AT&T looks set to maintain its leadership position in the US market for cellular M2M connections over the next five years, despite indicating it will shut down its 2G network by 2017, according to a new study from ABI Research.
“Several factors contribute to AT&T’s [Dallas, TX, USA] current and expected leadership position in M2M connections,” said Dan Shey, a practice director with ABI Research. “First it has a dominant position in certain verticals that are expected to grow, several of which prefer GSM because of its worldwide presence. Second, it has built competencies in M2M services further up the stack, which expand its appeal to a broader set of customers.”
“Finally, as demonstrated by its recent win of the GM [Detroit, MI, USA] OnStar contract, it’s doing a better job selling a vision for key market segments which is exciting OEMs and businesses,” he added.
In February, General Motors was reported to have ditched a long-term connectivity arrangement with Verizon Wireless (New York City, NY, USA) and chosen AT&T to provide services for its 2015 car models, set to go on sale in mid-2014.
ABI Research notes that 2G technology is still the dominant force in M2M, and will continue to be strong over the next five years, allowing Verizon, Sprint (Overland Park, KS, USA) and T-Mobile (Bellevue, WA, USA) to attract customers from AT&T keen to remain on 2G networks.
But it also reckons the use of 2G represents a dilemma for AT&T’s rivals.
“Verizon and Sprint will take all the 2G business they can get but their goal is to move 2G customers to 3G and 4G technologies,” said Shey. “The dilemma is how to move dedicated 2G customers to 3G and 4G connections.”
T-Mobile looks keenest on attracting 2G business and seems likely to experience the highest growth in connections, says ABI Research, but the operator is less focused on providing end-to-end M2M services than some rivals, limiting its future revenue opportunities in this area.