Reading, UK. April 4, 2013 – Machina Research today announced the results of its annual M2M Communications Service Provider Benchmarking Study. For the second year running, Vodafone was crowned the CSP best placed to take advantage of the global M2M opportunity.
The study compared major M2M CSPs in six key areas that will determine their future success: pedigree, platform, place, partnerships, process and people. Based on ratings across each of these six ‘P’s, Machina Research has identified a clear top tier of four CSPs that are establishing themselves as global leaders: AT&T, Deutsche Telekom, Telefonica and Vodafone.
Commenting on the result, the study’s author Matt Hatton said: “Vodafone has been very active this year with lots of exciting new M2M developments and thoroughly deserves to retain the top spot. The company has focused on adding value through a diverse set of product offerings and pursuing new approaches to reduce the cost and complexity of M2M offers. Furthermore, Vodafone is structurally better placed to address M2M, courtesy of its C&W Worldwide acquisition and an elevated position for M2M within the new Vodafone Enterprise Division”.
Hatton continued: “While Vodafone has taken top spot, it is closely pursued by three CSPs that have all had a good year in M2M in one way or another, particularly in initiatives that allow for better support of global client demands. We believe Deutsche Telekom has resolved its strategic approach to the US market, which was the key question mark in 2012, and has also done much work to build a global alliance in the form of the Global M2M Association (GMA). AT&T has also strengthened its global credentials through its network of operator relationships, as has Telefonica through its leadership of the (still officially un-named) global alliance of operators. These globalisation moves are far from the only reason why we scored these three CSPs highly, but they are significant”.
As well as the emergence of a top tier of four global operators, the other notable trend is that other CSPs will need to adopt an appropriate strategy to compete with these players’ scale. In the study, this is characterised as: go vertical, go local, or go home.
Matt Hatton elaborates: “There is only room for a handful of broad-based global M2M CSPs. CSPs that cannot achieve scale will best address M2M by providing either highly specialised expertise in particular areas (e.g. Orange in the healthcare sector), or by focusing on their local territories where they have specific differentiators, such as enterprise sales force or field force, and/or can provide a high degree of customisation of solutions. In many cases these, rather than the global CSPs, will be the best choice for a procurer of M2M services, so all is not lost for those outside the top tier.”
Machina Research is a UK-based telecoms research and consulting firm focusing principally on the emerging opportunity associated with new forms of connected wireless device, specifically M2M.
The M2M Communications Service Provider Benchmarking Report, 2013 gives Machina Research’s view on the likely long-term success of Communication Service Providers in the M2M market in terms of generating margin from M2M services. The focus is squarely on the expectation for future, rather than historic, success.