Tele2’s M2M business is just over a year old and has been making waves with a number of high profile announcements. The division’s head discusses what makes them different
Eurocomms.com: What role do you see Tele2 playing in the M2M space?
Rami Avidan: To compete in this space you have to do something different. The M2M division at Tele2 is the only global business unit in Tele2 – that’s a statement that it’s a huge focus for the company. At other operators, M2M business units are much further down in the organizational structure. In my view, they’ve got it wrong.
The industry consists of many different players, verticals and regions. One thing is very clear, the only way to be successful is to have a partner play. In addition, you need to be very clear about what you offer and your positioning.
I like to say that we are the “2” in M2M – we focus on the connectivity. Everything is horizontal and we go to market with partners in a bid to offer the best joined-up solution in the market place.
Of course, it’s not just connectivity that we offer. Value-added services, such as device management, are up to four times more valuable than connectivity so they form part of our offering as well.
You launched just over 12 months ago. Have you missed the boat?
I would argue that the penetration of M2M services is below two percent currently. Yes we’re late, yes it has downsides but we have built the infrastructure and a team that is totally M2M focused.
In comparison, many other operators have legacy set ups. We started from a clean sheet of paper and we’re making huge strides. The deal with the Vattenfall Groupis huge contract that we won in June.
We’re on the boat we’re not the captain.
What's the biggest challenge you've faced since launch?
Creating a start-up in a big organization such as Tele2 is hard. Building a team was hard too, as the most experienced people are not always keen to join but we’ve recruited who we consider the best people.
Looking ahead, it is regulation. Regulators, because they don’t understand M2M, treat it as a broadband solution, selling megabytes. Of course, it’s not that at all and regulators need to really understand this business.
You mentioned the importance of partnerships... what do you look for in a partner?
Overall we have roughly 65 partners that we categorise into three buckets. First, are what we call business partners – very often local system integrators, VARs and distributors such as Sim Services in Holland.
Second, we have technical partners, such as Jasper Wireless, from whom we look for modules and surrounding solutions that enable customers to do more with their devices.
Third, we have what we call MIVA (M2M IoT Vertical Alliances). Customers want an end-to-end solution but if you take all the M2M verticals, 70 percent of the hardware and connectivity is identical with the remaining 30 percent being customizable. To ensure the 30 percent that we offer is the world-class, we’ve created MIVAs. They are either global, such as Wipro in industrial automation and HCL in Healthcare, or regional, such as Cybercom Group in healthcare in the Nordics.
Ultimately, we want to go with the best partners – it’s about quality not quantity.
You have not joined any of the big M2M operator alliances – why do you think you can succeed without them?
We wanted to get our toes wet first and understand how our offering was received. I fear that those alliances are just vapour that don’t deliver value for customers. For example, they don’t equal better prices.
In terms of footprint, we already cover the geography that we need through our own existing agreements in 98 percent of the deals we enter into.
Where they would make sense is in improving support between networks but they haven’t done it yet as it’s technically hard to achieve. So, we’re still investigating joining as well as setting up our own.