& cplSiteName &

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        ADD A COMMENT
More Blogs from Heavy Lifting Analyst Notes
Huawei CEO Eric Xu finds inspiration in an unlikely place -- Harley-Davidson's drive to transform itself into a digital enterprise for the 21st century.
The ability to holistically analyze, in real time, any network data impacting customer experience is one reason why big data and analytics (BDA) will become a key network element in the near future.
Operators still fear the 'dumb pipe' label, but they must realize that their unique role in the future marketplace is in providing ultra-broadband connectivity between users and content.
Landmark Heavy Reading report explores the rise of web-scale Internet companies as networking powerhouses, and what it means for network equipment vendors.
The next phase of moving applications to the cloud means looking at platforms that use container technology and are suited to a cloud-native, microservices approach.
Light Reading’s Upskill U is a FREE, interactive, online educational resource that delivers must-have education on themes that relate to the overall business transformation taking place in the communications industry.
NEXT COURSE
Wednesday, October 5, 1:00PM EDT
Gigabit & Smart Cities
Joe Kochan, COO & Co-Founder, US Ignite
UPCOMING COURSE SCHEDULE
Friday, October 7, 1:00PM EDT
Gigabit & DOCSIS 3.1
Ty Pearman, Director, Access Architecture, Comcast
Wednesday, October 19, 1:00PM EDT
Securing a Virtual World
Rita Marty, Executive Director, Mobility and Cloud Security, Chief Security Office, AT&T
Friday, October 21, 1:00PM EDT
Security: Evolving the Data Center
Rasool Kareem Irfan, Head, Telecom & Infrastructure Security Practice, Tata Communications Transformation Services Ltd (TCTS)
in association with:
From The Founder
Light Reading today starts a new voyage as part of a larger Enterprise.
Flash Poll
Live Streaming Video
Charting the CSP's Future
Six different communications service providers join to debate their visions of the future CSP, following a landmark presentation from AT&T on its massive virtualization efforts and a look back on where the telecom industry has been and where it's going from two industry veterans.
LRTV Documentaries
From Philly, With Love

9|30|16   |     |   (5) comments


Join Alan Breznick, cable's answer to the Italian Stallion, as he runs through the highlights of SCTE Cable-Tec Expo, lumbers along in Rocky Balboa's footsteps and searches for the perfect Philadelphia cheesesteak.
LRTV Interviews
CenturyLink: SD-WAN Customers Looking for Value Not Cost Savings

9|30|16   |   5:31   |   (0) comments


At NFV & Carrier SDN in Denver, CenturyLink's Eric Nowak told Light Reading that when customers launch SD-WAN, they aren't necessary looking to save money, but instead they are looking for more value from what they're spending. He also shared some unique case studies and lessons learned from launching SD-WAN services.
LRTV Custom TV
Flexible Deployment Approaches for the Gigabit Services Evolution

9|29|16   |     |   (0) comments


For many operators, the gigabit evolution begins with the shift from DOCSIS 3.0 to DOCSIS 3.1. But that move represents a change not only in the protocol itself, but in the approach to architecting their entire DOCSIS delivery chain -- from the headend to the outside plant and home gateway components.

Jonathan Ruff, senior director of global technical ...

LRTV Interviews
Level 3 VP: Enterprises Need More for Less

9|29|16   |   05:27   |   (0) comments


Andrew Dugan, Level 3 group vice president of global technology and IT, says enterprises need more bandwidth and they need it faster and with greater security, but they want to spend less, if possible. They are looking to carriers to reduce their network complexity and help protect them from cyberattacks as well.
LRTV Interviews
CenturyLink: SDN/NFV Pose New Interconnection Possibilities

9|28|16   |   04:37   |   (0) comments


Network operators should develop new APIs and business processes for reselling virtual assets to each other, says CenturyLink's Bill Walker. That will enable them to build digital business portfolios that help them avoid becoming commodity transport providers.
LRTV Interviews
Level 3: Overcoming Terror of Being Supplier, Integrator & Developer

