Vodafone expands its business reach, into M2M and central Asia
Published: 22 July, 2009
Vodafone has been energetically seeking new lines of business as its core markets saturate, and this week sees two contrasting additions to the giant cellco's portfolio - a new service platform for the expanding machine-to-machine (M2M) sector, and a partnership in one of the world's most undeveloped, but rapidly growing, mobile markets, Azerbaijan.
With specialist analyst firm Berg Insight predicting that MSM services revenues will reach €8.9bn by 2012, up from €3bn last year, Vodafone is eager to cash in. It is also pushing the green angle, claiming M2M services could cut greenhouse gas emissions across the European Union by more than 90m tonnes by 2020.
"The market for M2M smart services using intelligent devices is taking off," said Nick Jeffery, CEO of Vodafone Global Enterprise, in a statement, though the carrier has been somewhat slower than rivals like Orange in announcing platforms to support such systems on behalf of enterprises, governments and utilities.
Initially, Vodafone's M2M platform will be targeted at smart metering, connected cars and remote equipment monitoring, with other applications to follow over time and according to demand. The 100-strong M2M division will develop and support services and applications for these segments, provide input on devices, and host the systems on Vodafone's networks - increasingly, M2M technology is requiring the fast speeds of 3G, rather than relying on ultra-low power, low speed embedded wireless. Among the managed services will be the ability for M2M clients to activate, suspend and deactivate connected devices centrally.
On a very different front, Vodafone has signed a non-equity partnership with Azerfon in Azerbaijan. Under the Partner Market agreement, Azerfon will have exclusive access to a range of products, services and devices from Vodafone in the country as well as "access to Vodafone's experience in supply chain management, the acquisition of enterprise customers and improved network interworking". Azerfon is currently building its 3G network and will be able to tap into Vodafone's expertise in this area. Vodafone's products and services will be marketed with a co-branded approach and customers will be able to roam onto Vodafone networks abroad. Vodafone already has an important strategic partnership with Russian cellco MTS.
Mobile penetration is about 75% in the country and growing rapidly. The Russian and central Asian markets remain important growth areas, though this slowed somewhat in the past year. Penetration in Russia is now 135% and the three largest markets in the region - Russia, Kazakhstan and Uzbekistan all saw declining levels of net subscriber additions in the first quarter of this year. The only three markets that saw greater gains in Q1 than Q408 were Azerbaijan, Turkmenistan and Afghanistan, indicating the desirability of the Azerfon agreement. The other countries in the area - Kyrgyzstan, Tajikistan, Georgia, Armenia and the two fragmentary markets of Abkhazia and Nagorno-Karabakh - have also seen some fall-off in subscriber growth.
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