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3G/4G and the changing fortune of M2M comms

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Deepa
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BANGALORE, INDIA: Machine-to-machine (M2M) solutions consist of applications, specialized devices, management platforms and services that allow enterprises to connect physical assets in specific markets or across geographies.

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These solutions connect any assets which benefits from two-way communications - anything from power meters to cargo trucks in transit, to vending machines, pipelines, wind farm turbines, etc. These assets can be mobile or they can be stationary. M2M communication covers two broad aspects - Telematics or remote control of machines and Telemetry or monitoring and/or collection of data from machines.

M2M technology allows businesses to monitor their machines and electronic assets, analyze the data generated using backend software, and respond efficiently and effectively in real time. The ability to send information to the machines can also provide great value, such as reducing costly field service calls by remotely sending repair commands.

M2M as a technological possibility has been around for many years, although its use has been limited both in types of applications and numbers. Recently, however, emerging high-speed wireless networks are transforming this space and its potential impact on the enterprise is significant.

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Connecting to the mobile Internet over 3G and 4G networks changes the fundamental nature of M2M communications, giving it new features and capabilities. Driving mobile capabilities into a wide variety of devices allows businesses to enable new opportunities and reduce operational costs through higher efficiencies.

 

For example, the introduction of smart grids, which combine M2M-enabled smart meters, wireless technology, sensors and software, has completely revamped the utility industry in the US. Today, energy providers can remotely read electric meters, balance electricity demand, pinpoint the location of outages and respond to issues - without ever leaving the office.

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In light of the recent power outage across Northern India, the root cause of which was over-drawing from key power grids, such applications have enormous potential. For instance, with smart meters, electricity suppliers can monitor and program account changes from their customer service center and wirelessly signal the connected meters to turn electricity on or off.
Smart meters and remote monitoring will help greatly reduce dependency to have feet-on-ground which is a crucial challenge in far flung locations in India.

In general, to bring greater efficiency to an often challenging usage monitoring scenario in India, M2M can provide an effective solution while bringing about almost immediate cost savings to various utilities companies.

Growth in M2M communications is being driven by several factors, including worldwide expansion of mobile networks, technological advances and regulatory requirements for telematics and telemetry functionality.

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ABI Research, in a 2012 report on Cellular M2M Connectivity Services observed that "the cumulative cellular M2M connections globally will rise from about 110 million connections in 2011 to approximately 365 million connections by 2016." 1 Companies like AT&T are looking to mobilize and embed wireless capabilities into several new categories of devices like heart monitors, dog collars, medicine holders, car ignition switches and more. NTT DoCoMo estimates that in a few years, two thirds of their mobile customers in Japan will not be humans.

While much of the action is happening in the obvious verticals today - such as transportation, manufacturing, utility, consumer electronics and logistics - the prospects for future M2M applications is much greater. Particularly with the broad basing of 3G and 4G networks, significant opportunities for applications such as mobile healthcare and home monitoring are set to arise.

M2M is a good way for mobile services providers to broaden their revenue sources as well. While the market opportunity from the wireless enablement of M2M communications provides reasons for optimism, the actual revenue potential, growth rates and pro?t margins associated with M2M deployments are still works-in-progress. The relatively low Average Revenue Per User (ARPU) is a key concern. But the volume of connected devices is potentially so large that this can help offset lower margins. AT&T alone has currently has more than 13 million connected devices on its network and growing.

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A joint study by GSMA and Machina Research predicted that by 2016 end, the overall business impact (includes sales and services of M2M devices, and cost reduction and service improvements) of the connected life in Asia Pacific will be almost US$896 billion.3

Other M2M revenue streams for service providers can be from providing end-to-end systems integration and management of M2M applications - from deployment of smart grids to asset and data management, including managed/hosted M2M services at their data centers. AT&T, for instance, has put in place organizations to focus on both B2C and B2B M2M opportunities.

Value-added services like the collection and analysis of data from M2M transactions are another revenue opportunity, especially for such verticals as utilities, manufacturing, auto insurance, etc, where the data can be turned into useful, actionable information.

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Operators will, however, need to be prepared for large volumes of mobile data generated by the connected devices by effectively managing their mobile networks. In this respect, too, 3G and 4G networks will play an important role in M2M.

While many M2M connections still run on 2G/GPRS technology, these networks were not designed to support the large-scale, high density M2M applications now being deployed. Modern 3G UMTS/HSPA technologies are five to more than ten times as spectrum-efficient as GPRS, while providing far superior speed. This is vital not just for carriers managing capacity and growing demand, but also for companies deploying many devices.

Additional challenges to realizing the full potential of wireless mobile M2M include fragmentation of mobile networks and the need to ensure global network coverage, while ensuring lower roaming costs for international M2M deployments. It can get complicated for enterprises when they have to work with several operators across geographies to achieve global coverage. This could entail multiple operator relationships with each using different network platforms, which would complicate deployments.

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The solution is standardized platforms by specialized service providers. AT&T for instance, provides a single SIM that offers seamless global coverage. This along with the AT&T Control Center powered by Jasper Wireless, helps enterprises and M2M service providers the ability to manage global wireless device deployment with real-time access, reliable development and diagnostic tools. Such collaborations can help reduce operational expenses, address new revenue streams and improve time to market for new categories of connected devices.

M2M solutions represent the next wave of achieving higher efficiency and productivity from deployed assets, and increasing the return on deployed capital.

The author is executive director, Advanced Mobility Solutions at AT&T.

References cited
ABI Research. (Q1 2012). Cellular M2M Connectivity Services.
Qiu, J. (n.d.). NTT DoCoMo: Review of a Case. Japan Media Review.
GSMA, in partnership with Machina Research, on the Proliferation of Connected Devices OR Cellular M2M Connectivity Services, ABI Research, Q1 2012

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