& 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
The Google Fiber honcho's defection to Facebook signals a new phase in the relationship between web-scale Internet companies and communications service providers.
Fixed wireless access is back in fashion as a fast and efficient way to hook up customers in hard-to-reach places.
Virtualization is continuing to grow extraordinarily, and vendors are finding that hypervisors have a chance to shine, offering consolidation, safety and security.
Service providers are making some progress toward virtualizing networks and services -- but (surprise, surprise) the rate of progress isn't as fast as they expected.
As the cable industry is steadily deploying WiFi hotspots and homespots, it is beginning to explore other opportunities that wireless usage can offer.
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, July 27, 1:00PM EDT
The Changing Face of the Data Center World
Rodney M. Elder, Senior Solutions Architect, Equinix
UPCOMING COURSE SCHEDULE
Wednesday, August 3, 1:00PM EDT
The Central Office Re-Architected as a Data Center
Guru Parulkar, Executive Director, Open Networking Research Center, Open Networking Lab
Wednesday, August 10, 1:00PM EDT
Telcos & Open Source 101
Phil Robb, Senior Technical Director, OpenDaylight
Friday, August 12, 1:00PM EDT
The Role of Open Source in NFV
Jim Fagan, Director, Cloud Practice, Telstra
in association with:
From The Founder
In the first episode of a four-part series, Light Reading Founder and CEO Steve Saunders and Calix President and CEO Carl Russo drive around town discussing the disruptive mega-changes in the communications industry and where hope lies for service providers to meet the escalating demands of the cloud.
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 Custom TV
Real-Time Telemetry & Analytics for Intelligent SDN Orchestration

7|25|16   |   03:09   |   (0) comments


Packet Design CEO Scott Sherwood discusses how real-time network telemetry and analytics are enabling a new breed of SDN orchestration applications.
From the Founder
The Russo Report: Driving Disruption

7|25|16   |   07:44   |   (0) comments


In the first episode of a four-part series, Light Reading Founder and CEO Steve Saunders and Calix President and CEO Carl Russo drive around town discussing the disruptive mega-changes in the communications industry and where hope lies for service providers to meet the escalating demands of the cloud.
LRTV Custom TV
NetScout: Maximizing Enterprise Cloud for Digital Transformation

7|20|16   |   04:53   |   (0) comments


Light Reading Editor Mitch Wagner talks to NetScout CMO Jim McNiel about maximizing the benefits of enterprise cloud and digital transformation while minimizing potential pitfalls with a proper monitoring and instrumentation strategy.
Women in Comms Introduction Videos
Ciena's VP Offers a Career Crash Course

7|20|16   |   4:14   |   (0) comments


How did Ciena's Vice President of Sales, Angela Finn, carve out her career path? Simple, she tells WiC. She stayed true to her company, customers and principles. She shares her advice for women on how to be authentic and credible, as well as for companies that want to make a real change to their culture and practices.
LRTV Custom TV
NFV in 2016: Part 2 – Climbing the Virtualization Maturity Curve

7|19|16   |   06:56   |   (0) comments


Many of the initial use case implementations are single-vendor and self-contained. The industry is still climbing the virtualization maturity curve, needing further clarity and stability in the NFV infrastructure (NFVi) and greater availability and choice of virtualized network functions (VNFs). Interoperability between NFVis and VNFs from different vendors ...
Telecom Innovators Video Showcase
Versa Networks' Kumar Mehta on SD-WAN Managed Services

7|19|16   |     |   (0) comments


In Silicon Valley, Steve Saunders sits down with Versa's Kumar Mehta for an interview focused on why service providers are building SD-WAN managed services, and how Versa's telco customers are innovating.
LRTV Custom TV
Juniper Networks & The Evolution of NFV

7|19|16   |   06:01   |   (0) comments


Senior Juniper Networks executives talk to Light Reading Founder & CEO Steve Saunders about NFV developments and the recent independent evaluation by test lab EANTC of Juniper's Cloud CPE solution.
LRTV Interviews
CenturyLink Goes Beyond Managed WiFi

