As machine to machine (M2M) applications widen in an increasingly connected society, telecommunication companies are looking to diversify their M2M offerings beyond what can easily become a commoditised connectivity. According to Frost & Sullivan M2M non connectivity revenue to total M2M revenue in Europeamounted to 3.0 per cent in 2010 and 4.2 percent in 2011. This proportion is expected to grow significantly to more than 20 per cent by 2017. Monetising M2M data will be one of the key drivers for such an aggressive growth forecast.
Consumer M2M applications – centered on small/portable consumer electronics devices such as e-readers and digital connected photo-frames – are the closest to telcos’ core capabilities of providing digital lifestyle services. “2012 is expected to be a year when telcos will begin developing consumer M2M opportunities in addition to their current enterprise focus. Companies with a strong consumer brand and deep consumer digital offering could most readily capture this approach,” says Frost & Sullivan Senior Industry Analyst, Yiru Zhong.
Though telcos in Europe are currently pursuing the immediate enterprise M2M opportunities in industries such as utilities, automotive, security/surveillance and healthcare, they do see market potential in consumer electronics due to wide adoption of smart connected devices. “In addition, this trend has a long growth path as more smart or connected devices become available in the future,” notes Yiru Zhong. “There is also increased uptake of consumer-grade industrial devices such as personal home wellbeing/healthcare devices and personal navigation devices.”
Thanks to extended connectivity to these types of services, there will be an accumulation of M2M data about consumer usage. Integrating this data into the telcos overall customer analytics will contribute to service deployments and customer improvements. Furthermore, the telcos attempts at making sense of M2M data will provide a solid foundation for future deployments in a smart-cities context by shaping citizen’s digital lifestyle.
A consumer’s digital footprint provides a context that also helps telcos to further enhance their other consumer offerings, such as mobile advertising and location-based services. Moreover, with the relentless push to deploy contactless payments technology, such as near field communications (NFC), telcos can further solidify their mobile financial service offerings by combining them with consumer M2M applications.
However, telcos will have to address two issues to speed up market development. Firstly, they will need to upgrade their data analytics capabilities and data warehousing integrations. This is already being addressed though, particularly as M2M will also create significant volumes of usable data from a variety of different resources. The second obstacle is a suspicion of big brother society. Europe’s sensitivity to data privacy makes it difficult for the public to distinguish between an identified individual and an anonymous group of customer segment with similar characteristics. Telcos can address this concern by always ensuring customer’s choice and consent.