Networking

Future connections

When Ericsson CEO Hans Vestberg visited the UAE earlier this year he outlined his vision of the future of the telecoms industry, at the heart of which is the belief that by 2020 there will be 50 billion connections.

“We should stop talking about how many subscribers we have out there and we should start talking about how many connections we have in the network,” says Vestberg. “We are already seeing it with E-readers, cars connected to the network, traffic controls and so on. If the last decade was an important step for the telecommunications industry, we believe that the next decade is going to be equally or more important for communication.”

While mobile phones and other portable devices have provided the bedrock on which the modern telecom sector has been built, the next wave of connections is expected to come from hitherto unconnected devices, with slew of machines equipped with Sim cards enabling them to talk to each other via the internet.

Hadi Raad, Principal with Booz and Company defines machine-to-machine (M2M) as the concept of autonomous, two-way communications between a wireless module and a server or computer. “M2M combines machine connectivity, communications, and information technology to help organisations control, monitor and acquire data from their entire extended enterprise,” he says. “Wireless M2M business applications can broadly be grouped into five main categories: telemetry, monitoring and alerting, control, payment and transaction, tracking.”

Such connectivity has the potential to transform a wide range of industries , from tracking solutions in fleets of vehicles to smart utility metering to the improvement of patient care through instant device communications, remote monitoring and disease management, communicating information through the transfer of data in real time can help to enhance productivity and cut costs.

Raad says that broadband M2M applications address high-bandwidth , and potentially interactive content requirement. “Applications could include remote information display with rich content such as video, point of sale content delivery like remote video control of a street advertisement through to in-vehicle camera systems.”

ABI Research estimates that by 2014 cellular M2M connections will approximately triple from 75 million in late 2009. It suggests that these connections are split almost equally between telemetry and telematics applications, with the former growing at a slightly faster rate.

“Unlike the cellular M2M module market, which has been hit hard by the global recession, cellular connectivity is characterised by ongoing subscriptions that, once deployed, tend not to churn or change that much,” says ABI’s M2M research practice director Sam Lucero. “So it’s an expanding installed base, and the effect of the economic crisis has just been to slow the overall growth-rate of that base to a certain extent.”

For mobile network operators (MNO) there is the obvious benefit of an increased number of connections using its network. In addition to this, because the Sim cards can be sold as wholesale, customer acquisition costs are reduced and no need to invest additional resources in expensive call centres to deal with disgruntled subscribers.

market potential

At an Ericsson-led discussion forum in March a group of telco and M2M industry figures concluded that in the M2M market, most mobile operators are primarily bit pipes and that there is an opportunity for mobile operators “to take more control of the M2M value chain and en¬hance their profitability”.

While MNOs have not been very successful yet in going up the value chain because there is no deep understanding of end user applications, it was suggested, MNOs can provide the capability to extend beyond the bit pipe, they need to understand the true require¬ments of M2M customers, and this is often not an existing area of expertise among MNOs. As a remedy it was suggested that there is a need to focus on a few value add areas and become really good at these rather than trying to address all areas.

ABI Research’s Lucero suggests that mobile network operators explore opportunities to partner with, or even acquire, niche technology enablers that are developing robust connected device platforms. He points to partnerships between major US telecom operators with firms like Jasper Wireless, Nphase (a joint venture between Verizon Wireless and Qualcomm), Sierra Wireless and mobile virtual network operator M2M DataSmart to develop packaged or standardised applications for specific sub-segments of the market.

“These developments help large operators that have resources, brand position and customer relationships to speed up their M2M activities by bringing in the business talent, technical expertise, and development work that exists already in these smaller ‘enabler’ shops,” he says.

According to Booz and Co’s Raad, several operators in the Middle East offer M2M services, such as fleet management solutions for tracking, monitoring and management for company vehicles Machine-to-Machine (M2M) solutions for data and information exchange telemetric solutions enabling measurement and metering devices to send measuring to monitoring equipment sales force automation.

At the start of the year, Etisalat announced that it had teamed up with Dubai-based automations firm Pacific Controls to jointly work towards offering machine to machine (M2M) applications and support to Etisalat's clients.

Pacific Controls described the deal as “the first of its kind agreement to be signed in the GCC region” with the aim of combining Etisalat’s 3.5G network infrastructure and Pacific Control’s M2M experience to offer customised applications.

“When the mobile phone came, I made the parallel to the light bulb,” says Vestberg. “When electricity came, the light bulb was the natural way where you needed electricity. Today, if you go home, how many things are connected to electricity? Everything in your home. I think that in ten years from now, the mobile phone will be one device that is connected, but we’re also going to see hundreds of others that will be wirelessly enabled.”

Previous ArticleNext Article

Leave a Reply

Your email address will not be published. Required fields are marked *

x
Huawei Fit Band

Competition

Win a Huawei Fit Band worth over 300AED!

0 413We’re giving away one Huawei Fit Band, a high-tech fitness watch with up to 6 days of battery life that …

GET TAHAWUL TECH IN YOUR INBOX

The free newsletter covering the top industry headlines

Send this to a friend