Delivering IoT connectivity across borders is more than a technical challenge, it’s a regulatory minefield. As global and regional data sovereignty laws expand, communications service providers (CSP) must balance seamless international operations with compliance obligations that differ dramatically from one country to another.
According to the Kaleido Intelligence report, The Connectivity Revolution: What Every IoT Leader Must Prepare For, 59% of IoT CSPs, including MNOs, MVNOs, and MVNEs, identified regulatory compliance as one of their top three business challenges, ranking higher than cost, security, or platform complexity. The stakes are high: failure to comply can result in severe penalties and lost business to more agile competitors.
Global reach requires local compliance
The IoT ecosystem is maturing. CSPs are scaling faster and serving more diverse geographies, but the complexity of local data privacy mandates is also intensifying. As the Kaleido report notes, “The elevated concern over global coverage and local regulatory compliance underlines that IoT projects are maturing in scope…. Traditional challenges surrounding security and connectivity costs and monetisation remain among the leading concerns, but are viewed as less impactful than the need to support global operations in a compliant manner.”
Global frameworks like GDPR (EU), India’s DPDP Act, and Australia’s Privacy Act 1988 are only part of the story. Many countries such as Brazil, Turkey, and the UK have implemented additional national or sector-specific rules, requiring IoT CSPs to handle, store, and route data differently depending on geography. For mobile-first applications like fleet management, connected healthcare, or smart manufacturing, demonstrating compliance at every network layer is fundamental.
Local breakout services: A compliance enabler
One of the most effective strategies to manage these regulatory pressures is the deployment of local breakout services. These are dedicated, secure data routing points strategically located within regulated jurisdictions.
By processing and storing data locally, local breakout servers ensure that sensitive information never crosses restricted borders. Beyond compliance, they deliver performance benefits: lower latency, faster response times, and optimized bandwidth management, all crucial for latency-sensitive IoT applications such as autonomous vehicles or telemedicine.
The Kaleido survey found that 79% of IoT service providers view local or regional breakouts as “very” or “extremely” important for achieving compliant and high-performing IoT connectivity. Only 4% of MNOs and 3% of non-MNOs said they had no plans to deploy such services in the next two years.
Compliance as a competitive advantage
While connectivity management platforms (CMPs) and multi-IMSI or eSIM IoT technologies enable scale and flexibility, their full potential is unlocked only when paired with robust, compliant infrastructure.
The new GSMA SGP.32 specification simplifies the management of global IoT deployments while promoting greater ecosystem participation among MNOs and OEMs. But even with this advancement, CSPs must ensure data localization, real-time visibility, and network transparency to satisfy both performance and legal requirements.
Organizations that integrate compliance-by-design principles into their IoT architecture, leveraging localized packet gateways and regional breakout points, are better positioned to grow sustainably and win customer trust.
Conclusion: Turning regulation into opportunity
In today’s hyperconnected economy, data privacy and compliance are strategic enablers of growth.
As IoT connectivity becomes the backbone of modern industries, regulation-ready networks will distinguish the leaders from the laggards. The future belongs to providers that can deliver global IoT connectivity underpinned by local compliance, offering customers both performance and peace of mind.
By embracing localized network architectures and compliance-first design, IoT service providers can transform regulatory complexity into a competitive advantage, and turn compliance into confidence.
