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Well? Is It an M2M World Yet?

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Naomi WeiserBy Naomi Weiser

If you’re a mobile operator, who wouldn’t be interested in a revenue opportunity of $1.2 trillion? (I know I would be.) Well, back in 2011, that’s the amount that the GSMA predicted the machine-to-machine (M2M) market would be worth by 2020. So, at the close of 2013, how are we actually doing when it comes to M2M? According to BaseN VP Anders Viden today at TM Forum’s Digital Disruption conference, we’ve already gone past the tipping point.

“M2M has started, it’s on its way," said Viden. “It’s not going to wait and ask us for permission."

And you don’t have to look too far to find the evidence: Connected cars (GM and AT&T), connected health care (Deutsche Telekom), home automation and security (Comcast, Verizon, AT&T) are all M2M markets with major operators playing a role.

Panelists at TM Forum's Digital Disruption event in San Jose, Calif., discuss the incredible M2M opportunity for mobile operators in the years ahead.Smart Mocha CEO Surj Patel thinks we’ll “see a real explosion" when operator business models start to align with the needs of M2M. “Right now," said Patel, “the business models and KPIs that telcos currently have are holding them back in this new market."

He gave ARPU (average revenue per user) as an example of a KPI that needs to be adjusted across different verticals, explaining that when you compare ARPU levels in the M2M market to communication markets, they’ll probably be lower and operators “don’t want to go down" when it comes to revenue.

He also highlighted another issue around the fact that we’re “cobbling together technologies and the business models primarily designed for human use and not machines." He cited an example of simple TCP/IP sockets: Safety-critical apps relating to health care or security need assured delivery, very low latency and a highly dependable service, but many TCP/IP sockets aren’t designed to support this level of performance.

But Patel says he’s noticing that major American carriers are starting to change their business processes towards M2M in areas like pricing, device management and network services, and he finds this heartening:

“Operators are starting to learn more and become aware about what the M2M business is doing. Telecoms is like a giant oil tanker – it takes time to turn but once it changes direction, it will be pretty unstoppable."

Naomi Weiser is the editor of the Amdocs Voices blog and is blogging live from TM Forum’s Digital Disruption event in San Jose, Calif.

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