If mobile network operators (MNOs) feared becoming dumb pipes, they may want to relax. That’s because, as more devices become connected to the Internet, gear-makers want little to do with the installation, billing, marketing and support. We’re talking machine-to-machine (M2M) initiatives such as in-car Wi-Fi and telematics, or monitoring a home’s energy usage through a Web-enabled meter. And the companies that develop those technologies want to keep their focus on innovation while someone else handles the provisioning. For MNOs, that’s a chance to make the most of their networks.
Consulting firm Accenture and the GSM Association (GSMA) this week at Mobile World Congress in Barcelona released a report on demand for embedded wireless technologies and what operators can do to capitalize on the trend. Part of the survey showed MNOs are keenly aware of the embedded wireless push – 89 percent of MNO respondents believe embedded wireless networking technology is critical to their competitive future, Accenture and GSMA found.
The opportunity has been in providers’ periphery for a while, though — it’s not totally new. For example, last May, AT&T Inc. (T) signed an exclusive contract with Jasper Wireless to support embedded wireless strategy. Jasper does the activation, billing and connectivity work for all of the consumer and M2M embedded wireless devices that connect to AT&T’s network. And Sprint Nextel Corp. (S) CEO Dan Hesse has talked for some time about letting companies use its wireless networks for M2M. However, Sprint apparently is not interested in handling the billing and customer service for all customer companies’ devices. That was reported to be the case for pending deals with GPS maker Garmin, photo firm Kodak and memory storage firm SanDisk.
If Sprint and its peers overlook the back-office end, they could miss out on the revenue altogether. Accenture and GSMA said 61 percent of the embedded wireless-device manufacturers who responded to handle the technical and commercial aspects. That includes billing, device diagnostics, integration with mobile voice, field support, pricing plans and marketing.
“The global potential for connected devices is huge — it’s more than just mobile phones and laptop PCs,” said Alex Sinclair, chief technology and strategy officer at the GSMA, in a prepared statement. “We expect to see up to 50 billion connected devices over the next 15 years, finally making the prospect of a truly connected lifestyle a reality.”
Before that happens, though, MNOs and the embedded wireless community will have to resolve some issues.
One unidentified MNO told Accenture and GSMA convincing providers to take on the administrative tasks for embedded wireless projects will prove challenging. Moving to new business models is hard, the person said, because different thinking is required from multiple parties. Everyone wants to make money but no one wants to assume the risk, the person said. Another unnamed MNO said the embedded wireless industry doesn’t yet have clear standards that would allow factions to develop interoperable systems. A lack of standards weighs down R&D costs, the person said.
For its part, the GSMA at Mobile World Congress on Feb. 15 did unveil guidelines it hopes will reduce design complexity and fragmentation. The recommendations show the mobile industry how to work with the consumer electronics, healthcare, automotive and utilities sectors to address their specific embedded wireless plans. If MNOs can figure out how to make the most of embedded wireless, they’ll find themselves swept up in the next wave of mobile growth, Accenture and GSMA executives said. And MNOs will help reduce health care costs, lower carbon emissions and improve energy efficiency along the way, they said.
