M2M: Connecting the world

Telcos want to go beyond and are offering M2M services to government and business
Bain&, Cisco, Connectivity, IoE, M2M, Machine to machine, Operators, Smart citites, Telecommunications, Telecoms, Vodafone Qatar, Xona, Applications

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A cross the Middle East and Africa, operators have started to embrace the opportunities of Machine to Machine (M2M), as it is an opportunity for operators in the region, mostly for the ones with most developed technology, such as LTE.

“The machine-to-machine (M2M) communications technology is driven by the explosion of networked connections, with 50 billion physical objects linked to the Internet by 2020, and 500 billion by 2030. We are entering into a new era where everything will be connected to the internet,” said Rabih Dabboussi, general manager at Cisco UAE.

Dabboussi believes that, as a result, business value creation has shifted to the power of connections and to the ability to create intelligence from those connections.

“By 2022, Cisco predicts that person-to-machine and person-to-person combined connections will constitute 55% of the total global IoE value at stake ($6.37 trillion), while M2M connections will make up the remaining 45% ($8.02 trillion),” he added.

George Galica, head of Managed Services at Vodafone Qatar, agrees and also foresees this opportunity for operators.

He said that the Internet of Things is the next evolution of the digital economy. “For public and private sector customers in this region, especially with respect to privacy and protection, this evolution will mean a fundamental shift in attitudes and policy. I believe that IoT in this region and around the world is a force for good. M2M is an important vertical for Vodafone both nationally, regionally and globally.”

However, operators are facing challenges when developing M2M. According to Analysys Mason, to secure leadership in this market, retail presence and billing may be more important than network ownership when developing M2M.

Galica disagreed and he said that having an intelligent billing capability in M2M is at the operators’ core and therefore that is not a disadvantage. “Operators generally also enjoy a large retail presence; and so again I do not see how these two elements are disadvantages to operators when developing M2M products and applications.”

Riad Hartani, partner at Xona,believes that operators should focus on understanding alternative models to the ones they are using today to rollout M2M services.

“This in turn, requires analysing alternatives to their 2G/3G models, and in some cases competitive models to what they have built already. Key is to focus on the services and managed services angle to various industry verticals, and work with the appropriate technologies based on specific context,” Hartani added.

Abdulrahman Addas, partner at Bain & Company, said that the most important challenge is the ability to offer end-to-end solutions to the customers or become effective in enabling third-party specialised resellers or solutions providers in offering such end-to-end services to the end customers by being a one-stop-shop for these providers, given the presence of appropriate networks and low cost model to compensate for the low average revenue per device.

Telcos are aware that, in order to offer the right M2M service, they need to improve certain areas. Hartani believes that the key is to provide different pricing and services models on the business front, and develop strong capabilities in areas adjacent to their core telecom expertise, such as cloud management and advanced data analytics to bundle on top of pure connectivity models.

He also commented that M2M and IoT overall is on a pace to grow over time. However, Hartani said that it is unclear if operators will be the ones taking best advantage of this growth.

Smart Cities

Operators are embracing M2M as they are the companies that are enabling the connection to citizens daily. Governments are enabling Smart Cities to offer inhabitants a better experience. Public and Private Partnerships (PPP) in this field between the telecoms sector and governments are paving the growth for telcos in this specific vertical, offering M2M applications that are focus on Smart Cities specifically.

“Smart Cities will benefit significantly from M2M growth, with cities using the network as the platform to transform physical communities to connected communities with technology, apps, and business models enabling economic, social, and environmental sustainability,” Dabbousi told to CommsMEA.

Addas said that innovation is mostly around developing the application eco-system leveraging M2M connectivity in smart cities.

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