M2M : the Rise of the Machines !

Presentation1

M2M market (connecting devices other than phones, laptops and similar consumer devices is the new gold mine for network operators seeking data revenues. According to the international research firm Gartner, M2M is one of the Top10 mobile technologies to watch. Berg Insight predicts the number of cellular connections used for machine-to-machine communication to grow at a compound annual growth rate (CAGR) of 25.6 percent to reach 187.1 million worldwide by 2014. In the same timeframe, M2M’s share of the global cellular network will rise from today’s 1.4% to reach 3.1%

Telcos must understand that while mobilizing the machine is based on the same cellular network as that used for voice services, in most other respects the offering differs. Characteristics such as time of usage, frequency of usage, file size, and customer base will all be different. Consequently, rate structures, sales channels, service levels, and technical support must all be re-designed with embedded mobile in mind. M2M ( sometimes called Embedded mobile ) is likely to generate a lot of additional data traffic, so it will be an important potential source of revenue and growth. Particularly if some of the data traffic can be steered toward the network’s off-peak periods. Network infrastructure is a sunk cost, and operators have predictable periods when they know the network will be under-utilized. According to Machina the market that is addressable by CSPs is $339 billion but of that only $5 billion will be about connectivity. But connecting it all, and connecting it at a level of service that CSPs need to guarantee must happen as stage one. As with people, CSPs need to choose their opportunities. Low ARPU connectivity may be a model for one CSP, value added services might be the model for another.

Amongst the pressing issues are standards adoption, cloud based service delivery platforms and security. With M2M network operators will probably not own the customer relationship as they do with voice. M2M applications are too complex and specialized for most companies to develop and deliver on their own. Instead, different players will need to collaborate to provide a total solution. For example, creating a building-automation system involved a range of different actors, including the chip and RF-chain vendors, the device assemblers, the operating system vendors, the network operators, and the application developers.Sample M2M applications include but not limited to :

Smart Metering : Smart Metering has become an essential part in the public utility industry. With government regulations and cost increase of nature resources (crude oil, coat, nature gas,etc), public utility companies have to implement an automatic real-time meter reading process to save cost and time. The real-time utilities usage information not only enables providers to allocate resource more efficiently but also allows customers to obtain more accurate billings.

Sales and Payment :Electronic payment system becomes the essential portion of people daily livings. More and More point-of-sale (POS) terminals, nowadays, are embedded cellular wireless modules in order to operate independently anytime and anywhere. Cellular wireless POS terminals can also feedback real-time sale information to vendors for resource allocation and sale & marketing analysis.

Security : The concern of safety is raising sharply. The demand of alarm systems to be installed in private residential, commercial and public locations grows exponentially. Cellular technology is applied to organize the usage of alarm systems according to different desires. Law-enforcement units, emergency organizations and private individuals can react more effectively upon the real-time alerts of various occurrences.

Healthcare: With cellular technology enable device, patients no longer have to be present in physician clinics to obtain medical advise. Physicians now are able to monitor their patients’ condition continuously regardless of the local of the patients. Unnecessary clinical visits can be eliminated. Healthcare system will become more effective and efficient.

Telemetry : Shipments of medicine or food require the observance of certain temperature ranges or a complete documentation of the cold chain. Sensors inside the containers measure parameters such as temperature and humidity and transfer them to a central database using M2M technology.

Telcos are sitting on a gold mine of core capabilities and assets, critical for M2M success. In addition to just network connectivity, they have outstanding expertise in large scale service delivery with high reliability and global reach, plus an arsenal of partners for content, apps, specialized solutions and services, integration, as well as terminal and module vendors.While the price of devices has been steadily decreasing, mobile operators all over the world have been driving growth in the M2M market over the past several years as we can see by rapidly increasing numbers of M2M subscribers and higher revenues.

Telia Telenor is the Telco industry’s poster boy in providing M2M applications based on their of horizontal, multi-tenant platform for M2M .The design of their Telenor Objects’ software platform is a layering concept which provides a middleware layer to help different kinds of devices, networks, and applications to interoperate. This facilitates open interfaces for data capture, data pre-processing, device management, and information exchange with other systems. Telenor Objects is based on five key elements : the brand and channels to market, the technology, the partners, a managed-service business model drawing on the telco heritage, and open-source software.The complete system provides a range of reuseable capabilities, including a GUI for users, developer APIs, and a device library. The system core is a software platform which implements a secure message-exchange and device management system.

Sprint launched its Emerging Solutions Group in 2009. Some of the M2M offers include remote monitoring to keep track of Alzheimer’s patients and providing news and weather updates for digital signage systems. They are also involved in remote monitoring and control of equipment, primarily SCADA units for oil wells and waste water, as well as security, utility meters and appliances. Some of their partners include Grid Net, Landis+Gyr, and Ford Motor Company.Verizon is targeting enterprise clients with wireless ATMs, electronic medical records, RFID-tagged supply chain applications, video surveillance, stolen vehicle tracking, monitoring of water, gas and electric distribution, control electronics, DVD kiosks and vending machines.

Orange is focusing on vehicle tracking and online monitoring and reporting, asset management, wireless CCTV safety cameras, satellite navigation systems, patient medical trials, patients’ diaries, security, asset tracking, dynamic signage, vending machines, stock control, pest control, remote measurement of water and energy usage, automatic meter reading, wireless alarm systems, emergency lighting and wireless closed circuit television apps.

To support businesses in their IoT / M2M strategies, Etisalat has made investments in some of the core components such as multi – access technologies, specific networks, security, control and command center and its state-of the-art platform. It has strengthened its solutions portfolio in various areas ranging from smart city applications such as smart parking, public lighting, waste management, traffic management and smart surveillance systems to industrial IoT solutions such as energy management, asset management, remote monitoring of all types of devices, video analytics, smart retail solutions and big data solutions.Etisalat realises that a state-of-the art open platform is critical to boost innovation in the UAE, enabling start-ups, entrepreneurs and developers to bring their ideas to life much faster and easier. It is enabling the use of unique tools to further develop an innovative digital ecosystem in the UAE.

However, the road ahead is not easy. Continuous success for operators in this space will require transformational strategies along with new value propositions, product innovation and perhaps even some mergers and acquisitions. At the same time, operators need to have good insight into the software and system solutions that are emerging as the fastest growing segment in the M2M industry. Increasingly advanced large-scale M2M applications require advanced service enablement platforms that integrate remote devices, mobile networks and enterprise applications.

The challenges involved in exploiting M2M are significant but the potential benefits are even greater. For enterprises that use M2M embedded mobile, there is the potential for greater efficiency, improved business processes, and innovative new business models. For network operators, mobilizing the machine represents a way to greatly extend the subscriber base and drive up data traffic. For cellular device vendors, machines are a vast new target market. For OEMs, embedding mobile in their products allows differentiation, has the potential to expand their customer base, and could even enable new product lines.

The point is : Machine-to-Machine (M2M) communications is about to radically transform society, industry and the way we live. Managing complex eco-systems is at the core of successfully developing and deploying innovative M2M solutions and business models. Every self respecting Telco must mark their positions in the value chain in which M2M solutions will be seamlessly integrated into the most critical systems of society; for instance in health care where M2M enables new advanced remote treatment, or automation of personal transportation (such as Google’s driverless car concept).

Sadiq Malik ( Telco Strategist )

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