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Reader Forum: New business models to maximize M2M revenues for carriers

Editor’s Note: Welcome to our weekly Reader Forum section. In an attempt to broaden our interaction with our readers we have created this forum for those with something meaningful to say to the wireless industry. We want to keep this as open as possible, but we maintain some editorial control to keep it free of commercials or attacks. Please send along submissions for this section to our editors at: dmeyer@rcrwireless.com.

Digital lifestyles have created a fundamental shift in the way we live. Earlier our expectations from automobiles were standard amenities like AC’s and music systems but now we look for how well our automobile is connected to enable music and video downloads, identify points of interest, and vehicle to ehicle communication. Soon our retail experience will change; we will stand in front of a kiosk, get a picture taken of ourselves and try on various dresses virtually before making a payment using our smartphones.

Digital lifestyles increasingly rely on communications between machines, or machine-to-machine communication. Several industries like automotive, utilities, healthcare, and agriculture are adopting M2M solutions to reduce operational costs, improve productivity and enhance customer experience. A recent Machina Research report predicts that M2M revenues will grow to more than $750 billion by 2020 with the United States and China being the biggest adopters.

Communication service providers will play a pivotal role in the delivery of M2M services as they provide connectivity for M2M solutions. Forrester Research predicts that by 2016, global connectivity revenues will account for $17 billion; however during the same period fixed line and voice revenue erosion will be $116 billion between 2010 and 2016.

To bridge this revenue gap CSPs are moving beyond providing just connectivity services and adopting new business models to become M2M solution providers, M2M managed service providers, and providing cross industry analytics thereby moving up the value chain. As they change their existing business models CSP’s should also define which industry segments they will pursue as they may not have the necessary domain expertise to address all industry segments.

As industries intersect e.g. energy and automotive, mobile and finance, etc., CSPs could extend their OSS/BSS capabilities to support more communication enabled industries. A few examples include:

–Extend billing for utilities: Smart metering will enable utilities to charge their consumers for energy consumption based on the time of day usage, which would require real-time charging capabilities to be developed by the utilities. Telecom billing systems have traditionally been offering these functionalities as these were always the requirements of the telecoms industry and these very capabilities could be extended to support other industries like utilities.

–Remote management of devices: M2M will lead to an explosion of connected devices; Berg Insight expects that the number of connected devices will reach 360 million. The M2M service provider would not only have to ensure that the devices are working properly and are transmitting accurate data for example in healthcare applications but also they must ensure that the device is not transmitting unwarranted data which can cause mayhem on the network. It thus becomes imperative that M2M service providers must have the capability to both monitor and manage devices remotely. CSPs have been managing remote devices and equipment as part of their service assurance portfolio and here again they can extend these capabilities to support cross industry devices.

–Content delivery: Digital signage, music and video downloads for the connected car and smart device applications for doctors are industry trends that will boom in the next few years. For each of these services to be successfully delivered real time policy and charging and robust content delivery platforms to ensure superior service experience to the end users. Content management and its seamless delivery are areas where Telco’s have developed deep expertise and platforms which can be offered to all industries.

–Communication management for M2M devices: Fault detection and management of M2M services is a huge challenge faced by communication enabled industries as the problem could be either with the device or the network and the exact case cannot be ascertained without a field visit. With a plethora of smart meters the utilities will need to quickly resolve errors. CSP’s can build intelligence into the smart devices which captures data like signal strength, hub ID, etc., and transfer that to a central server. This data can be analyzed to improve coverage, and help shift from a reactive to predictive mode of delivering service operations. This could dramatically improve NOC efficiency and customer experience.

Machina Research predicts the emergence of CSP alliances, which will take the lead in delivering end to end M2M solutions. CSPs hold a key position in the M2M ecosystem and already work with partners in this ecosystem – chipset vendors, module providers, application software vendors, M2M platform vendors and systems integrators. CSPs are also favorably positioned to support industries since they understand specific nuances like the importance of regulatory compliances and the ramifications of not adhering to the regulatory compliances which is similar to industries like healthcare and utilities that are also extremely regulated. They are also at the core of connected transport initiatives along with vehicle manufacturers and telemetry providers. They could also offer ambient assisted living solutions like personal wearable healthcare devices with location based tracking for the impaired, e.g. those with Alzheimer’s disease.

CSPs can leverage their network operations center expertise to establish similar service operation centers for various industry solutions and device manufacturers. CSP SOC could help M2M service providers improve self-care capabilities, knowledge management and more extensive use of smart analytic tools to create a more predictive service assurance support model.

CSPs have access to M2M specific data and are best positioned to perform analytics on data from different industry solutions providing CSPs the ability to create more meaningful cross industry value added services. For example, if a CSP supports both remote health and fleet management solutions, in case of an emergency an ambulance can be equipped to reach a patient if it is provided with a combined knowledge of both real-time traffic analysis and patient updates using data from the remote health and fleet management solutions. Similarly in the retail sector the CSP know the subscribers location, while the retailers understand consumer’s purchase trends and buying preferences, integrating this data will enable a more targeted advertising mechanism either through subscriber handsets or digital signage solutions. In order to provide such services CSPs will need to forge relationships with some of the leading business intelligence and big data solution providers.

As CSPs adopt these new business models the focus on measuring KPIs for order to cash and trouble to resolve will be taken for granted and the emphasis will shift to business outcomes like carbon footprint reduction using smart meters, improvement in lifespan or health through remote healthcare and reduction in fuel for transportation.

ABOUT AUTHOR

Martha DeGrasse
Martha DeGrassehttp://www.nbreports.com
Martha DeGrasse is the publisher of Network Builder Reports (nbreports.com). At RCR, Martha authored more than 20 in-depth feature reports and more than 2,400 news articles. She also created the Mobile Minute and the 5 Things to Know Today series. Prior to joining RCR Wireless News, Martha produced business and technology news for CNN and Dow Jones in New York and managed the online editorial group at Hoover’s Online before taking a number of years off to be at home when her children were young. Martha is the board president of Austin's Trinity Center and is a member of the Women's Wireless Leadership Forum.