Wireless operators have seen the opportunity in machine-to-machine communications and are no longer content leaving it to the mobile virtual network operators (MVNO) to reap the rewards.

M2M MVNOs, carriers' sometimes customers, sometimes competitors, have been working in the M2M space on often less-glamorous applications like vehicle tracking for years. But, in the past year and a half, the carriers have expressed a "sudden and profound" interest in the burgeoning market, says KORE Wireless Group Inc. president Alex Brisbourne. (See AT&T & Kore Telematics Team.)

That's a good thing in that it demonstrates that M2M is not just a niche industry and forces innovation around rate plans, he says, but it also makes doing business a little tricky.

Many operators are already teaming up with M2M platform providers like Kore-customer Axeda Corp. to serve enterprise markets on large scales. Sprint Corp. (NYSE: S) recently inked a deal with Axeda to integrate its app platform into Sprint's CDMA network, while both AT&T Inc. (NYSE: T)'s Connected Device M2M initiative and KPN Mobile 's M2M initiatives are actually powered by former MVNO Jasper Wireless Inc. (See AT&T Does M2M.)

In general, carriers are only starting to learn what a real industrial-strength M2M service actually has to look like, Brisbourne says. They're experts at building one-to-one relationships with subscribers paying $60 per month, but they've got a lot to learn about running a 24/7 network that's reliable and easily troubleshot. That's where the independent providers come in, he says.

"They have to learn those disciplines," Brisbourne says. "They'll learn in some areas and they'll partner with us in others."

Operating as an MVNO, Kore resells wireless service on both GSM and CDMA networks. With the help of more than 400 roaming partners, its GSM network covers more than 93 percent of the US, Canada, and the Caribbean.

As it stands today, Brisbourne says the wireless operators are more focused on the consumer market, while Kore and companies like it are tackling the enterprise. Wireless operators may suggest that if it's a small deployment, they'll leave it to an MVNO, and if it's a large one, take it on themselves, but he says this isn't accurate.

Kore competes for carrier customers or actually teams up to work with a carrier behind the scenes when services become much more critical in terms of expectations for reliability and service support.

"We do more of our business where the M2M app is more than just simply using vanilla capability and people require a platform and services and need more than one network," Brisbourne says. "With all our networks being served from our platform, whether it's Verizon Wireless CDMA, AT&T GSM or Rogers Communications Inc. (Toronto: RCI) GSM, or an international network from an international carrier partner, we are a single-point-of-service delivery."

Brisbourne doesn't see this friend/foe paradox with the wireless operators as a problem either. As a small but growing market, there is no shortage of opportunities for all the players, he says. In terms of what markets are seeing traction for Kore now, it's the smart grid, although it is evolving slowly as utilities figure out how to get stimulus money, payment processing, security, and healthcare. In 2009, more than 20 percent of Kore's net adds came out of health-related apps, he says. In 2008, that number was under 1 percent.

"We continue to see strong growth in segments of telehealth dealing with preventative management -- wellness monitoring, diabetes control, sleep apnea -- areas where there's a proven and understandable value proposition," Brisbourne says. "We're doing quite a lot of work around areas in the federal arena, raising awareness and looking at projects underway."

— Sarah Reedy, Senior Reporter, Light Reading Mobile