The growing Internet of Things: M2M driving wholesale revenues
18 October 2011 | Judy Reed Smith
M2M revenues are starting to generate meaningful wholesale revenues.
Wholesale wireless (and wireless-driven wholesale) is delivering welcome revenue streams to wholesale carriers. According to Wired and Wireless Sizing and Share 2011–16, the latest edition of Atlantic-ACM’s Stateside sizing and opportunity study, wireless resale revenues will grow at a compound annual growth rate of 20.4% from 2010 through 2016.
A significant driver of this growth comes from business telecoms service providers that do not have wireless assets of their own, but are seeking high-value bundles. However, drilling deeper into wireless resale revenues, machine-to-machine (M2M) revenues, as the “Internet of Things” is starting to generate meaningful wholesale revenues.
For the Big Four stateside providers – Verizon, AT&T, Sprint and T-Mobile – M2M revenues will reach $1.6 billion by 2016. Currently, AT&T holds a 42% share, followed by Verizon at 32%, T-Mobile at 13% and Sprint, which is just gearing up for M2M, following the pack with 8%.
We predict that over the next five years AT&T will grow its share to 40%, Verizon will close the gap to also control 40%, and the rest will fall to Sprint and T-Mobile.
Sprint holds the potential to beat its forecast, however, as early this year the company announced the establishment of a centre for partnership standards and connection testing. Contracts established through this centre may start small and are likely to grow, and may position Sprint in the right place to capitalise on a “next big device” event. AT&T and Verizon will not sit by the sidelines of course.
Within the enabling industry, many other partnerships are forming, such as the relationship between Verizon and Sierra Wireless. AT&T announced a partnership with cloud-based Axeda and also has partnerships with ILS Technology’s deviceWISE M2M Application Platform and SensorLogic’s cloud-based service delivery platform for location-aware tracking. All providers will seek a wide array of alliances as M2M takes off and carriers pursue more vertically driven solutions.
This Internet of Things is just beginning, with small margins but the potential for many billions of connected devices and paying events. It represents a set of changes that can make businesses more efficient, consumers more secure, the environment less taxed and wholesale carrier departments better funded.
Judy Reed Smith is CEO of Atlantic-ACM. She can be contacted at: firstname.lastname@example.org
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