Mobile operators told: Forget man, here comes machine

For mobile operators looking to increase the amount of data carried over their networks, the machine to machine (M2M) telemetry market could well prove a boon.

As much as 10 per cent of operators' revenues will come from M2M communications by 2007, according to Robin Duke-Woolley, director at network services consultancy e-principles, which has just released a major report on the subject.

Such a high figure is likely to raise some eyebrows, with many commentators having poured scorn on recent investments in mobile infrastructure.

Duke-Woolley told silicon.com: "This figure is substantial, it's inevitable and it will increase. But I stress it won't happen tomorrow and it won't be operators' main business."

Until now, the spotlight has fallen on person-to-person communications, such as voice calls or most SMS text messages, and person to machine calls, for example browsing WAP pages or dialling in to corporate servers. However, the M2M market already has some interesting examples.

Pan-European operator Orange identifies three main categories of M2M applications: alarms (including security and breakdown), resource managing (for stock control and navigation and so on) and billing. Duke-Woolley said Orange has several customers using M2M billing applications and is even trialling systems whereby domestic meters are connected to a master line via Bluetooth, allowing all utilities to be measured at the same time.

He also points out the value of wireless M2M for alarm systems. He added: "Many police forces now won't investigate alarm calls unless a second system is triggered and that will increasingly be [over] wireless. And take [the burglary of] Princess Diana's mother recently - the first thing the thieves did was to cut the alarm wires in her home."

However, perhaps the biggest use of M2M will be in and around motor vehicles.

A new report by Frost & Sullivan forecasts the European commercial vehicle telematics market will be worth E4.7bn by 2009 and this market will increasingly rely on cellular communications.

There are major European initiatives calling for less congestion of roads and automatic tolling will play its part in traffic reduction. Duke-Woolley says a scheme in Germany, currently for HGV lorries, highlights one way forward. DaimlerChrysler and Debis, a joint venture between the car manufacturer and Deutsche Telekom, use a GSM transceiver and GPS location technology in vehicles which connect to the telco's T-Mobile network to pass on billing information.

"This minimises the need to build new infrastructure," said Duke-Woolley. "It's just one area in one country but it will be applicable to other places with no toll infrastructure such as Holland and the UK."

Operators will get a percentage of the tolls electronically collected, in this case eventually something like 15 to 20 per cent of E3bn per year in revenue.

What do you think? Will such things as M2M allow operators to rake in enough extra revenue to cover their 3G investments? Let us know by posting a Reader Comment.

The e-principles report, 'Wireless M2M Communications: Exploiting the Revenue Opportunities in Europe', costs £1,650/$2,600 for hard copy. Further details and PDF pricing available at www.e-principles.com/m2m_study.htm .