M2M fuelling mobile connections growth in US: GSMA

Rising interest in M2M services is driving the growth in mobile connections being reported by operators in the US, according to new research from the GSM Association (GSMA).

The industry body, which represents telecoms operators around the world, says that both MVNO and M2M services are playing a crucial role in boosting quarterly connection gains in the US and helping to offset the slowdown in traditional activities.

Rising interest in M2M services is driving the growth in mobile connections being reported by operators in the US, according to new research from the GSM Association (GSMA).

The industry body, which represents telecoms operators around the world, says that both MVNO and M2M services are playing a crucial role in boosting quarterly connection gains in the US and helping to offset the slowdown in traditional activities.

The GSMA says the sum of MVNO and M2M connections reported by six of the largest US operators – AT&T (Dallas, TX, USA), T-Mobile (Bellevue, WA, USA), Sprint (Overland Park, KS, USA), US Cellular (Chicago, IL, USA), Clearwire (Bellevue, WA, USA) and Verizon Wireless (New York City, NY, USA) – grew by nearly 30 million between the second quarter of 2010 and the second quarter of 2013 to reach almost 70 million.

Its report goes on to say that M2M services are becoming an important source of growth for mobile operators, referring to a recent comment by Michael Stefanski, senior vice president at Verizon Wireless, to support the finding.

“We’re gaining a lot of momentum around M2M and that is driving incremental revenue, albeit very low individual unit per subscriber type revenues,” said Stefanski. “But, again, as we start to gain momentum and sell hundreds and hundreds of thousands of these types of devices, that’s going to contribute to those revenues and contribute to the overall growth of wireless.”

According to the GSMA, M2M accounted for about half of wholesale connections at AT&T, Sprint and T-Mobile US in the second quarter of this year, having grown its share of connections by four percentage points year on year.

AT&T, in particular, has focused on M2M as a key growth opportunity, with chief executive Ralph de La Vega noting that “gains in connected devices more than offset losses in the reseller segment” and indicating that AT&T plans to further monetize M2M through applications including home security, automation and connected cars.

The operator has been especially active in the automotive market, notes the GSMA, signing a deal with General Motors (Detroit, MI, USA) in February to provide wireless connectivity in US vehicles from 2014 and forming a partnership with radio broadcaster Sirius (New York City, NY, USA) to sell connectivity services to Nissan (Yokohama, Japan) in North America.