Light Reading

Riding the M2M Revenue Wave

Heavy Lifting Analyst Notes
Heavy Lifting Analyst Notes
Heavy Lifting Analyst Notes
1/28/2013
50%
50%

In telecom, operators are looking to M2M as a means of alternative revenue in an environment where traditional voice services have reached penetration. But in the scheme of things, service providers will have to move beyond just providing connectivity for M2M and provide value-added services if they want to benefit fully from the M2M "explosion," because the operator that provides the most appealing combination of connectivity, cost savings, value-added offering and comprehensive M2M ecosystem will ultimately be the one to win and retain customers. In Heavy Reading's recent multi-client study on M2M, we surveyed 60-plus unique global operators. Some of the key highlights that came out as part of this survey are: M2M is still in its infancy as part of operators' overall business operations. The majority of operators report that M2M currently makes up less than 5 percent of their company's overall revenue. Thirty-seven percent of global respondents feel that five years from now, M2M services will make up 5 percent to 10 percent of their revenue, followed by 22 percent feeling that it will make up 10 percent to 15 percent. About one third of operators feel they have M2M offerings in all vertical markets. Twenty-one percent to 35 percent of all survey respondents report that they are currently offering M2M services in the vertical markets of automotive/telematics/fleet, manufacturing, energy, security and video surveillance, health care, consumer electronics, connected home and smart building management. Twenty percent to 33 percent of all respondents report they plan to offer M2M services in these vertical markets in 2013. Globally operators feel revenue from M2M will increase over the next five years but not astronomically. Though operators expect an increase over the next five years, none of the operators strongly feel revenue from M2M will be up more than 20 percent five years from now. Operators expect transaction volumes to increase. The majority of respondents from all operator types expect a 10 percent to 20 percent increase in transaction volumes over the next five years. Most operators currently see themselves as a wholesale provider and a connectivity provider in the M2M value chain, but in the future look to partnerships. The majority of global respondents feel their current role in the M2M value chain is as a connectivity provider (85 percent), followed by a wholesale provider (75 percent). Five years from now, the majority of global respondents see themselves as a partner with OTT M2M players (93 percent), followed by a provider of premium pricing plans for M2M traffic (80 percent) and a provider of device management and services capability (77 percent). The B2B M2M business model is currently the most popular, but five years from now most operators look to a multiparty model. Seventy-one percent of global respondents have implemented the B2B M2M business model, followed by B2C (70 percent) and low-cost model (use existing retail infrastructure) (45 percent). In five years, 86 percent of global respondents expect to implement the multiparty model (global connectivity hub) followed by blending own M2M platform with network management (82 percent). Operators look to quality of service as a differentiator. Seventy-five percent of global respondents report they use quality of service to differentiate their M2M offerings followed by customer services (67 percent) and network speed/performance (62 percent). Lack of zero-touch service activation, integrated configuration management and ability to create permanent roaming agreements and tariff plans with selected partners are seen as a serious problem that will inhibit full support of their company's M2M operation. Forty percent of global respondents feel that lack of zero-touch service activation is a serious problem inhibiting full support of their M2M operation, followed by lack of ability to create permanent roaming agreements (37 percent) and lack of integrated configuration management (36 percent). The majority of all operator types plan to support M2M in the cloud. The majority of respondents (63 percent) plan to support M2M in the cloud. The majority of survey respondents feel that concern with data security will be the most major obstacle regarding deployment of M2M services. The majority of respondents feel that concern with data security will the most major obstacle regarding deployment of M2M services in the cloud, followed by the need to transform business processes and unproven ROI. -- Ari Banerjee, Senior Analyst, Heavy Reading

(0)  | 
Comment  | 
Print  | 
Newest First  |  Oldest First  |  Threaded View
More Blogs from Heavy Lifting Analyst Notes
Overlays have been proposed as a way to bring the benefits of virtualization to the telco data center networking domain.
Join our fireside chat at Mobile World Congress in Barcelona as we discuss the operational implications of NFV with Justin Paul, head of OSS marketing at Amdocs.
The race to deliver gigabit broadband services is accelerating, and G.fast is a key technology that telecom service providers can deploy to compete successfully.
If NFV is to progress, proofs of concept and trials need to come out of the lab and into live networks in 2015.
This year is expected to be a year of great market evolution across most telecom sectors, specifically in virtualization and Long Term Evolution (LTE).
Flash Poll
From The Founder
Networks of the future will rely on "white box" switches and servers rather than proprietary hardware and that's going to alter the shape of the communications industry. Who says so? John Chambers.
LRTV Custom TV
The Benefits of HyperScale Clouds for NFV

3|27|15   |   01:50   |   (0) comments


Hyperscale cloud has been developed by the Internet giants to support the creation and delivery of software-based services at blistering speeds, and at the lowest possible cost. The original ETSI NFV vision was to adopt hyperscale cloud architecture and practices. This vision has become somewhat obscured along the way, due to misunderstandings about the hyperscale ...
LRTV Huawei Video Resource Center
eLTE Rapid Meets the Need for Speed

3|26|15   |   4:45   |   (0) comments


Designed especially for emergency and dedicated ad hoc local mobile communications coverage, Huawei's eLTE Rapid solution can deliver trunked voice, video and data coverage for multiple users over a 6km range and be set up in just 15 minutes, explains Huawei's Norman Frisch.
LRTV Huawei Video Resource Center
On Videos: Challenges & Opportunities

