Operators are at risk of missing out on billions of dollars of M2M revenues by failing to invest intelligently in the technology, according to a new report from Ovum.
Network providers could face losing out on an estimated $252 billion (€192 billion) that the researchers predict the M2M market will pull in between now and 2019.
Five “key models” were outlined in the report regarding how operators can ensure they reap the dividends. Ovum estimates operators will have sales of $25 billion (€19 billion) within a wider M2M market worth $66 billion (€50 billion) by 2019.
For example, rather than focusing on management connectivity and network-level data transport, operators should instead took into creating bespoke end-to-end solutions with individual partners, or work with M2M specialists.
Jamie Moss, senior analyst at Ovum, said: “Over the past few years, as the hype around Internet of Things has taken off – driven by some wildly exaggerated forecasts – we’ve seen operators take a gentle approach to M2M. Staying within their main expertise, most have taken on management of the connectivity layer, yet as conventional wisdom tells us, only minor returns will be made here.”
“Instead, operators need to leverage their other capabilities, namely their ability to aggregate large amounts of data around their customers. We’re seeing device and application management become the new focus in M2M, and the ability to collect vast amounts of data will be of considerable value.”
Ovum predicted global M2M connections to grow 162 percent by 2019 to reach 530 million, with Asia and Oceania having the most connections at more than 200 million.
In August, a report from Berg Insight concluded that devices using 3G and 4G connections would double in the next five years and “dominate” the M2M landscape by 2018.
Berg’s findings bore similarities to another report by Ericsson in June, which predicted that the number of M2M communications would quadruple within five years.
“M2M is a market with unique dynamics, where the aim of the operator is to become embedded in the long-term business strategy of the enterprise, not to simply be their current service provider,” said Moss.
“In order for the M2M market to realise its potential, operators must educate enterprises in the utility that connectivity brings."