Study forecasts wireless M2M explosion

Cellular-based wireless M2M (machine-to-machine) communication is set to create huge new market opportunities for data services worth an estimated Eur 40 billion per annum in Western Europe alone.

Cellular-based wireless M2M (machine-to-machine) communication is set to create huge new market opportunities for data services worth an estimated Eur 40 billion per annum in Western Europe alone by 2007, according to a new study by network services consultants e-principles.

This will provide many new opportunities for IT hardware and software vendors, service providers and network operators.

Wireless M2M devices, using a variety of technologies led by GSM/GPRS/UMTS, TETRA, WLAN, Bluetooth and RFID (radio frequency identification), will soon reach the market in unprecedented numbers as prices fall, applications mature and the economic benefits become recognised.

The study estimates that GSM/GPRS/UMTS-based cellular devices alone will reach a population of 35 to 40 million in Europe by 2004, then growing rapidly to nearly 400 million by 2009 and continuing to grow rapidly thereafter.

By then there will be more machines talking to other machines over cellular networks than mobile phones, PDAs and smartphones combined.

"M2M is like the Cinderella of the wireless data market", says Robin Duke-Woolley, Director of e-principles.

"Constantly overlooked yet the potential is enormous.

The growth of wireless M2M revenue will be both inevitable and relentless.

Whether movement is involved or not, wherever there is a need for monitoring, controlling, displaying or transacting remotely, wireless machine communication now brings clear cost and time benefits".

As part of the study, e-principles examined 12 major groups of applications, each of which has its own key characteristics and growth prospects.

In each of these, cellular networks facilitate the rapid and flexible installation of remote sensors, displays and control devices while keeping installation costs low.

Each of these devices then delivers its own piece of the overall information and control picture to enterprise and service centre systems.

"Efficiently collecting, storing and dealing with this rapidly growing amount of data is becoming more and more important.

Increasingly, it will have a direct impact on competitive advantage and service enlargement", says Duke-Woolley.

Wireless M2M encompasses telematics, telemetry and many other applications.

As such it is a diverse set of applications with different infrastructure and support requirements.

While this introduces complexity and the need to operate with partners, it dramatically opens up the opportunities to a wider set of players.

So on one hand, GSM/GPRS use in intelligent transport systems (ITS) is set to increase substantially in applications ranging from road payment systems to speed sensors, traffic light control/ monitoring and even bus displays as it becomes increasingly important politically to improve public transport services and reduce road congestion.

On another, it is set to transform the vending machine business.

There are challenges in achieving these numbers, however.

For example, most mobile operators do not yet recognise the extent of the opportunity that M2M offers.

"Data tariffs are generally organised with personal data users and high data throughput in mind to improve ARPU (average revenue per user).

However, that type of business is much less certain at present.

In contrast, most M2M applications require only low data rates, at regular intervals but implemented in large numbers.

For GPRS, which robs circuit-oriented voice capacity to provide packet-oriented data capacity, this is actually ideal - steady revenue with low capacity utilisation", explains Duke-Woolley.

These and other significant findings of the study are to be published in a new report, entitled "Wireless M2M communications: exploiting the revenue opportunities in Europe", priced at GBP 1950 (Eur 3095).

(This was Electronicstalk's Top Story on 12 September 2002).

(This was Electronicstalk's Top Story on 12 September 2002).

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