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The M2M Opportunity is Knocking

The M2M Opportunity is Knocking

Posted by Mohammed ShaApril 20, 2011

There is a growing consensus among industry observers that M2M is poised to be a major growth area for telecom companies over the next five years. Spurred by recent advancements in mobile technology, supply-chain maturity and the need to offset declining consumer retail revenues, many tier one mobile operators have already begun to crank up their investment in this market.

M2M isn’t new – some companies have been employing a form of M2M for more than a decade – but recently new and innovative ways to leverage the technology have been taking shape in a number of vertical sectors. Convergys has seen the utilities industry drawing on M2M for their smart grid technology and meter reading, and applications have already been identified within the automobile, healthcare, security, retail, and finance industries, to name a few.

Skeptics question whether the extremely low value of each transaction renders M2M worthwhile for operators, but the sheer volume of transactions that M2M promises – hundreds of millions, potentially billions, monthly – more than compensates.

An operator’s best strategy is to treat M2M as a separate function with a dedicated BSS and billing infrastructure tailored to the precise needs of the unique business model. An ultra-low ARPU business, such as M2M, requires a low cost model, so it is essential to have an IT infrastructure that makes optimum use of automated processes, thereby reducing the need for costly headcount to operate the business. By selecting platforms that combine low ongoing cost of ownership, coupled with a highly flexible and scalable set of functions, M2M should be a viable and self-sustaining business.

The M2M opportunity is knocking and hesitation may prove costly. M2M contracts are likely to be much longer term than typical retail telecoms contracts because they will be tied to a product’s lifecycle, so the cost of delaying market entry could miss out on long term revenue opportunities. But for those bold companies that take the necessary steps to appropriately position themselves in the market, opportunity awaits.

To find out more about leveraging M2M technology, check this out – Point of View Paper: “M2M: The next big mobile opportunity”

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Mohammed Sha

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