Study: Vodafone positioned to take lead in global M2M market

M2M research firm Machina Research on Wednesday revealed the results of its 2012 M2M Benchmarking Study, which found that Vodafone was the communications service provider (CSP) best placed to take advantage of the machine-to-machine communication market in the future. According the firms earlier research, there will be 12 million connected devices by 2020, generating revenue of $919 billion.

Vodafone’s global reach is what gives it a substantial competitive advantage over other CSPs, says Machina Research (London).

 “While I wouldn’t say that they are streets ahead of the competition, Vodafone was our clear winner,” says Matt Hatton, the study’s author. “However, the race for second spot was very hotly contested between AT&T, Deutsche Telekom, Orange, Telenor and Verizon, with little to choose between them. Each has strengths and weaknesses“.

Ultimately second place went to Deutsche Telekom (Bonn, Germany) which was praised for its partnership strategy.  According to the report, Deutsche Telekom has an advantage in the M2M world with an in-house systems integrator in T-Systems, has good geographical coverage courtesy of last year’s alliances with Orange and Telia Sonera and its U.S. presence, plus the group is focusing a lot of attention on building up M2M capability.

The aim of the study is to identify which CSPs are set to prosper in the future, rather than simply identify those which are succeeding today, according to Machina Research.

 AT&T (Dallas, Texas, USA) and Verizon (New York) currently have M2M installed bases significantly bigger than Vodafone, 12 million and 9 million respectively.

“It is important to note that Machina Research’s ranking is forward-looking. It’s an indicator of who we believe is best set for future success,” says Hatton  “Of course we take account of historic experience and success by AT&T, Telenor, Verizon and the like in our “Pedigree” category, but it is only one element in this most nascent of markets.”

The M2M research firm rated M2M CSPs in six key areas: Pedigree, Platform, Place, Partnerships, Process and People, to predict which CSP would prosper in M2M in the future.

Vodafone’s (London) future success will owe much to its scale and geographical coverage, according to the report. By 2020 Vodafone’s footprint will cover 600 million addressable cellular M2M connections, second only to Deutsche Telekom, courtesy of its continuing presence in the U.S. The Vodafone figure grows to 1.8 billion when we include partner operators such as Verizon Wireless, whereas the comparable figure for DT is just 1.1 billion. As a result, Vodafone achieves comfortably the highest ranking in the “Place” category.

 “None of the CSPs has a monopoly on best practice in all of the categories. Each has room for improvement,” says Hatton.  “Each also has particular advantages due to their company structure or approach that can give them a lead or allow them to differentiate. Above all, however, each of them can learn from the others.”


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