How MSPs Can Build Recurring Revenue with IoT Connectivity

Cellular connectivity can give MSPs another recurring revenue stream without requiring an entirely new service model. If you already deploy and support connected devices, backup routers, cameras, kiosks or other distributed infrastructure, those devices also need connectivity that someone has to supply, manage and support.

This guide covers how MSPs can build connectivity into their managed services, including commercial models, pricing and margin considerations, billing, provider requirements and common mistakes to avoid when getting started.

Why IoT connectivity fits the managed services model

Connectivity fits naturally alongside the services MSPs already provide. It is ongoing, operational and tied to technology your team may already deploy and support.

The revenue recurs. Connectivity is needed for as long as the device remains deployed. Cameras, payment terminals, environmental sensors, backup routers and other connected devices can remain in service for years, giving MSPs an opportunity to build ongoing connectivity and management revenue around each deployment.

The operations are familiar. You already deploy equipment, monitor services and respond when something goes offline. Managing cellular connectivity through a platform or API, with usage monitoring and alerts, extends that work rather than creating an entirely new discipline.

You maintain visibility into the service. When clients source connectivity separately, your team may have limited insight into the cellular connection when troubleshooting a device. Managing the connectivity alongside the deployment gives you another layer of visibility and control.

It supports services clients already need. Cellular failover, POTS line replacement, remote monitoring, cameras, kiosks and other connected infrastructure all require connectivity. Building that connectivity into the service can turn a one-time deployment into an ongoing client relationship.

You do not need to operate a cellular network yourself. Your connectivity provider manages the carrier relationships and underlying network access. Your role is to package the connectivity into the service, deploy it and support the client.

Where MSPs can add managed cellular connectivity

The opportunity is not limited to selling standalone SIMs.

Connectivity can sit behind many of the technologies MSPs already deploy or support, including:

• Cellular failover and backup internet

• POTS line replacement

• Security and surveillance

• Digital signage

• Point of sale and kiosks

• Remote monitoring

• Asset tracking

• Dashcams and telematics

• EV charging infrastructure

• Field equipment

The common thread is a distributed device or location that needs an internet connection.

For an MSP, the question becomes whether the client should source that connection separately or whether connectivity can become part of the service you already provide.

3 ways MSPs can monetize IoT connectivity

There is more than one way to incorporate connectivity into an MSP business. The right model depends on how much control you want over pricing, billing, support and the customer relationship.

1. Refer the client to a connectivity provider

You introduce the client to a provider, and the provider sells connectivity directly to them.

This requires the least operational involvement from your team, but it also gives you less control over the connectivity, pricing and customer experience.

Depending on the provider, the MSP may receive a referral fee or commission.

Best suited for: MSPs that want to help clients source connectivity without taking on billing and support themselves.

2. Resell connectivity

You purchase connectivity at wholesale rates and incorporate your own margin when billing the client.

This gives you more control over pricing and keeps the connectivity relationship closer to your own business. It also means your team needs a process for billing, monitoring and first-line support.

Best suited for: MSPs that want connectivity to become a recurring revenue stream of its own.

3. Bundle connectivity into a managed service

Instead of presenting connectivity as a separate SIM or data plan, include it within a service the client already understands.

For example, a managed cellular failover service could include the router, cellular connectivity, monitoring and support for one monthly price.

A POTS replacement service could similarly combine the hardware, cellular connection and ongoing management.

Best suited for: MSPs that want to sell an outcome rather than connectivity by itself.

For many MSPs, bundling connectivity into an existing managed service can be a practical place to start. It keeps the offer simple for the client while allowing you to learn how connectivity usage, billing and support behave before expanding the service.

How to price managed IoT connectivity

Pricing needs to account for more than the underlying cellular data.

Depending on the service, your costs may include:

• Cellular connectivity

• Hardware

• Installation and configuration

• Monitoring tools

• Ongoing support

• Billing and administration

A simple way to think about the economics is:

Monthly service margin = client price − connectivity cost − hardware recovery − monitoring and support cost

The exact numbers will vary by service and client.

The important part is to account for each cost instead of treating connectivity or support as an afterthought.

Account for hardware

If you purchase hardware upfront and recover that cost through a monthly service fee, decide how long you expect the client relationship to take to repay it.

For example, you may recover the hardware cost over the expected service term or charge a separate setup or installation fee.

The longer the recovery period, the longer your business carries the upfront hardware cost.

Treat support as a real cost

It is easy to calculate the cost of connectivity and hardware while treating support time as free.

That can make a service look significantly more profitable on paper than it is in practice.

Estimate the time your team will spend monitoring, troubleshooting and administering the service, then build an allowance for that work into the price.

After the first few deployments, compare your assumptions with actual support activity and adjust the model if necessary.

Think about scale

As deployments grow, some costs may become more efficient.

Automated alerts, APIs, bulk management and standardized hardware can reduce the amount of manual work required per device or site.

But that only happens when the right processes and tools are in place.

The goal is not simply to add more SIMs. It is to grow the service without requiring operational work to increase at the same rate.

Choose a billing model

How you bill the client determines who carries the risk when cellular usage changes.

Flat monthly fee

Charge one recurring amount for the complete service.

This is straightforward for clients and can work particularly well when connectivity is bundled into a managed service.

