On Tuesday, seven mobile operators announced they had entered into a global alliance to collaborate their M2M businesses. KPN, NTT DOCOMO, Rogers, SingTel, Telefónica, through its Telefónica Digital unit, Telstra and Vimpelcom are all part of this M2M alliance. Most notably, no carrier from the United States, specifically AT&T, has joined the partnership.
According to Jim Morrish, director at Machina Research, the lack of AT&T’s presence is the most significant part of the announcement. “It means that AT&T sees more opportunity in going in alone,” says Morrish.
Although, according to Steve Hilton, lead analyst for Analysys Mason, the fact that a U.S. carrier did not join is not surprising.
“Sprint is currently engaged to France Telecom; Verizon Wireless and Vodafone have been bedfellows a long time; and AT&T seems to want to do it on its own with its current deep global roaming arrangements,” says Hilton. “I think if Deutsche Telekom would sell T-Mobile USA, maybe AT&T would join the Deutsche Telekom, France Telecom, TeliaSonera grouping.”
Despite lacking a U.S. carrier, the partnership between these seven operators does span a large geographical region.
“Most significant is the breadth of players covering Europe in general, Latin America, Japan, Australia, Netherlands, Russia, Singapore,” says Hilton. “If you didn’t think M2M was a global phenomenon before this announcement, hopefully you do afterwards.”
The cooperation of this group of operators is aimed to help address the complex and fragmented nature of the M2M market, according to the group. But according to Hilton, this is more of a semi-global connection than it is a step toward ending a fragmented market.
“It puts together another set of regional and local operators into a semi-global M2M connectivity player,” says Hilton. Other semi-global partnerships include Vodafone and Verizon Wireless; AT&T; Deutsche Telekom, France Telecom, TeliaSonera; and Telenor Connexion.
According to Morrish, the M2M industry will most likely always be fragmented due to the wide range of M2M applications and market-specific constraints.
“However, this development is a significant step towards de-fragmentation of the supply side of the market,” says Morrish. “That said, all of the seven operators are existing Jasper clients, and Jasper has long promoted the benefits of common M2M platforms, so, in many ways, this announcement has been some years in the making.”
Through the Jasper Wireless Control Center, the seven service providers will provide a global product featuring a unique SIM, and a united web interface and centralized management of status and usage of M2M devices globally.
The goal of the alliance is to stimulate the sale of M2M communications across a number of high-potential industries such as consumer electronics, automotive and energy efficiency to enable the development of new business models and the creation of new products and services, says the group. The group also sees a reduction in operational costs for these target industries.
“I would expect that most cost savings will accrue to the M2M clients of these operators although, clearly, the fact that this operator grouping can enable cost savings particularly for international M2M deployments will act as a competitive differentiator,” says Moorish.