How Can You Monetize M2M?
Posted by Jesse Ward on Wednesday, February 15, 2012 · 
- The Promise of M2M
- Industry Challenges to Full-Scale M2M Deployment
- How Can You Monetize M2M?
“Rural service provides have two main options,” said Steve Pazol, CEO of nPhase. “One, they can provide the transactional connectivity, selling SIM cards and data plans direct to business customers, or negotiating roaming agreements with established M2M vendors. Or they can climb higher in the solution chain, offering a complete M2M solution for various vertical industries.”
Pazol went on to note that it’s probably unrealistic for most rural service providers to develop their own M2M solution. He offered the example of a wireless M2M medical device. In order to create a mobile plug-and-play solution, the developer must create the medical device, design a wireless antenna, embed the radio connectivity into the device, develop the middleware and ensure that it communicates with the backend core network. For many rural telcos this is a complicated and technically challenging process. As a result, instead of developing their own solution, most rural telcos will look to partner with outsourced solutions providers to offer a white-label product. Most likely rural operators first will turn to their infrastructure and consulting providers for this partnership.
“The implication, particularly for a smaller operator, is that you need to pick your vertical markets wisely and define who you will target,” said Harish Viswanathan, CTO advisor for M2M and Devices at Alcatel-Lucent. “Hospitals, government and equipment manufacturers, agriculture and farming applications, utilities—or perhaps your telco will offer a direct-to-consumer home automation solution—I don’t know. For each telco, the ideal customer will probably be regional and operator-specific. “
At the most basic level, rural service providers should expect to see more data traversing their networks and perhaps a renewed interest in negotiating roaming agreements. “Tier-one network operators often provide M2M services to enterprise customers that are international in scope,” Viswanathan said. “For the tier-one network operator, its current national and international roaming agreements are often optimized for smartphones and too expensive for M2M, a new device which only produces a small amount of data. Service providers may need to define new roaming deals, especially for M2M solutions for mobile devices such as asset and fleet tracking.”
The Next-Generation of Devices
For service providers, the rise of M2M marks a fundamental shift in the type of devices they will be selling and servicing, and the quantity of data traversing their networks. As voice minutes and corresponding income continue to decline, operators are looking to create new revenue streams that capitalize on their evolving fiber networks and 3G/4G wireless connectivity.
M2M provides network operators with an opportunity to meet the evolving needs of their customers. In the future, service providers should expect to troubleshoot and manage complex home networks with non-traditional gadgets. As M2M technology matures and applications are tailored to new vertical markets, network operators may find themselves serving new industries.
With M2M, we are not just talking about the next-generation of devices; it’s the next-generation of the Internet, where the value to the end user will be derived from the truly interconnected nature of the “Internet of things.” M2M devices will feed real-time information into the network to automate processes, create efficiencies, reduce costs, analyze real-time data, and introduce new and valuable services.
Related posts: