Oct 15, 2010

M2M - the wireless business model

At the end of 2009, the wireless industry reports more than 90% cell phone penetration. Approaching saturation for voice services on mobile networks, which supported the spectacular wireless expansion, the rich source of business and has reached a plateau; voice-based income is falling rapidly. Now, this forces the operators to explore new growth options. Where can new revenue come from? Is there an area replete width growth potential waiting to be tapped?

Machine-to-Machine communications is now viewed as such a frontier.

M2M consists of using a device (e.g., sensor, meter, etc.) to capture an "event" (e.g., temperature, inventory level, location, environment status, etc), relayed through a network (e.g., wireless, wired or hybrid) to an application (software program), translating the captured event into meaningful information (there is a breach, vending machine is empty, tank level is low, etc). This is a technology that is pervasive and invades all kinds of venues throughout our daily lives.

The Negroponte Switch announced a new era in telecommunications. It is called "M2M Switch".

The ABCs of the mobile carier business model is that
A): ARPU --- Average Revenue per Unit
B): Bandwidth --- consumption per unit is high
C): Churn --- the turnover of subscriber accounts is high
There are indicators of a competitive market that favors network business expansion. M2M flips this model on its head: in the M2M market, ARPU is low, Bandwidth used is low, and the Churn is low.

According to data collected by research firm Strategy Analytics, wireless carries posted blened ARPU ranging from $37.61 to $52.71. Regarding bandwidth, average data consumption of smartphone from 90MB to 298MB per month. Finally, monthly churn ranged from 1.27% to 5.0%.

In comparison, the M2M market, deals with different numbers. Depending on the application, ARPU is in the single digit range. The need for bandwidth access is limited as "bread and butter" exception-based M"M solutions use only tens of kilobytes. Finally, churn, as an order of magnitude, is much lower than what is traditionally observed in the cellular market.

M2M is all about new service opportunities. It is service providers - both traditional and "new age" - who hold the key to the future growth of M2M. Remote healthcare, for example, is a huge market that can be addressed by M"M technologies and for which the ABCs need to be complemented by a thorough knowledge of the value chain - including specific enviromental conditions such as laws and regulations.

参考:http://telecomengine.com/search/article.asp?HH_ID=AR_6561

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