Carriers in M2M: Opportunities and Challenges (part two)

M2M has opened new avenues of revenue generation for a number of sectors. A number of forecasts have been made on the expected growth of M2M in coming decade. These projections range between 12 billion to 50 billion by 2020. Although this range is pretty wide, it predicts a healthy, rather more than healthy, growth in the M2M marketplace. Based on these numbers it is easy for telecom operators to get excited about the opportunities this market presents to them.

Although these numbers are huge, the reality might be completely different. One of the reasons is because the telecom operator doesn’t always own the end customer. This is particularly due to the way M2M ecosystem has developed. A typical application will consist of five or six stakeholders in the M2M value chain making it highly complex. The big question for the telecom service provider here is about where the service provider sits in this value chain. Traditionally an operator’s role is to provide data connectivity only and this constitutes just a small part in the value chain. Realising the limitation in revenue this brings-in, telecom operators have started employing well-formulated strategies to ensure they either own the end customer or spread across the value chain to capture larger chunk of it. However, this forces the network operators to venture out of their comfort zones and adopt different business model or device long term strategies to sustain and grow in this highly volatile environment.

Strategies adopted by telecom providers in M2M forte can be broadly classified in 7 categories. This eight-part series blog is an attempt to address and evaluate each of these strategies. The first part of this series (Introduction) can be found here: ( )

Strategy 1: Establishing M2M competence centers or Digital divisions

Many of the biggest telecom carriers across the globe have taken steps to provide some kind of autonomy for M2M team in order to provide required agility for faster decision making and improved time-to-market.

Companies such as Etisalat Group and Telefónica have set-up separate divisions to cater to not just M2M technology but also other related digital products such as mHealth, Connected Car, Mobile Wallet and many more.

A separate division expedites the development of an overall M2M proposition and also facilitates the exchange of best practices and application specific knowledge between local operating units.

Other companies such as Telenor and Telekom Austria have formed a separate organization specially dedicated to development of M2M.  A separate company provides autonomy to be creative and facilitates agility to develop new products and services and thereby maintain a competitive edge.

For more information see:

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Analysis of telecom and ICT infrastructure, technologies, and applications.
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