Trends Report

M2M Connectivity Helps Telcos Offset Declining Traditional Services

But They Are Poorly Positioned For The Larger Value-Added Service Opportunity

November 22nd, 2011
With contributors:
Christopher Mines , Sarah Musto , Jamie Warner

Summary

Telcos face increasing pressure on traditional voice revenues and seek new revenues from services leveraging existing assets. Machine-to-machine (M2M) technologies, including radio frequency identification (RFID) tags, ZigBee sensors, and actuators, have been available for more than a decade. Lower device costs, IP network deployment, and opportunities to improve business operations in many vertical markets are driving telecom service provider investment in M2M technologies to capture new revenues from M2M service deployments. In 2016, Forrester forecasts approximately 450 million connected M2M devices globally will generate nearly $17 billion in connectivity revenues, growing at a 34% compound annual growth rate (CAGR) between 2010 and 2016. To capture these M2M revenues, telecom providers must sharpen their vertical market focus; make changes in their strategic, billing, and operational activities; and expand partnerships. However, connectivity revenues alone will not fill the gap left by declining revenues from legacy telecom services. Long-term success requires telcos to capture value-added service revenues beyond M2M connectivity.

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