Internet companies like VeriSign proved there is money to be made in small transactions. A growing number of mobile operators believe similar opportunity awaits them in machine-to-machine communications. So do companies such as Convergys, which will help operators enable it.
Convergys’ Alastair Hanlon spoke with B/OSS editor Tim McElligott about the emerging opportunity for his company and his customers in the new world of machines. One of the more surprising developments in this space is the leaning of operators, supported by Convergys, toward a separate BSS infrastructure to support the new business model.
The key to this market is the participation of multiple vertical markets such as health care, energy, automotive and security and the opportunity they offer as third-part M2M application providers team with mobile operators to deliver packaged M2M solutions and the support, management and settlement of them.
Hanlon said machine-to-machine is going mainstream and that a number of Convergys’ clients are already expanding their investment in the M2M business model. Here is what else he had to say on:
The New Business Model
"The big difference from the standard subscriber-based telecom business we are all familiar with is that this is really about adding incremental revenue on top of the telco business model, using existing assets as much as possible. But clients are helping us see that this is a very different business in many ways, particularly in how you keep the cost of operations down to a point where it makes sense to host these low-ARPU models.
One example is third parties operating in this space. We have a client in Sweden that is a specialist in M2M communications. They don’t own any network themselves; they buy network capacity from operators around the world and offer M2M apps over that. So for them, connectivity is just one part of the overall package. They package the device, the apps that run on the device and the ongoing maintenance."
Convergys’ Role
"The role we play is to collect all the usage data transmitted from the devices and do settlement with mobile operators and determine pricing for the end business as well. We need to support different pricing models because each app or machine may be different. Part of our specialty has always been customer management and revenue management, so a lot of what we do in M2M is revenue capture and calculation associated with transactions going over the network. M2M is much bigger than that, but that is our special piece: Manage the machine and collect revenue."
