M2M Service Revenue Market to Hit $55.3 Billion in 2019, Mobile Operators to Speed Up M2M Initiatives in 2015

M2M Service Revenue Market to Hit $55.3 Billion in 2019, Mobile Operators to Speed Up M2M Initiatives in 2015 Image Credit: Cadillac

Earlier this year, GSMA in its report said that there will be more than 1 billion M2M connections by 2020. As 2014 draws to a close, the Internet-of-Things(IoT)/Machine-to-Machine(M2M) has progressed significantly from being the year's most hyped technology to becoming a full fledged high-growth area across many sectors specifically power, transportation, health, telecommunications (smart home, smart city) and manufacturing. Mind Commerce, a leading research firm in this segment, has recently published the seventh edition of its End-to-End M2M report, expecting total revenue from the M2M segment to grow by three-folds from USD$37.9B in 2013 to USD$102.3 billion in 2019. The sector's CAGR of 22% over the next 5 years marks the importance of M2M in driving productivity, efficiency and delivering a new range of innovative services to meet real-time communications and information needs across various applications and industries. 

Telecommunications service providers worldwide are already beefing up their M2M capabilities to tap into this fast growing market, evident through the smart home, smart city, smart health and telematics programs spearheaded by the likes of Telefonica, AT&T, Orange and Telstra. In collaboration with many other players within the ecosystem, service providers are enhancing and rolling out IoT/M2M connectivity services, platforms and cloud applications for both retail and enterprise customers, especially across sectors which are experiencing a high demand for M2M services. Mind Commerce said that given the expected growth in the M2M space and the deployment of M2M in key economic sectors, total service revenues for network operators and other players providing both connectivity and content/applications will grow from USD$21.3 billion in 2014 to USD$55.3 billion in 2019, at a CAGR of 21.0%.  

One key strategy for service providers looking into augmenting their M2M revenues is to focus on providing integrated M2M services for enterprise customers across sectors where M2M deployments are expected to be the highest. Mind Commerce said that among sectors which are expected to rake in the largest M2M revenues are Healthcare, Manufacturing and Energy which are forecast to make up 19.2% (USD$10.6 billion), 16.6% (USD$9.2 billion) and 15.4% (USD$8.5 billion) respectively of the total of USD$102.3 billion revenues. Integrated services enable enterprise customers to provide both connectivity and cloud-based applications/content services for their end-customers, and service providers via strategic partnerships with local operators and providers of M2M platforms and cloud services, are best positioned to bundle these as an all-in M2M service. Telematics service providers(from the transportation sector) for example, leverage the service providers' M2M connecitivty services as well as global partnerships to serve their customers across the world. As the vertical expands to cover connected car services for the retail market, telematics service providers, in-vehicle infotainment service providers as well as auto-makers, for example, will leverage the service provider's integrated M2M offerings including the service provider's M2M cloud to deliver their content and services to both local and global customers.

More importantly, added Mind Commerce, operators will be leveraging their M2M services to enhance their existing services - for example, enterprise mobility solutions can now be bundled with M2M connectivity as well as data services for employees - allowing service providers to deliver comprehensive connection solutions for the entire enterprise while preserving the mobile operator's core revenue streams. 

Ray is a news editor at The Fast Mode, bringing with him more than 10 years of experience in the wireless industry.

For tips and feedback, email Ray at ray.sharma(at)thefastmode.com, or reach him on LinkedIn @raysharma10, Facebook @1RaySharma

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