Will Cellular Carriers Commit to M2M? Suggests Some Strategies Cellular Machine to Machine (M2M) Networks

ABI Research: Global. Machine-to-Machine (M2M) communications occupy a special place in the cellular market. Machines that could use intelligent peer-based communication are said to outnumber the world's human cellular-user population by orders of magnitude.Yet financial markets judge cellular carriers by revenue per user. A typical monthly revenue for a mobile phone service subscriber might be US$50 or more; the equivalent M2M charge might be only $10. How can carriers present a business case to the markets? One strategy is this: Own a gateway. In the UK, , a France Telecom company, has built its foundation by owning both a gateway and the complementary secure connection to manage customers' transmissions. By combining the gateway, bandwidth, and commercially branded services, Orange can offer ‘The Orange M2M solution. A second strategy available to carriers is to sell raw bandwidth to MVNOs. The M2M business structure represents a business opportunity for mobile operators and Mobile Virtual Network Operators to cooperate. By securing preferred pricing for pooled data transport from mobile operators, M2M MVNOs can help businesses reduce complexities, lower the costs of managing extensive M2M data networks and improve efficiencies for these businesses. This creates a win-win-win for businesses, mobile operators, and MVNOs.

What will be the food-chain consequences if carriers adopt either of these approaches? If more carriers opt for an Orange-style model, the world will change for developers. You won't see many ‘mom-and-pop' developers counting a Verizon or a Sprint or AT&T among their customers. But if carriers are shy of those big-company commitments, that will leave more room for MVNO aggregators, creating niche development opportunities that complement larger M2M business. Cellular Machine to Machine (M2M) Networks Publ 20051201. Publ in Cellular News . wless