M2M Alliances Look to the East

Kathryn Weldon
Kathryn Weldon

Summary Bullets:

  • Vodafone announced this week that it was partnering with NTT DOCOMO for M2M opportunities. The Japanese operator is also part of the M2M World Alliance made up of many operators that use the Jasper Wireless service delivery platform.
  •  According to the GSMA, while North American and European together generate 46% of connections, the Asia-Pacific region was responsible for 42% of global M2M connections in 2013 (with China alone generating 27% of global traffic).

A lot of M2M alliance activity centers around Asia-Pacific these days, with NTT DOCOMO, SingTel and Telstra part of the M2M World Alliance and SoftBank the newest member of the Global M2M Alliance founded by Deutsche Telekom, Orange and TeliaSonera. The Bridge Alliance, made up of Asia-Pac mobile operators offering multi-country mobility services, also recently disclosed it was expanding into M2M. Telefonica and China Unicom have been going to market together for M2M since 2011. In addition, Telenor and KDDI announced an M2M partnership last week. Interestingly, some of the largest operators such as Vodafone and AT&T had not formally disclosed M2M partnerships that provide expanded footprint for M2M MNC deals (as well as joint certification and formal escalation processes). However, this week, Vodafone formally expanded its M2M initiatives in Asia-Pac with a deal with NTT DOCOMO.

The GSMA estimates a 55% CAGR from 2010 to 2013 in the Asia-Pac region, the highest global growth rate for M2M. So, aside from the general benefits of global partnerships to draw MNCs, and aside from the general excitement about mobile (and many other technology) opportunities in the Asia-Pac region, what is it about the region that makes it such an important one for M2M? Ironically, one of the reasons for all the alliance activity is the high level of fragmentation in the region, with multiple cellular air standards, geographical barriers (such as large bodies of water between countries), and very different market dynamics in each country.

However, there are a number of factors leading to growth. For example, there are a number of significant government initiatives: M2M is one of the key initiatives of China’s 12th Five-Year (2011-2015) Development Plan. It identified M2M/IoT as an area to be established and measured; in addition, China’s Ministry of Industry and Technology released its specific objectives, investment and roadmap to develop China’s IoT market. In Japan, smart metering has become a priority after the tsunami, with the Tokyo Electric Power Company (TEPCO) stating that it will deploy 17 million devices by 2019 as part of an overall plan to cut $1.3 billion in costs over the next ten years. We expect to see more U.S. and European operators partnering with their peers in the Asia-Pac region for mutual revenue generation.

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