The MSP carries more of the usage risk, so monitor actual consumption to make sure the price continues to support your margin.

Management fee plus usage

Charge a recurring fee for managing the service, then bill cellular data based on actual consumption.

This reduces your exposure to unusually high data usage but makes the client's monthly bill less predictable.

Pass-through connectivity plus management

Pass the underlying connectivity costs through to the client and charge a separate fee for managing the service.

This provides transparency but may create more billing and reconciliation work for your team.

There is no single model that works for every MSP. Choose one that fits the way you already bill clients and the predictability of the deployment's cellular usage.

Manage variable cellular usage

Data usage can vary significantly between devices and sites.

A backup router may use almost no cellular data for months and then consume substantially more during an extended internet outage. A camera, kiosk or remote monitoring device may have a more consistent usage pattern.

Understand those differences before setting your client price.

Use usage visibility, limits and alerts to identify unexpected consumption before it becomes a billing surprise.

If you charge a flat monthly rate, review actual usage periodically to make sure your assumptions still reflect how clients are using the service.

Unexpected usage is not always caused by legitimate client activity. Software updates, configuration changes or unexpected device behavior can also increase cellular consumption.

The earlier your team can see that change, the easier it is to protect the margin behind the service.

Structure deployments for billing and support

Connectivity becomes harder to manage when your team cannot quickly identify which SIM belongs to which customer, device or location.

Create a consistent structure from the first deployment.

Use clear naming conventions and organize SIMs by customer, site or use case so your team can quickly identify:

• Who the SIM belongs to

• Where it is deployed

• What device it connects

• How much data it is using

• Which service it supports

That information helps with troubleshooting, usage analysis and client billing.

It also becomes increasingly important as the service grows from a handful of deployments to hundreds.

Choose a connectivity provider that supports your service model

Your connectivity provider sits underneath the service you put in front of your clients. Its pricing, network options, management tools and support can therefore directly affect your margin and workload.

At minimum, evaluate:

• Wholesale pricing

• Contract and minimum commitments

• Multi-network availability

• Usage visibility and controls

• Remote SIM management

• API access

• Fixed IP and private networking options

• Support

For MSPs, flexibility is particularly important. Client deployments change over time, so understand what happens when SIMs are added, paused or removed and whether your provider commitments align with the commitments you make to clients.

Your provider should also make the service easier to manage as it grows rather than creating more manual work for every SIM you add.

For a more detailed evaluation framework, see our MSP checklist for choosing an IoT connectivity provider.

Build automation into the service early

Manual processes may work for your first few deployments.

They become much harder to maintain as the number of clients and devices grows.

Look for opportunities to automate routine connectivity tasks through your provider's platform or API, including:

• SIM activation and management

• Usage monitoring

• Usage limits

• Reporting

• Provisioning workflows

Automation can reduce the amount of staff time required to manage each deployment and make it easier to maintain your margin as the service scales.

It can also help your team standardize the client experience instead of managing every deployment differently.

Common mistakes when launching a managed connectivity service

Most early problems come from a small number of decisions that can be addressed before a larger rollout.

Treating support as free

Support tickets have a cost. Include monitoring and support in your pricing assumptions and compare those assumptions with actual activity after launch.

Skipping coverage testing

A coverage map does not tell you exactly how a device will perform inside a particular client location.

Test representative sites before committing to a larger deployment.

Assuming every device is compatible

Check SIM format, supported cellular technologies, frequency bands and required network settings before deploying.

Ignoring unexpected usage

Unexpected device behavior can drive significantly more data usage than planned.

Use usage visibility, limits and alerts to identify changes before they materially affect your costs.

Signing provider commitments that outlast client commitments

If your connectivity contract continues after the client leaves, the cost becomes yours.

Understand minimum spend, contract length and cancellation terms before building those costs into a client service.

Selling before the support process exists

Decide who monitors the connectivity, who handles the first client call and how an issue gets escalated to your connectivity provider before the first deployment goes live.

Building every deployment differently

Standardize hardware, naming, configuration, testing and documentation where possible.

A repeatable service is easier to support and easier to scale.

Start with a small deployment

You do not need hundreds of devices to find out whether managed connectivity works for your business.

Start with a client or use case where the connectivity requirement is clear.

Use the initial deployment to validate:

• Cellular coverage

• Hardware compatibility

• Real data usage

• Client billing

• Monitoring

• Support workload

• Escalation processes

• Actual margin

Then use what you learn to refine the service before expanding it across more customers.

The objective of the first deployment is not just to prove that the SIM connects. It is to prove that the entire managed service works operationally and commercially.

Build managed connectivity into your services with Simbase

Simbase gives MSPs the connectivity layer to add cellular services across client deployments without negotiating separate carrier agreements.

Manage SIMs and usage from one platform, access multiple cellular networks, automate connectivity management through APIs and use wholesale pricing as deployments grow.

With no long-term connectivity contracts or minimum usage commitments, you can start with a small client deployment and scale as demand grows.

For MSPs that want connectivity to sit behind their own service offering, Simbase Local provides unbranded connectivity across the US and Canada, helping you keep the client relationship centered on your business.

Ready to add connectivity to your managed services?

Talk to an expert from our team about MSP pricing or plan your first client deployment.