KPN Joins M2M Pack in Germany

KPN Telecom NV (NYSE: KPN) has given its German mobile operation, E-Plus Service GmbH & Co. KG , a boost with the acquisition of new capacity and the introduction of machine-to-machine (M2M) services.

E-Plus, Germany's third largest mobile operator, with more than 19.3 million customers and annual revenues of more than €3 billion (US$3.67 billion), doubled its spectrum assets following the completion last week of the country's spectrum auction. (See German Spectrum Auction Ends, Raises €4.4B.)

At the same time, KPN extended its suite of M2M services into the German market. The managed M2M services, facilitated by M2M platform provider Jasper Wireless Inc. , in which KPN is now an investor, will now be provided both by E-Plus in Germany and KPN Group Belgium; the services are already available in the Netherlands.

Operators view M2M as a future revenue-generating opportunity in an increasingly competitive and saturated mobile market, and the advent of higher-speed 3G networks will enable richer services still, such as remote surveillance and other video-based offerings.

In addition, operators are interested in connecting a lot more devices than just mobile phones and laptops, with electronic readers such as the Kindle from Amazon.com Inc. (Nasdaq: AMZN) an example. In the U.S., AT&T Inc. (NYSE: T) is using the Jasper Wireless M2M platform to help it wirelessly enable the Kindle and other electronic devices by setting up a type of MVNO (mobile virtual network operator) relationship with device manufacturers and retailers. KPN and Jasper have already signed up GPS product firm Garmin Ltd. and printer and scanner vendor Konica Minolta for their pan-European managed M2M services. (See AT&T Does M2M.)

E-Plus, though, is playing catchup in the German M2M market as T-Mobile Deutschland GmbH and Vodafone Germany are already working on their offerings. (See T-Mobile, Huawei Team on M2M and AlcaLu, V'fone Do Smart Metering.)

KPN’s new spectrum in Germany will certainly be an added advantage, though, as E-Plus pursues its M2M strategy: The company spent €284 million (US$347 million) on eight blocks of spectrum in the 1.8 GHz, 2 GHz, and 2.6 GHz bands in the spectrum auction.

Yet E-Plus is also regarded as the loser in the auction, as it failed to win any blocks in the “digital dividend” 800MHz frequency band, which attracted the highest bids and which allows greater network reach at a lower cost. The operator is now likely to approach rival operators Telefónica O2 Germany GmbH & Co. OHG , Telekom Deutschland GmbH , and Vodafone Germany, to buy wholesale capacity in that band.

— Anne Morris, freelance editor, special to Light Reading