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Frost & Sullivan's View on the Battle for M2M Revenue - Telcos Redrawing Revenue Boundaries - Market leaders need ICT convergence capabilities
Frost & Sullivan's View on the Battle for M2M Revenue - Telcos Redrawing Revenue Boundaries

 

NewswireToday - /newswire/ - London, United Kingdom, 2012/10/11 - Market leaders need ICT convergence capabilities.

   
 
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Tier 1 machine-to -machine (M2M) telecom service providers in Europe are seeking ways to counter the inevitable commoditisation of M2M connectivity. This becomes more critical with the entry of new service providers that are mainly focussed on wholesale M2M capacity. While connectivity is critical for M2M adoption, the challenge for M2M telcos is to provide both connectivity and intelligence to improve customers' productivity.

Frost & Sullivan Senior Industry Analyst, Yiru Zhong, explains: "the key to revenue in M2M space is in the intelligence component of the M2M equation. Because intelligence has different meanings and value to different customers, Frost & Sullivan expects an M2M telco market leader to emerge by tailoring a menu of M2M intelligence for a broad spectrum of customers-including small and medium-sized enterprises (SME)-and by offering both communication and computing capabilities to simplify customers' M2M adoption processes."

As new market entrants appear and average M2M revenue per connection plunges further, telcos would do well to develop alternative - and perhaps indirect - revenue sources. Deutsche Telecom's (DT) M2M Marketplace approach is unique in that it actively promotes a technology- and user-agnostic trading market to bring buyers and sellers together, indirectly allowing itself to serve a full spectrum of customers. More importantly, DT also targets the revenue from M2M facilitation.

DT's M2M Marketplace adds to its M2M proposition by developing a virtual market in which sellers of M2M devices, products, technology, and services meet buyers of ICT solutions to achieve such business outcomes as improved productivity, reduce downtime or increasing stock availability. DT aims to simplify vendors' application development and buyers' search and selection processes, and to capture a fraction of M2M revenue through this facilitation.

"DT's M2M Marketplace mirrors the Amazon model by serving hard-to-reach customers. A wide range of buyers and sellers can trade on DT's Marketplace - where DT provides the necessary back-office and infrastructure to ensure that sellers' products, technologies, solutions, and services work in buyers' environments," explains Yiru Zhong.

DT is not the only company developing a M2M connectivity platform. There are enough different strengths and focus areas to suggest a vibrant M2M market in the next few years. Other telcos, like Telefonica/O2, Orange Business Services, or Vodafone Global Enterprises, are also working on their M2M strategies.

"The battle for M2M revenue is not fought only in pure M2M connections and communications services; it is increasingly fought at the M2M data level, which is still in its infancy," notes Yiru Zhong. For example, many issues remain unresolved in a straightforward M2M smart meter data deployment. IT expertise is needed to help electricity distribution or retail companies to optimise the deployment of smart meters and integrate meter data from homes to substations, and eventually into energy companies' back offices.

"Many M2M telcos in Europe have an IT component, but only a few have clear and consistent capabilities that match their mobile footprint," summarises Yiru Zhong." The first measure of success was winning major car original equipment manufacturer (OEM) contracts and smart meter projects. The challenge is to convert these relationships into more than M2M connectivity contracts."

If you would like to learn more about M2M market, please contact Joanna Lewandowska, Corporate Communications, at Joanna.lewandowska[.]frost.com. Please include your full contact details in the query.

About Frost & Sullivan
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Frost & Sullivan's View on the Battle for M2M Revenue - Telcos Redrawing Revenue Boundaries

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