What difference does an operator M2M alliance make?

GMAMobile operators are working hard to formalize alliances for the M2M market. Global M2M Association recently added Bell Mobility and Softbank to the team of collaborating operators. The other GMA members are TeliaSonera, Deutche Telekom, Orange and Telecom Italia. The M2M Multi-Operator Alliance just re-branded themselves to M2M World Alliance and includes SingTel, Telefonica, Etisalat, NTT Docomo, Rogers, KPN, Telstra and Vimpelcom. The aim is to provide something like a similar customer experience across the covered countries, making the alliance brothers and sisters look attractive to customers and partners.

This sounds easy, obvious and becomes a way to compete with the really big players like AT&T and Vodafone. But reality bites. Even if they all use a very standardized network it is very challenging to bridge national, cultural, strategic, technical, operational, practical and political differences between the large organizations and countries involved. And on top, most M2M business is and will remain local. The devices are in many cases fixed why roaming is less of an issue. One can argue that by collaborating with colleagues operators will learn from best practice and further down the road they might make collective decisions on systems to use etc. That would be good but not really so much benefit for the M2M customers as for the operators themselves.

Another way of looking at it would be that as long as these efforts circles around connectivity and related services like billing, support, certification and device monitoring chances are realistic that they could be fruitful. However, the value delivered would be difficult to charge for since customers expect this to work already. And having operators to collaborate on industry specific solutions with increased revenue potential seems less realistic. And as long as all territory isn’t covered the common facade will need odd additions to give some customers what they are looking for. Yet another challenge to the alliance concept is all M2M solutions using other connectivity than the cellular networks. And even worse, it’s obvious that most solutions will use a mix of connectivity and the mix will change over time. Mobile operators have almost 200M M2M subscriptions in use by now and the growth rate remains 25-30% per year. But there are a lot of devices connected using other fixed and wireless technologies. A quite common estimate is that some 10% of the connected things will have a SIM card.

Don’t get me wrong: I really like the airline alliances and appreciate the efforts undertaken by the operators to collaborate. But I don’t think these efforts will change the destiny of M2M in any substantial way.

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