Europe M2M revenues to grow by 33% to 2016: Frost & Sullivan

With Europe at the forefront of the M2M revolution, revenues from M2M services are expected to grow at a compound annual rate of 33% between 2011 and 2016 in a selection of European markets, including Germany, France, Poland, Russia, Sweden and the UK.

Such is the finding of new research from Frost & Sullivan, which reckons the number of SIM connections will rise to 75 million in 2016, with the UK emerging as the biggest market and Germany a close second.

With Europe at the forefront of the M2M revolution, revenues from M2M services are expected to grow at a compound annual rate of 33% between 2011 and 2016 in a selection of European markets, including Germany, France, Poland, Russia, Sweden and the UK.

Such is the finding of new research from Frost & Sullivan, which reckons the number of SIM connections will rise to 75 million in 2016, with the UK emerging as the biggest market and Germany a close second.

The market-research company says that Europe’s mobile network operators are now looking to expand their M2M portfolios to profit from applications rather than just connectivity.

“The largest driver for M2M telecom service providers has been relying on their core connectivity expertise,” said Saverio Romeo, a telecommunications and connected public sector industry manager at Frost & Sullivan.

“Besides tapping into immediate M2M application areas where legislation is a driver for adoption – such as eCall for connected cars in Europe and in smart meters – M2M telcos are also increasingly positioned for the wave of M2M functions that are dictated by business objectives,” said Romeo.

As operators ‘fine tune’ their market strategies, the next wave of profitable growth is likely to come from M2M applications in the areas of healthcare, industrial automation and consumer electronics.

According to the research, there will also be demand for security and remote surveillance, retail and other process automation applications.

While growth is unlikely to happen unless consumers are better educated about the need for M2M services, Frost & Sullivan believes that take-up will ultimately be driven by the shift towards “smart communities”.

“In the midst of market evolution towards a smart community future, a successful M2M telco is one that is best positioned to rapidly move beyond connectivity offers, capture a larger proportion of M2M-related revenue, develop a smart community marketplace, and do so with the most cost-efficient route to market,” said Yiru Zhong, an M2M and ICT in smart utilities industry manager at Frost & Sullivan.

The market-research company advises operators to build partnerships with other companies in the M2M value chain and differentiate their offerings by simplifying the deployment and operation of M2M projects.