Vodafone leads M2M pack, says study
Global scale gives the cellco a headstart in a cellular market which will could see 365m connections in 2016
Published: 18 January, 2012
READ MORE: Metrics | Vodafone Group | Infrastructure | M2M
As the machine-to-machine market becomes a mainstream element of the cellular business model, Vodafone is best placed to take advantage on a global basis, according to a report from Machina Research.
Vodafone is just one of the major multinational cellcos which has established specialized M2M business units, with France Telecom, Verizon, Deutsche Telekom, Telenor and Telefonica also standing out from the crowd. But Vodafone has a particularly broad reach, and in the first half of its 2012 fiscal year, announced in November, it reported that M2M revenue had increased by 33%, with 6.2m SIMs active (though Vodafone did not attach a revenue figure to that base).
In Machina's benchmarking exercise, Vodafone emerged top, followed by Deutsche Telekom. "Vodafone's global scale gives it a substantial competitive differentiator," said report author Matt Hatton, though he insisted that this factor had no more weighting than the other five criteria against which Machina assessed the carriers - along with reach, or 'place' it ranked the companies across five other categories, labelled pedigree, platform, partnerships, process and people. Vodafone also scored highly on partners, partly because of its stake in Verizon Wireless, an aggressive M2M player in the US.
The exercise was designed to assess future impact rather than performance to date. Verizon alone came in sixth place in the league table, while DT, AT&T, Orange and Telenor were ahead of it. Hatton said DT had earned its second place because "they have done some great work with their partnership strategy; they have a natural advantage in the M2M world with an inhouse systems integrator in T-Systems; they're focusing a lot of attention on building up M2M capability; and their geographical coverage is good thanks to last year's alliance with Orange, and their US presence."
Machina predicts that there will be 12bn M2M connections worldwide by 2020, generating revenues of €714bn. On cellular connections only, the figure will rise from 110m in 2011 to 365m by 2016, a CAGR of 27%, and will generate about $35bn in services revenue, according to another study by ABI Research. M2M practice director Sam Lucero said the largest cellular segments by revenue will be automotive telematics and smart energy, representing markets worth $15.5bn and $7.5bn respectively in 2016.
"As mobile operators further develop their M2M service offerings, software platforms and M2M application developer support will feature as increasingly larger components of the operators' services," said Lucero. "For example, AT&T announced on January 9 that it would be reselling Axeda's M2M application platform in a US carrier exclusive deal. This platform will enable AT&T customers to more easily develop and deploy complex M2M applications."
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