Managing a Fragmented Marketplace – How Wireless Operators Can Rise to the M2M Challenge

Machine-to-machine (M2M) is set to become one of the great mobile communications success stories of the next ten years. IT analyst, the Yankee Group, predicts worldwide enterprise cellular M2M connections will increase from 81.8 million in 2011 to almost 217.5 million in 2015. Over the same period, connectivity revenue will rise from $3.1 billion to U.S. $6.7 billion. This will make M2M one of the biggest wireless growth sectors.

The growth in M2M devices using wireless networks presents wireless operators with opportunities to drive revenues but also poses challenges. Existing systems and processes cannot efficiently handle these devices, which are typically low-powered and inexpensive, only sending small amounts of data, and connecting to the network intermittently.

One of the obstacles operators face in doing this is that the target market for M2M is fragmented into a variety of industries.

These include the intelligent buildings and utilities sectors, where the use of mobile networks to connect the associated systems is expected to be widespread because of convenience and ease of deployment. In the case of utilities, regulation and legislation is a key driver in many regions. The significant characteristics of these applications are that the devices and systems concerned only need to connect intermittently via the network, and the revenues available to network operators will be very low per device. This means the operators need to find more efficient ways to manage the connectivity of the devices, as the processes used for current mobile telephones will not scale cost-effectively.

The automotive/vehicle sector is also likely to see dynamic growth.  Momentum is being fuelled by vehicle manufacturers aiming to provide an enhanced service to their customers. Legislation such as eCall, a European Commission initiative which uses M2M technology to bring rapid assistance to motorists involved in collisions, will be another driver.  Here, mobility is clearly important but these devices will also be infrequent transmitters and so the same problems with scaling will exist as in utilities.

The field force and transport/logistics sector is likely to be important too. Mobile connectivity is already imperative in these sectors, which are driven by the need for business efficiency.

All of these industry areas and the many others using M2M devices, have their own business models, devices and connectivity requirements. Any solution, therefore, needs to support a wide array of use cases and applications.

So how can operators find a suitable means of dealing with such a fragmented market? In certain cases, they have already established M2M management and application platforms, together with an ecosystem of partners, resellers and integrators.

To complement these platforms, they need dedicated solutions for intermittent transmitters, capable of acting as a black box to the management platform and hiding the complexity of managing temporary wireless access while giving fine-grained control over connectivity and message delivery.

Such solutions help remove cost overheads by avoiding the permanent allocation of network database capacity and numbers to devices that are intermittent transmitters. Critically, however, given the fragmented nature of the market, they also increase adaptability, supporting a variety of use cases including temporary network access that is device-initiated (push) or network-initiated (pull) and allowing external systems to attach over a second bearer such as GPRS.

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