Long-time rivals Deutsche Telekom (Bonn, Germany) and France Telecom-Orange (Paris) announced on February 11 that they will cooperate on M2M operations and service development . Both will participate in the M2M Zone Conference at CeBIT.
Specifically, the agreement calls for the two companies to work together to compress supply-chains, jointly develop M2M solutions, simplify module certification and stimulate new applications. Questions remain as to how will this agreement be implemented, and importantly, how it might affect the M2M sector as a whole, but the move is no doubt unprecedented.
Says Juergen Hase, VP of Telekom’s M2M Competence Center, “The cooperation with Orange will allow both companies to offer enhanced services to our customers, to bring new applications faster into daily life and to decrease certification cost and time.”
The companies named specific M2M as one technology field for future cooperation. Others are WiFi, home media servers, e-Health services, connected cars and in-car infotainment services, and content and technology for TV and video services. In all cases, synergy and cross-border standards will be a primary focus. The M2M agreement, which initially covers France, Germany, Belgium and Luxembourg, aims to include all mobile network operators affiliated to the two groups and other carriers as well.
Steve Hilton, Principal Analyst at Analysys Mason, is calling this partnership a "huge step forward in encouraging multi-national implementations of M2M solutions." "From this initial partnership we will see co-development in tariffing, roaming, joint sales efforts and eventually solution development." Hilton said. "Deutsche Telekom and France Telecom have strong M2M resources and while the first implementation of this partnership is focused on northern Europe, we believe the opportunities are virtually endless."
According to a recent Analysys Mason forecast, worldwide M2M device connections are slated to grow from 62 million devices in 2010 to 2.1 billion by 2020. But Telekom’s Hase argues for cautious optimism, saying, “Volume is still the issue. We need to drive costs for the SIM chip down to almost zero, while connecting billions of devices to make up for low margins on volume.”
Georg Steimel, Chairman of the M2M Alliance, also weighed in. "This announcement shows two things," Steimel said, "the M2M business is more and more a global business and needs global propositions and services especially for mass deployments by OEMs in CE, automotive, energy and healthcare. Such a partnership could and must also--together with other partners--accelerate the highly needed standardization in these areas."