M2M service providers: How they stack up in 2012 — new report
Washington, DC, USA / Paris, France. April 24, 2012 — M2M continues as a bright spot in wireless operators’ service growth forecasts. As the Internet of Things takes off, a new report from Current Analysis provides a competitive snapshot of the global network operators and compares their M2M capabilities.
Mobile operators have been aggressively courting M2M customers since 2009, when the majority of Tier 1 US and global operators set up separate business units to go after an opportunity that promised (and still promises) significant revenue growth. According to the report’s author, Kathryn Weldon, a large portion of revenue will likely be in managed and professional services, data analytics, and application management, however, rather than simply from connecting devices.
In the report entitled, M2M Service Providers: How They Stack Up in 2012, Weldon says, “This growth will be welcome at a time when it has become clear that we are reaching a saturation point in cellular voice penetration and a plateau in revenue growth. Even the surge in data revenue from the iPhone effect and the rise of mobile broadband is not going to be enough to cover the huge expenses in network infrastructure upgrades required to accommodate the demand in mobile services.”
“Today it appears to be ‘common knowledge’ that by 2020 there will be billions of connected devices, using both fixed and wireless connections in cars, homes, and businesses, for devices and applications that range from daily sensor data feeds, to automated appliances and industrial machines, to HD streaming video for real-time surveillance and in-car infotainment,” says Weldon. “There seems to be little argument (well maybe a little, as some say 20 billion and others say 50 billion M2M connections) about the size of this opportunity.”
If there is anything still to be argued, she continues, it is whether or not mobile operators can generate high revenues along the way. It is also widely accepted that if operators only provide connectivity for machines, the low ARPU may not be worth it; the ‘big money’ will come from value-added services, including service management for provisioning and managing SIMs, data analytics, advisory and professional services, and managed devices and applications ‘as a service’. How far have operators gone as they ascend this value chain?
In this report, Current Analysis takes its annual look at the M2M services of the major mobile operators, compares them, and ranks them according to their basic services, value-added services, innovation, and traction, i.e. the ability to execute their vision.
The graphic shown above gives Current Analysis’s rankings for these service providers when it comes to developing and executing on M2M services and solutions.
The report summarises Current Analysis’ recently updated profiles on the M2M services and strategies of these global wireless operators, detailing its rationale for the ranking of their respective solutions. Value-added services may represent the ‘real’ revenue opportunity for M2M (estimated at 75% of the total opportunity by 2020), so our rankings focus on the services that operators are adding to their basic connectivity options.
“Even if some operators have larger footprints, especially good roaming relationships, and aggressive pricing strategies, it is inevitable that M2M connectivity is commoditising. This year, in discussions with the US and global operators, it was clear that they were progressing in their goals to differentiate themselves through managed and professional services, vertical solutions and innovative positioning. Operators with both fixed and wireless assets are also doing more to align them in offering holistic solutions to large domestic enterprises and MNCs,” Weldon concludes.