Frost & Sullivan
M2M APPS: How do you think the Telecom giants will shape the future of the M2M industry?
RINITA SEN: In the value chain of M2M communications, the telecom service providers play a major role. In the US, we see a lot of acquisitions and collaborations by leading mobile network operators (MNOs) such as Sprint, AT&T, and Verizon. These MNOs are teaming up with application platform and device management platform providers to enhance the growth of M2M. Similarly in Europe we see companies like Vodafone and Telefonica, and SingTel in Asia, collaborating with multiple M2M platform providers for a global evolution. Howevert, MNOs are not the only ones influencing the communication aspect of M2M. Mobile virtual network operators (MVNOs) such as Jasper Wireless are providing service delivery platforms (SDPs) that act as a layer between applications and the MNOs. These SDPs are critical in the growth of M2M as they help standardize the applications in a multi-carrier, multi-national scenario.
M2M APPS: How do you think the M2M market is growing its presence in the Indian market?
RINITA SEN: We need to see the growth of M2M at a global level. The technologies required to develop M2M applications are in place, and many of them, such as the core sensor technology or the wireless networking technology, have reached maturity. However, the primary challenge that the M2M industry faces is fragmentation. The vast application areas and the complex value chain of M2M make it a highly fragmented market. A number of standardization bodies such as ETSI, TIA, 3GPP, and others are working on developing global standards for M2M. But as of yet, concrete standards have not been established. Looking at India in particular, the market is still very nascent. The development of global standards may be necessary to drive the growth of M2M in India as well as in the rest of the world. The India market, however, is huge, ranging from rural applications such as agriculture, to urban applications such as consumer electronics.
M2M APPS: What are some of the key trends in the M2M space both globally and in India?
RINITA SEN: The most prominent global trends in the M2M space are consolidation, standardization, cloud computing and service enablement services. Whenever a market is new, like M2M, a lot of consolidation must occur for it to get established. The consolidation arises from the complicated value chain of M2M that has an urgent need to be simplified. Consolidations are occurring in the form of M&As, collaborations, and funded partnerships. Another aspect where a number of global bodies are focusing is standardization. We see a significant number of M2M platform developers concentrating on interoperability. Further, MVNOs and MNOs are partnering with these developers to facilitate simpler and more manageable connections.
Cloud computing is a global IT trend that has affected M2M solutions as well. We’ve seen a number of M2M platform developers hosting their services on the cloud for cost benefits and simpler access. Service enablement services, mostly developed by MVNOs, are platforms that help reduce the "time-to-market" for solution developers and decrease total cost. In India, the market still at a nascent stage, but we are starting to see some initiatives from MNOs such as Reliance and Vodafone. India is a potentially huge market for M2M considering the amount of cell phone subscribers, including 3G. However, in these initial stages, the telecom giants might be interested in focusing on M2M in the consumer electronics market and might later move on to other areas such as agriculture, healthcare, and transportation, thereby creating an incremental awareness among end-users.
M2M APPS: What are some of the biggest challenges that are faced by the M2M industry in India?
RINITA SEN: The primary challenges in the M2M industry in India are not much different from the global challenges; these include a high degree of fragmentation and lack of standardization. Other challenges for the M2M market in India include a lack of end-user awareness for applications and a lower level of proliferation of broadband networks compared to other parts of the world. Furthermore, telecom service providers in India may need to adapt new business models in order to succeed in a low ARPU market such as M2M.
M2M APPS: What kind of growth do you predict for M2M in the next five years?
RINITA SEN: Globally, the growth of M2M has accelerated compared to what it was about five years ago. I believe the industry has now reached its inflection point, and its growth in the next five years is expected to be rapid. Furthermore, various application areas such as healthcare, consumer electronics, smart grids and intelligent transport systems are expected to drive the growth of M2M. With the advent of 4G, embedded sensors, intelligent gateways, and cloud computing, establishment of M2M solutions are expected to be simplified and accelerated.