industry continues to grapple with structural challenges in IoT connectivity, a clear application scenario for 5G is finally emerging. It’s not autonomous driving or remote surgery, but Fixed Wireless Access (FWA).
Eseye CEO Tony Byrne describes FWA as “the killer application for 5G that has been hidden from view for a long time.” It solves a seemingly mundane yet crucial problem: providing highly reliable broadband to commercial locations, pop-up retail stores, and smart city infrastructure. These are locations where fiber is either too expensive or too slow to deploy.
Until recently, operators have outsourced the high-value managed layer of FWA to third-party distributors. In 2026, mobile network operators (MNOs) are likely to aggressively “move up,” bundling hardware, security, and connectivity into a single managed service. Consequently, this transforms FWA from a niche backup solution into a primary connectivity option.
Data as a Guardian of Artificial Intelligence
Ultimately, these IoT connectivity challenges serve a higher purpose: to fuel the next generation of automation. We are moving towards a “perceptive AIoT” (AIoT), where autonomous agents (not humans) will manage supply chains and production lines.
Eseye Executive Chairman Nick Earle points out a critical vulnerability in this model: AI agents are prone to “illusions” when lacking contextual information. In a business environment, agents fabricating facts can pose serious risks.
Real-time data from the physical world is the only “real data” to ensure the accuracy of these models. For example, the Volvo Group is connecting 500 million assets not only for monitoring but also to provide security data for AI models for preventative maintenance. By 2026, connectivity will become a strategic asset to prevent catastrophic business errors caused by AI.
Businesses must stop viewing SGP.32 as a DIY project and instead validate whether their connectivity partners can absorb the technological debt of a fragmented 5G world. Today, operational resilience depends on ensuring the data supply chain is robust enough to support intelligent agent AI.
The era of “good enough” IoT connectivity will end in 2026. A major overhaul is needed to rigorously audit your operational risks.