Rise of the machines (again)

John C. Tanner
03 Sep 2009

The concept and practice of using cellular networks to connect machines - from remote sensors and cars to vending machines sending out refill orders by SMS - has been around since at least the late 1990s. The premise sounded like a no-brainer as cellular operators moved towards the data-centric world of 3G and sought out new revenue opportunities that would help make up for the inevitable decline in voice revenues.

Obviously, it never quite worked out that way. While a number of cellcos today do offer M2M services in some form or fashion, it's still very much a niche app, and a costly, low-margin one at that.

However, in the past year cellular M2M has been experiencing a Renaissance of hype as cellcos start revisiting the idea. This time last year, KORE Telematics, Wireless Maingate, Mach Communications and Vianet pulled together to form the M2M Global Alliance "to help global M2M application providers more quickly and cost effectively expand their services overseas" via overriding protocols and interoperability mechanisms to unify disparate networks regardless of underlying technology or carrier.

A few months after that, the GSM Association started a new initiative focusing on embedded modules to establish guidelines for M2M deployments on GSM networks and a certification process for devices and apps, claiming that 50 billion devices will be cellular-enabled by 2025. This year, the GSMA followed that up with a competition to stimulate M2M apps and solutions development.

Indeed, 2009 has seen a number of high-profile moves in the cellular M2M space. In May, AT&T teamed up with global M2M player Jasper Wireless to push its M2M strategy. In July, Vodafone launched a global M2M platform, and added a green-tech spin by publishing a study with Accenture showing how M2M could help reduce carbon emissions (see sidebar, "How M2M could save the planet", p. 15). The same month, Verizon Wireless and Qualcomm - a long-time player in the M2M space - formed a joint venture dedicated to building cellular M2M solutions. Meanwhile, Berg Insight forecasts almost 9 billion euros of M2M revenue by 2012.

What's going on? Experts chalk much of the revived interest and activity to a confluence of various factors, not least of which is the push towards broadband systems like LTE and, to a lesser extent, Wimax (although Wimax identified M2M early on as a potential differentiator - KDDI listed M2M as a potential service for its Wimax offshoot, UQ Communications, as early as February 2008), which promise the most M2M-friendly incarnation of cellular yet.

However, like everything else in the wireless business, where there's unbridled enthusiasm, there's also eyebrow-furrowed skepticism. Even M2M specialists are warning that while there's plenty of reason to be optimistic about cellular M2M in the long term, the short-term picture could be a case of carriers getting in over their heads as they try to tackle a potentially labyrinthine nightmare of device management in exchange for low ARPUs.


No Comments Yet! Be the first to share what you think!
This website uses cookies
This provides customers with a personalized experience and increases the efficiency of visiting the site, allowing us to provide the most efficient service. By using the website and accepting the terms of the policy, you consent to the use of cookies in accordance with the terms of this policy.