Return to M2M opportunity with vigour

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Dubai, 26^th July 2010. Ovum's newly published research on "Operator Strategies in machine-to-machine (M2M) communications" reveals that M2M communications is once again a hot topic for mobile network operators, who have returned to this application area with refreshed strategies and increased appetites.  

"The increased interest in M2M has two origins: first, many operators are positioning themselves to provide infrastructure, connectivity, and service as enterprises seek to connect their major assets to their networks. M2M in a B2B environment is all about asset optimisation and process efficiency", noted Evan Kirchheimer, leader of Ovum's Enterprise Telecoms practice. A classic example is smart metering, which has been sparked in part by regulation. But we also see opportunities in vending/point-of-sale and logistics.  

"Second, and potentially an order of magnitude more important, is the network-enablement of an increasing number of consumer devices," added Kirchheimer. Consumer electronics companies expect their products to be always connected, and therefore are increasingly interested in M2M. This raises the possibility of major customer deals, some of which will be global in scale. "The launch of eReaders such as the Kindle has provided a new impetus for M2M", continued Kirchheimer. While not all operators see the value in such a deal, and believe a more telco-advantageous revenue model is needed, they recognize that it is a major opportunity in terms of numbers of connected devices And to top it off new delivery and commercial models are emerging (including the use of a partner, such as Jasper Wireless, for its M2M service delivery platform). Such developments make M2M services simpler for operators to build and faster to launch, as well as less risky for potential customers. 

"Ovum expects almost all of the major global operators to have cemented their strategies by the first half of 2011", continues Kirchheimer. The figure below gives Ovum's view of the current value chain in the M2M market.   The challenge will be for operators with ambition to go beyond simple network provision and add value by working with module and hardware suppliers to ensure all devices are network-ready, and to partner with SIs to map the service to their clients' business requirements. "On the other hand, some operators will choose a wholesale route whereby they provide the connectivity and relevant partner relationships, but devise revenue models centered on volume. The two approaches are not mutually exclusive", concluded Kirchheimer.

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Notes to editor
To arrange an interview or for further details regarding this release please contact Aartee Sundheep on +971 (0)4 408 2832 or aartee.sundheep@ovum.com 

Ovum's definition of M2M
Communication where a remote machine is monitored and/or controlled by a central server. This definition explicitly excludes machines which are directly monitored or controlled via a user interface by a user who is physically co-located with the machine. It therefore excludes any kind of personal device such as a smartphone or connected laptop. 

ABOUT OVUM
Ovum provides clients with independent and objective analysis that enables them to make better business and technology decisions. Our research draws upon over 400,000 interviews a year with business and technology, telecoms and sourcing decision-makers, giving Ovum and our clients unparalleled insight not only into business requirements but also the technology that organisations must support. Ovum is part of the Datamonitor group

© Press Release 2010