M2M: From Millions To Billions In 10 Years
BMI View: We have long-held a positive view on the potential of machine-to-machine (M2M) technology to transform the telecoms industry. We expect to see strong growth in this area over the next 10 years, with the technology forming a key part of our 2024 outlook (see 'The Telecoms Industry In 10 Years', 12 June 2014).
For telecoms companies, M2M represents the next step in the transition from voice to data, with huge revenue growth opportunities presenting themselves as more SIM cards are connected to networks. Mobile phones are generally limited to one per person in any market. However, with M2M, the ratio could be anywhere between five to 10 connected devices per person. We believe this will enable the number of connected M2M datacards to outnumber the amount of cellular subscriptions within 10 years.
We are growing increasingly optimistic towards M2M technology as governments are also taking notice of the sector's potential and playing an active role in the technology's development. For example, Brazil's government has lowered taxes on M2M SIM cards, while in the UK, smart meter contracts have been auctioned off. Alliances between operators and M2M vendors are becoming increasingly common and a critical part of the M2M ecosystem, as telecoms operators' investment in upgrading to 4G networks provides the backbone infrastructure for M2M connectivity. Auction of 'white space' spectrum from the digital switchover should also provide a boon for the M2M market, allowing companies further bandwidth and greater coverage of rural regions. Meanwhile, the switch to 700MHz frequencies is expected to be completed by the end of 2015 and should also provide a global standard of technology which will allow M2M to flourish.
|M2M Moving Beyond The Hype|
|Selected Operator M2M Connections (mn)|