Taking a Strategic View of M2M

The voice services market is largely a zero-sum game, where churn rate is high and getting new customers essentially means luring them to switch carriers. Thus, revenues are flattening and cell phone market is saturated as far as people are concerned. The western markets are saturated, and the emerging markets are costly and competitive to enter and sustain. Furthermore, each country has regulators who monitor bandwidth spectrum thus making it more complex and expensive to serve these countries. Carriers recognize the erosion of traditional voice revenues and hence are exploring the M2M space which is slated to grow massively in coming decade and the eventual market size will be far bigger than current telecom market.

Legal and regulatory requirement will also aid in development of M2M market space. These factors promise definite revenue for the service providers. For example, the European eCall initiative is to equip vehicles with M2M devices to enable automatic calls in case of accidents will, once in place, drive adoption of stolen vehicle tracking services using the same technology. Smart metering is another regulation that governments across the world want to implement. If these suggestions are mandated by Governments, 40% to 50% growth rates in M2M would be contributed by regulatory requirements.

Telecom carriers have two choices to make; provide just the connectivity for M2M devices and continue being a silent player in the value chain. This is exactly the case with data and content delivery where carriers have been reduced to dumb delivery pipe or provider of last mile facilities. The other option is to spread their service offerings across M2M value chain to grasp larger portion of the pie.

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About Mind Commerce

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