COMPETITIVE ANALYSIS OF GLOBAL M2M OPERATORS:
Who is best positioned? The M2M market is finally taking off as a growth market; the entire eco-system from module manufacturers and device OEMs, to application software providers, to service delivery and application platform providers, to systems integrators and operators, is excited by an anticipated revenue upsurge in this market. Here, Kathryn Weldon of Current Analysis assesses which service providers are best positioned to succeed in M2M. Forecasts for the numbers of connections vary widely, ranging from 1 billion to 50 billion by 2020. In addition, M2M encompasses a number of different network technologies. While there are theoretically 7 trillion machines on the planet ripe for connectivity, today there are only approximately 100 million worldwide cellular M2M connections. This article is based on recent research titled, “M2M Service Provider Analysis: Who is Best Positioned?” written by Kathryn Weldon (above), Principal Analyst for Enterprise Mobility at Current Analysis, published in June, 2011.
Even though 30-35% CAGRs* for the numbers of connections over the next five years are predicted, revenues and margins are less predictable; these depend on user bandwidth requirements, requisite services and component pricing scenarios, and the requirement for revenue share among all of the vendors within the complex delivery eco-system. Even with these wide-ranging predictions and questions about profit margins, it is clear that this market is poised for significant growth over the next several years. No segment of M2M providers is more excited about the market potential than the operators. Most large global operators have invested in dedicated business units, development of (or licenses for) service delivery platforms to streamline provisioning and management, and extensive marketing, partnership development and ‘innovation centres’ to incubate custom solutions across diverse business verticals. Current Analysis recently completed profiles of leading global wireless operators’ M2M Services and Strategies (see graphic on page 19). This article summarises Current Analysis’ recently updated profiles on the M2M services and strategies of these global wireless operators, detailing our rationale for the ranking of their respective solutions.
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M2M Now July - September 2011
Increasing revenues Service providers are carving out a market share for M2M services, which represent a growing opportunity to increase data services revenue while taking advantage of the current generation of M2M applications’ lower bandwidth requirements. Operators are looking to these service revenues as a source of high volume (if relatively low ARPU), low churn services to provide growth at a time when voice revenues are relatively flat and other data services are eating more heavily into scarce bandwidth and spectrum resources. In the near future, M2M requirements will go beyond in-country or regional low speed/occasional usage scenarios to higher bandwidth, global solutions that need real-time, always-connected mobile network access for applications such as video conferencing and real-time diagnostics for telemedicine, smart grid load and capacity management applications, and in-car internet and entertainment services (see automotive feature in this issue, Ed.). Revenues and differentiation will also come from value-added services beyond connectivity such as end-to-end solutions integration within key verticals, and managed services. While the operators profiled have many things in common in their approach to M2M, there is already evidence that there