7|19|16   |     |   (0) comments


CenturyLink's managed WiFi allows enterprises, such as retailers and resorts, to track guest WiFi usage in order to help them better communicate with customers.
LRTV Interviews
AT&T Launches Network Functions on Demand

7|17|16   |   05:26   |   (0) comments


Roman Pacewicz, Senior Vice President, Offer Management & Service Integration, AT&T Business Solutions, discusses the operator's launch of its Network Functions on Demand service.
LRTV Interviews
Enterprise Pitch for Ciscosson

7|14|16   |   04:43   |   (0) comments


After seven months of near silence, Cisco and Ericsson executives publicly discussed details on their extensive partnership. Among the tidbits shared by Martin Zander, VP, group strategy programs, Ericsson, and Doug Webster, VP service provider marketing, Cisco: The partnership was initially launched to serve the service provider market, but is already gaining ...
Wagner’s Ring
Cisco Faces Up to Hypercloud Threat

7|13|16   |   02:42   |   (0) comments


Facebook, Amazon and Google mostly don't buy branded technology for their networks – they build their own. That's a threat to Cisco – and its competitors too – which face potentially dwindling demand for their product. Is Cisco up to the challenge? Light Reading went to the annual Cisco Live conference to find out.
LRTV Huawei Video Resource Center
Building a Better Connected Russia

7|13|16   |     |   (0) comments


At UBBS World Tour 2016, Alla Shabelnikova of Ovum shares the findings of a white paper outlining the challenges and opportunities of broadband rollout in Russia.
Upcoming Live Events
September 13-14, 2016, The Curtis Hotel, Denver, CO
September 27, 2016, Philadelphia, PA
November 3, 2016, The Montcalm Marble Arch, London
November 30, 2016, The Westin Times Square, New York City
December 6-8, 2016,
May 16-17, 2017, Austin Convention Center, Austin, TX
All Upcoming Live Events
Infographics
Five of the Top 10 most targeted countries in Check Point Software Technologies' global Malware & Threat Index for Q1 2016 are in Africa.
Hot Topics
Ericsson 'Doubles' Savings Goal as Sales Slump
Iain Morris, News Editor, 7/19/2016
Kevin Lo's Move to Facebook: Sign of Things to Come?
Patrick Donegan, Chief Analyst, Heavy Reading, 7/20/2016
Verizon's Next With VNFs
Carol Wilson, Editor-at-large, 7/21/2016
Facebook Gets Its Drone On
Ray Le Maistre, Editor-in-chief, 7/22/2016
Ericsson Ejects CEO Vestberg
Ray Le Maistre, Editor-in-chief, 7/25/2016
Like Us on Facebook
Twitter Feed
BETWEEN THE CEOs - Executive Interviews
There's no question that, come 2020, 5G technology will turn the world's conception of what mobile networking is on its head. Within the world of 5G development, Dr. ...
I've enjoyed interviewing many interesting people since I rejoined Light Reading, but William A. "Bill" Owens certainly takes the biscuit, as we say where I come from.
Live Digital Audio

Our world has evolved through innovation from the Industrial Revolution of the 1740s to the information age, and it is now entering the Fourth Industrial Revolution, driven by technology. Technology is driving a paradigm shift in the way digital solutions deliver a connected world, changing the way we live, communicate and provide solutions. It can have a powerful impact on how we tackle some of the world’s most pressing problems. In this radio show, Caroline Dowling, President of Communications Infrastructure & Enterprise Computing at Flex, will join Women in Comms Director Sarah Thomas to discuss the impact technology has on society and how it can be a game-changer across the globe; improving lives and creating a smarter world. Dowling, a Cork, Ireland, native and graduate of Harvard Business School's Advanced Management Program, will also discuss her experience managing an international team focused on innovation in an age of high-speed change.