Machine-to-Machine (M2M) Communications Service Provider Benchmarking 2015

03 September 2015
Report type: Strategy Report
Author(s): Andy Castonguay - Principal Analyst, Godfrey Chua, Matt Hatton
Keywords: IoT, internet of things, internet, things, M2M, machine-to-machine, carriers, operators, MNO, CSP, communications, service, provider, global, AT&T, China, Mobile, Unicom, Deutsche, Etisalat, KPN, NTT, Docomo, Orange, SingTel, SoftBank, Sprint, Swisscom, Telefonica, Telekom, Austria, Telenor, Connexion, TeliaSonera, Telia, Sonera, Verizon, Vodafone, strategy, benchmarking, best, practice
Number of Pages: 101

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. 

In this year’s report Machina Research has expanded the global focus of the report. It includes profiles of seventeen CSPs: AT&T, China Mobile, China Unicom, Deutsche Telekom, Etisalat, KPN, NTT Docomo, Orange, SingTel, SoftBank/Sprint, Swisscom, Telefónica, Telekom Austria M2M, Telenor, Telia Sonera, Verizon and Vodafone. With these companies we cover the biggest global carriers as well as the most prominent regional M2M players.

There are two main reasons for examining the M2M capabilities of the CSPs. Firstly it can act as a guide to potential customers on which M2M service providers to shortlist. Enterprises looking to implement M2M will frequently be both implementing a complex solution for which they need expert help and making a long-term commitment. They require a high degree of certainty that they are making the right choice of CSP. Secondly, CSPs are constantly on the look-out for best practice in this developing market. Examining the capabilities of competitors is a good way to highlight areas for improvement.

Machina Research analyses the CSPs on six criteria:

  • Pedigree – The experience that the CSP has in addressing the M2M market. This will often be vertical-specific. While historical success is no guarantee of what will happen in the future it does demonstrate a level of experience in delivering M2M services, which is frequently a very different proposition from traditional voice and data services.
  • Platforms – The software platform(s) that the CSP uses for supporting its M2M connections. Platform choices will often have implications for the efficiency with which a CSP can address the M2M opportunity, in particular in the provisioning and connection management process. This area also includes application enablement platforms and various other software-related issues.
  • Place – Where the CSP is well placed to provide services. This includes analysis of geographical footprint as well as horizontal partnerships with other CSPs in non-footprint markets. In the latter case, particular focus is given to the ability to provide an end-to-end service. It should be noted that a CSP’s ability to generate profit from an M2M connection will be greater if that connection is supported via its own facilities-based footprint rather than through roaming agreements. Also included as a sub-set of this analysis is the availability of broadband (3G and 4G) wireless networks. With regard to network technology choice, the availability (or lack of it) of broadband networks will affect the ability of a CSP to address the needs of particular applications as efficiently as a rival may. It should be noted that there is a well-defined evolution path for most CSPs from 2G to 3G and LTE. Differences related to network deployment will only be highlighted where it differs substantially from the industry norm.
  • Partnerships – Partnering is critical for the success of M2M. The focus is on vertical partnering (i.e. tying up with other players in the value chain to provide a solution that meets the specific needs of the target market). Horizontal partnering (i.e. with other CSPs to provide the broadest footprint possible) is largely covered in the ‘Place’ category.
  • Process – Examining a variety of processes involved in the supply of M2M services including application development, device certification, troubleshooting, SLAs, project management/systems integration, and client support. All of these enable a CSP to deliver an appealing proposition to potential clients. Furthermore, the more value-add provided by the CSP, for instance in application support or systems integration, the larger its likely share of the revenue accruing from any given M2M connection.
  • People – Much of the success in M2M will depend on having the right personnel in the right place. This section examines the number of dedicated M2M professionals, the CSP’s organisation and the fitness for purpose in addressing the M2M opportunity.

The report comprises a section comparing and contrasting the strategies of each of the CSPs as well as some of the key trends. That is followed by separate sections for each CSP outlining their strategy and approach in more detail.

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