Ovum suggests that global telecoms should gear up to reap machine-to-machine (M2M) opportunity that will reach $66 billion by 2019. Out of this, operator revenue will be $25 billion by 2019.
The cellular M2M market will bring in $252 billion for the 2015–19 period, said Ovum.
M2M connections will be growing 162 percent to 530 million in the next five years. Asia and Oceania will have the most connections (over 200 million by 2019), followed by Europe and the Americas.
Telecom operator revenue share of the total cellular M2M market will increase to $25 billion by 2019.
In 2013, telecom operator revenue was largely comprised of managed connectivity (43 percent) and network-level data transport (36 percent).
However, with figures anticipating the largest revenue opportunity to be within other layers (integration is expected to account for almost 50 percent of total M2M revenue in 2019), operators need to look beyond connectivity to reap the bigger rewards.
Jamie Moss, senior analyst at Ovum, said: “We’re seeing device and application management become the new focus in M2M, and the ability to collect vast amounts of data will be of considerable value. Data itself has intrinsic worth, but it is the business decisions made based on the aggregation and analysis of that data that are the greatest source of value for enterprises and their connected service provider partners.”
Ovum has highlighted five key models.
Some operators are developing end-to-end services internally as an offshoot of their own supply chain needs.
Others are crafting bespoke, end-to-end solutions for individual enterprise partners, though this remains the exception.
An increasingly common strategy involves outsourcing to acquire M2M specialisation, which is being done in three ways.
Some operators have acquired dedicated M2M service providers to own that intellectual property, resell those services into other markets and use the assets acquired to develop new services.
Others have partnered with specialists from other markets, working in unison to deliver connected, value-added variants of existing services. Lastly, some operators have opted to license suites of third-party M2M services from aggregators.
Ovum suggests that telecom operators must educate enterprises in the utility that connectivity brings. Enterprises should never have to become experts in connectivity.