M2M CSP Benchmarking Report 2015: The fast growing and increasingly competitive M2M CSP business sees continued global leadership from Vodafone and AT&T

03 September 2015

M2M and IoT are the bright spots in the CSP business today and in this increasingly competitive marketplace Vodafone continues to lead the top tier of players vying for global supremacy. Hot on the heels of Vodafone is AT&T who, with strong growth in the US market, has narrowed the gap. Deutsche Telekom and Telefonica round up the group of global leaders.

Machina Research today published its annual review of the machine-to-machine (M2M) operations of the major global Communications Service Providers (CSPs). Based on detailed analysis of the capabilities of each of the seventeen major CSPs, Machina Research has determined that Vodafone maintains its position as the number one global operator in terms of taking advantage of the global market opportunity. Vodafone is closely followed by AT&T, with the two leaders followed by a group of global CSPs that include the likes of Telefonica, Deutsche Telekom (DTAG), Orange, Telenor Connexion, Verizon and Softbank/Sprint.

Lead author Godfrey Chua noted, “There are many elements to defining leadership and we believe that a true global strategy, with real reach and capabilities, stand among the more important ones. It is also important to consider scale, experience, technology, and velocity. The top tier of global CSPs we have identified demonstrated excellence across all these areas. For multinational corporations requiring seamless, large-scale, and effective global M2M services and solutions, these are the CSPs they should be conversing with.

While not necessarily the best guide to ‘success’ – it is nonetheless important to recognize CSPs in terms of the raw numbers of M2M connections. For this reason, Machina Research has added coverage of China Mobile and China Unicom for the 2015 report. China Mobile has brought the notion of pure M2M connection scale to a new level. The CSP reported a whopping 42 million M2M connections at the end of 2014 (it exceeded the 50 million mark early in 2015), double the size of global leaders Vodafone and AT&T. China Unicom also finds itself in the tier of large scale CSPs with M2M connections well in excess of the 10 million mark. Both Chinese CSPs are however decidedly local in their M2M strategies. As such, they cannot be truly considered among the top tier of global M2M CSPs. Other large scale players include Verizon, DTAG, Softbank/Sprint and Telefónica.

The report also highlights the increasing importance of M2M to the CSP business. While worldwide subscription growth for traditional mobile services now averages in single digit percentage terms, the weighted average across the seventeen CSPs profiled in the report for M2M connection growth was 28%. What makes the growth more notable is that the two global leaders, Vodafone and AT&T – even with their industry leading scale – managed to outpace all the global players covered in the report, accomplishing grow rates several percentage points higher than the weighted average of all the CSPs covered. The M2M CSP business is thus robust and given its still nascent nature, provides an important avenue for CSPs to discover new revenue streams. For the leading CSPs analyzed in the report, we found several common themes and trends that defined overall activities in the last year:

  • IoT relevance remained an important priority for leading CSPs. Consequently, we saw continued efforts to broaden technology portfolios. There is high interest in and real momentum around LPWA, as well as exploration of application enablement platforms and their implementation.
  • Multiplatform approaches have emerged at both the connectivity and application enablement areas. This is a result of efforts seeking to provide customers with greater choice and flexibility – as well as to capitalize upon potential enterprise pull-through opportunities.
  • Alliances hold tight as it remains an important avenue for CSPs to offer more global support. Each of the major alliances made good progress in the last year with commitment from existing member CSPs holding tight.

Machina Research CEO Hatton further comments: “The next twelve months will be a very interesting time for the industry as efforts move from implementation phases to real world experiences. We will be able to observe initial market responses to the new technologies and approaches being proposed. Will customers respond to LPWA and as a result significantly deepen the market potential for M2M and IoT? Will multi-platform strategies yield accelerated customer acquisitions? Will the alliances deliver the kind of service frameworks customers will respond to? There will many lessons to be learned in the year ahead...

About the report

The M2M Communications Service Provider Benchmarking report is the most comprehensive analysis of best practice for CSPs in M2M and IoT. Extending over more than 100 pages, it gives Machina Research’s view on the likely long-term success of Communication Service Providers in the M2M/IoT space.

For more information on the report, click HERE.

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