2G + 4G = True!

June 2, 2015

2G-nokia-3310In August 2012 AT&T announced that their 2G network would be shut down latest January 1 2017. This was somewhat surprising to me since roughly 90% of all M2M devices connected to mobile networks used 2G. (https://connectcompute.com/2012/08/08/what-will-be-the-impact-on-m2m-of-announcement-to-shut-down-2g/) Given that 3G is something of a compromise I would have believed that 2G and 4G would be a better bet – one with cheap modules, low bandwidth and great coverage and one focusing on data intensive terminals and applications.

Since two years, we have started to see mobile operators taking different roads for IoT. Good examples include Tele2 who only provide connectivity and great partnerships, Telenor Connexion who was the first to use both Jasper and EDCP (because they follow their customers) and KPN who returned back to Holland, building their business from there with excellent roaming.

And here we go again! Telenor Norway’s CTO, Magnus Zetterberg, said at an investor meeting in London that the company plans to completely shut down its 3G network in 2020, five years before it closes 2G in 2025. “It’s better to retain 2G than 3G because all the devices today are still embedded with 2G, so you will lose out without the network,” he said. “2G is still important for the M2M market.”

I believe this is a good approach since replacing all 2G M2M modules installed across the country to something else, even if only a SIM-card from someone else, is a disturbance and cost the customers neither expect nor like. The labour cost involved in changing are typically far bigger than the hardware. And Telenor is creating yet another criteria for customers to evaluate when picking mobile operator for their IoT applications. And with a 2G/4G approach an operator probably has a better answer to a customer who want to deploy a large IoT project today with an ROI calculation for 8-10 years.

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Plumbing or solutions?

March 6, 2014

PipesDevice connectivity platforms for mobile operators have been discussed for years. There have been two primary platforms on the market – Ericsson and Jasper – with Ericsson more focused on the ability for the operator to manage M2M business efficiently and Jasper having been more focused on adding solution partners to their platform thus to their mobile operator customers. Up until now most mobile operators have had one of these platforms and in many cases an in-house alternative somewhere. But at MWC Telenor Connexion announced that they add Jasper to their Ericsson platform (once acquired from Connexion). According to Per Simonsson, CEO at Telenor Connexion: “Deploying services from the two leading platform providers ensures greater flexibility and enables us to collaborate with new partners and operators in global deployments“. I believe Telenor Connexion has a clever long-term strategy to become technology agnostic when it comes to platforms and bearer technologies in order to get a strong position for global business and to become flexible in supporting customer’s changing needs over time.

This announcement caused some stress here and there since some operators used the situation of being the only Jasper customer in a market as a differentiator. This is of course not a sustainable way to create a position in a market and it was only a matter of time until the opportunity would have been gone anyway.

I have always argued that mobile operators should refrain from a GSM-only approach in M2M and that they should be aware that Jasper’s business model is quite comparable with an MVNO from the operator’s point of view: The operator get some additional traffic but might loose the relationships with partners and customers and once and for all become a pure connectivity provider. Nothing necessarily wrong with that but most mobile operators active in M2M state that they don’t want to become just a connectivity provider. Yesterday I read that Jasper is launching the world’s first commercial end-to-end Global SIM product based on Giesecke & Devrient (G&D) technology. It’s is aimed at the IoT market and will allow enterprises to remotely manage embedded SIMs over the air (OTA).

The ability to change operator over-the-air is a necessity in M2M and I saw a GSMA demo at MWC 2012 demonstrating this. Mobile operators who don’t have the ability to go down the verticals and applications in M2M thus “outsource” partnership and business development, might be stuck with plumbing when the OTA provisioning is in place. I see only two main roads ahead for operators (including the M2M MVNOs): invest and get engaged in applications, solutions and verticals or provide the connectivity. And anyone getting involved in applications and solution, service enablers or operators, need to use a connectivity agnostic approach like Telenor Connexion.

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M2M in its teens – the industry is shifting gear

April 5, 2013
The M2M industry is rapidly leaving the first connectivity focused baby phase – thank god! – and enters the productivity phase. This is where we look at operational issues, capabilities and value. Vendors and operators are preparing themselves to be able to serve the market better and more efficiently. And new partnerships, alliances, initiatives and M&A activities pop up on a daily basis. This is all very good and makes life easier for developers, integrators and customers. But it is more about preparing for the business to take off than making it taking off. It mainly improves the capabilities to deliver in an efficient way.

Today’s initiatives are signs of a developing industry. Building blocks are put together into candidate platforms and architectures. As always most of them will fail over time but still it is an important part of growing up. Let’s look at a couple of recent M2M “teenager activities”:

  • Telefónica and Telit cooperate in M2M Air, providing managed M2M services globally
  • Etisalat group just joined KPN, NTT DOCOMO, Rogers Communications, SingTel, Telefonica, Telstra and VimpelCom in the M2M Multi-Operator Alliance
  • Ericsson and SAP announced a partnership at MWC and talk about the M2M Eco-system
  • Satellite operator Orbcomm acquired MobileNet who provides custom mobile data solutions for the heavy equipment and railroad industries
  • Wipro and Axeda announced a strategic alliance to provide services and end-to-end solutions to help organizations connect with any asset, leverage machine data to enhance business processes and develop new innovative enterprise applications.
  • TeliaSonera, France Telecom-Orange and Deutsche Telekom collaborate to increase the quality of service and interoperability for machine-to-machine (M2M) communications
  • Claro Brazil joins a growing list of Jasper Wireless operator partners including AT&T, América Móvil, NTT DOCOMO, Telefónica, VimpelCom, KPN, SingTel, Etisalat, Telstra, Rogers, CSL and more
  • Several operators including TeliaSonera, Swisscom, XL and have signed up with Ericsson to use DCP for improved M2M service delivery
  • AT&T has several M2M initiatives including AT&T Control Center together with partners like Jasper Wireless, Axeda, Sierra Wireless and SensorLogic.
  • Airbiquity and China Unicom are teaming up to provide telematics services for the Chinese automotive market
  • Vodafone Vehicle Connect and Towers Watson’s ‘DriveAbility’ programme will accelerate the pace at which insurers can get new services to market, and at a competitive cost
Looking at mobile operator subscriptions for M2M, the market continues to grow roughly 25-30% per annum. The number of cellular M2M subscriptions nearly doubled between 2010 and 2012 to reach 143.7 million according to Pyramid Research. They also claim China is growing over 40% per annum and will become the largest cellular M2M market this year. We should remember that a lot of M2M applications share cellular subscriptions or use other technologies to connect.

So operator’s M2M business is growing quite rapidly but from small numbers. In a fairly well-developed M2M market like Sweden, M2M subscriptions are roughly 20% of all mobile subscriptions today. But still most of the market potential is untouched. Policy-driven markets like smart meters, big global markets like connected cars and consumer oriented stand-alone solutions are all fairly well addressed. But small business is big business also when it comes to M2M, and these companies are only addressed by independent Service Enablers, developers, integrators and turn-key solution providers. The alliances, partnerships and M&A activities aren’t reaching that far. A company connecting 100 of their “things” per year in maybe 25 countries across the globe is simply of no interest to any of the large players. The same goes for ,a company who want to develop a specific application to connect 25 of their “things” in a country, unless they are filthy rich.

Success in SME will come from successful platform support for specialist service enablers, developers, integrators and turn-key solution providers. That has little to do with technical issues and a lot to do with trust and business models. This has to be resolved before M2M will grow up.

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