The Non-human connection

Revenues from mobile connected M2M devices will rise to $400 mn by 2017, from $110 mn in 2012, says a Juniper Research.

One-third of the revenues will come from consumer and commercial telematics and vehicle applications. Some other areas which will contribute significantly to M2M revenues include mobile connected buildings, alarm systems, smart grids, and tracking devices watched from a monitoring center.

What is M2M?

This new trend is all about connectivity of one machine to another which allows them to exchange information and perform actions without the manual assistance of humans.

In M2M (machine-to-machine), a remote sensor gathers data and sends it wirelessly to a network, where it's next routed, often through the internet, to a server such as a personal computer. At that point, the data is analyzed and acted upon, according to the software in place.

Older systems worked similarly, using ‘telemetry'. Telemetry technology, in many ways, was the forerunner of the more advanced M2M communications systems. Both telemetry communication and M2M communications transmit data through a sensor. The major difference between the two is that rather than a random radio signal, M2M communication uses existing networks, such as wireless networks.

The key components of an M2M system are sensors, RFID, Wi-Fi or cellular communications link, and automatic computing software programmed to interpret data and make decisions while remaining transparent to the user.

Growth Drivers

According to the research, the automotive industry remains the most promising M2M area. Besides, rural India contributes a large chunk to the revenues and will help in driving huge demand. Big operators like Reliance Communications are focusing on high impact M2M applications for the rural market.

These are mobile applications that aid automation, surveillance, remote monitoring, and data gathering. The major focus of Indian operators is on the rural market. The focus is also on developing applications that enable automation of agro and irrigation services, water level monitoring, and data gathering for milk and agri-cooperatives, fisheries, poultry, and soil analysis.

However for the urban market, the opportunity lies in mobile ticketing, purchasing in kiosks, vending machines, and remote monitoring of office automation products.

Both Reliance and airtel are competing to get their share in this space through metering applications.

The future growth of M2M will be driven by user-directed interventions. In this respect, perhaps the significant factor is the growth of cloud computing and its impact on business analytics.

Hindrances

M2M is termed as a big opportunity but still many experts say that the Indian operators are not very aggressive about it. Some of the predominant challenges prevailing in the industry are lack of penetration of the broadband predictable networks, and lack of focus and demand for these apps have been hindering operators' plans, so, there is a need for indigenous research and development for solving education, water management, government programs' management using broadband networks.

Operators also need to adopt aggressive new business models to exploit the M2M opportunity. ARPU for connected M2M devices is much lower compared to mobile broadband subscribers. This can be problematic for operators where an industry indicator of the overall financial health is the growth or decline in the overall ARPUs.

Although, the number of potentially connected M2M devices is expected to dwarf the number of mobile broadband subscribers. M2M also brings with it specific customer support requirements, often including expertise that operators may not have in the key M2M applications.

(Article was first published in Voice&Data)