3|26|15   |   5:56   |   (0) comments


Most everything is now connected. And along with 4K and 4G technologies, everyone could be creating and broadcasting video contents. Users are expecting better video experience with any screen, anywhere and anytime. Operators will meet new challenges, but also see some big opportunities.
LRTV Custom TV
JDSU: Delivering Dynamic Networks for a Personalized Experience

3|26|15   |   5:59   |   (0) comments


Light Reading speaks to JDSU at Mobile World Congress 2015 about new solutions in the areas of HetNets, VoLTE, backhaul, virtualization, big data analytics, and real-time intelligence.
LRTV Custom TV
Smarter Service Chaining & New Ways to Benefit From Qosmos Technology

3|25|15   |   03:11   |   (0) comments


David Le Goff, director of strategic and product marketing at Qosmos, explains how the company has added application awareness to subscriber information to make service chaining more efficient and reduce costs for networking and infrastructure. In addition, Qosmos technology, which has been delivered as C libraries, is now also available as a virtual machine, ...
Between the CEOs
Qosmos CEO: The Changing Face of DPI

3|24|15   |   13:53   |   (0) comments


LR CEO and Founder Steve Saunders sits down with the head of Qosmos to talk about the changing state of the art in deep packet inspection technology, including its role in SDN and NFV architectures. Also, how the comms market is becoming more like the automotive industry.
LRTV Huawei Video Resource Center
FC Schalke Scores With Its Agile Stadium

3|24|15   |   6:23   |   (0) comments


Top German soccer club FC Schalke 04 has deployed a new, agile WiFi network from Huawei in its Veltins-Arena stadium and is reaping the benefits in terms of customer satisfaction and business opportunities, explains marketing chief Alexander Jobst.
LRTV Huawei Video Resource Center
Huawei’s Insights on Mobile Video

3|24|15   |   7:51   |   (0) comments


More people than ever are now watching videos on smartphones. Seventy percent of mobile traffic will be video traffic until 2018. In this video, Huawei's exports give their insights on mobile video in terms of business model, network planning and 4G network construction.
LRTV Documentaries
The Rise of Industry 4.0

3|24|15   |   02:26   |   (9) comments


Are you ready for the fourth industrial revolution? It's a big deal for influential operators such as Deutsche Telekom.
LRTV Huawei Video Resource Center
Getting Connected With eLTE

3|23|15   |   06:04   |   (0) comments


Trunked radio communications have entered the 4G LTE world, and with Huawei's eLTE solution, can now deliver a full range of data and video services as well as push-to-talk voice, explains Huawei's Norman Frisch.
LRTV Huawei Video Resource Center
Funkwerk’s on Track With Huawei

3|19|15   |   3:23   |   (0) comments


GSM-R technology specialist Funkwerk and Huawei have forged a partnership that is benefiting both parties, notes Funkwerk's Gottfried Winter.
LRTV Documentaries
How EANTC Tested Cisco's Virtualization Solutions

3|18|15   |   5:49   |   (0) comments


Carsten Rossenhövel, managing director of independent test lab EANTC, tells Light Reading founder and CEO Steve Saunders about the innovative approach his team had to take when validating Cisco's service provider virtualization and cloud solutions.
Upcoming Live Events
April 14, 2015, The Westin Times Square, New York City, NY
May 5, 2015, Hyatt McCormick Place, Chicago, IL
May 6, 2015, Georgia World Congress, Atlanta, GA
May 12, 2015, Grand Hyatt, Denver, CO
May 13-14, 2015, The Westin Peachtree, Atlanta, GA
June 8, 2015, Chicago, IL
June 9-10, 2015, Chicago, IL
June 9, 2015, Chicago, IL
June 10, 2015, Chicago, IL
September 29-30, 2015, The Westin Grand Müchen, Munich, Germany
All Upcoming Live Events
Hot Topics
AT&T Woos SMBs With Small-Scale WiFi
Sarah Thomas, Editorial Operations Director, 3/26/2015
Just Don't Say IBM Is 'Relaunching' Networking Business
Mitch Wagner, West Coast Bureau Chief, Light Reading, 3/26/2015
Average US Broadband Speeds No Great Shakes
Mari Silbey, Independent Technology Editor, 3/25/2015
The Rise of Industry 4.0
Ray Le Maistre, Editor-in-chief, 3/24/2015
Google Hires Wall Street's Most Influential Woman as CFO
Dan Jones, Mobile Editor, 3/24/2015
Like Us on Facebook
Twitter Feed
Webinar Archive
BETWEEN THE CEOs - Executive Interviews
LR CEO and Founder Steve Saunders sits down with the head of Qosmos to talk about the changing state of the art in deep packet inspection technology, including its role in SDN and NFV architectures.
Chattanooga’s EPB publicly owned utility comms company has become a poster child for how to enable a local economy using next-gen networking technology. Steve Saunders, Founder of Light Reading, sits down with Harold DePriest, president and CEO of EPB, to learn how EPB is bringing big time tech to small town America.
Cats with Phones
Interspecies Phone Love Click Here
"No, you hang up."
"No, YOU hang up."
Latest Comment