9|28|16   |     |   (0) comments


At Light Reading's NFV & Carrier SDN event in Denver, Travis Ewert of Level 3 Communications said there is terror in becoming supplier, integrator and developer, but it can be overcome and be cost effective.
LRTV Custom TV
Introducing IoT World News

9|27|16   |   01:43   |   (0) comments


Self-driving cars, medical sensors, smart cities... and refrigerators. In order to address the huge scope of IoT, KNect365 has created a unique online community that will help businesses to understand and monetize the opportunities that live within the IoT market. We look forward to welcoming you to IoT World News -- your gateway to a better connected future.
LRTV Interviews
AT&T: Reusable Functions Next NFV Key

9|27|16   |   06:03   |   (0) comments


The next generation of NFV has to break functions down into reusable software chunks, making everything much more cloud-like.
LRTV Interviews
Masergy on Security: Attackers Gaining Upper Hand

9|27|16   |   5:10   |   (2) comments


At Light Reading's NFV & Carrier SDN event in Denver, Ray Watson, vice president of Global Technology at Masergy, says that because of the growth in virtualization, the threat landscape is shifting in favor of the attackers. As a result, service providers need to think beyond just defending the perimeter and take a more holistic approach to security.
LRTV Interviews
Verizon Takes Next Step on Biz Virtualization Journey

9|26|16   |   4:38   |   (2) comments


At September's NFV & Carrier SDN event in Denver, Light Reading sat down with Victoria Lonker, director of Product and New Business Innovation at Verizon, to chat about where the carrier is with delivering virtualized services to business customers.
LRTV Interviews
Global Services: The $40B Face-Off

9|26|16   |   05:53   |   (1) comment


More service providers than ever before are battling it out to win a slice of what is now a $40 billion global communications services pie, explains Ovum Principal Analyst David Molony.
LRTV Documentaries
MEC Congress: The Key Takeaways

9|22|16   |   03:25   |   (3) comments


Three key takeaways from the Mobile Edge Computing (MEC) Congress in Munich, Germany.
Upcoming Live Events
November 3, 2016, The Montcalm Marble Arch, London
November 30, 2016, The Westin Times Square, New York City
December 1, 2016, The Westin Times Square, New York, NY
December 6-8, 2016, The Westin Excelsior, Rome
May 16-17, 2017, Austin Convention Center, Austin, TX
All Upcoming Live Events
Infographics
Hot Topics
AT&T CEO Backs Black Lives Matter
Dan Jones, Mobile Editor, 9/30/2016
Eurobites: Telefónica Taps Juniper for Network Security
Paul Rainford, Assistant Editor, Europe, 9/26/2016
Powell Kills the Cable Show
Mari Silbey, Senior Editor, Cable/Video, 9/29/2016
Telstra Sees Quadrupled Data Capacity by 2020
Carol Wilson, Editor-at-large, 9/28/2016
From Philly, With Love
Alan Breznick, Cable/Video Practice Leader, Light Reading, 9/30/2016
Like Us on Facebook
Twitter Feed
BETWEEN THE CEOs - Executive Interviews
Light Reading CEO Steve Saunders and UXP Systems CEO Gemini Waghmare discuss the strategic importance of digital identity for operators in the midst of transformation.
Join us for an in-depth interview between Steve Saunders of Light Reading and Alexis Black Bjorlin of Intel as they discuss the release of the company's Silicon Photonics platform, its performance, long-term prospects, customer expectations and much more.
Animals with Phones
There's Nothing Like Missing a Full Minute of Pokémon Go Click Here
Live Digital Audio

A vital part of increasing the number of women in comms is transforming the ways companies can support and empower women. While progressive company policies that support both men and women in achieving work-life balance are a step in the right direction, creating a company culture that supports those policies can at times be more challenging.

During this show, we'll talk to Lynn Comp, Senior Director of Industry and Sales Enabling (ISE) in the Network Platforms Group at Intel, about why those challenges exist and how companies can overcome them. She'll provide insight into how Intel has worked to create a culture that supports work-life balance, and provide steps and guidance for other companies wishing to do the same. We will also leave plenty of time to get your questions answered live on the air.