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Mobile Operators Reclaiming the Machine-to-Machine Connectivity Market

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The M2M (machine to machine) connectivity market has always seemed to be the playground of specialists mobile virtual network operators (MVNOs) and M2M mobile operators (MMOs). These aggregators, such as Jasper Wireless and Aeris Communications, have garnered most of the limelight in recent years.

But increasingly, mainstream mobile network operators (MNOs) are targeting the M2M market directly and publicly.

"Traditional mobile network operators are raising the visibility of M2M efforts that are already pretty robust," notes ABI Research senior analyst Sam Lucero. "Our informal calculation is that mobile network operators now own 85-90% of the M2M market, and we expect that share to grow, in the context of an overall expanding pie."

Why would MNOs push aggressively into a market that is relatively small and noted for generally modest average revenue per user? The reason, says Lucero, is that, "The core voice/data market is becoming saturated and the operators are looking for new areas that show high growth and, if accessed correctly, can return fairly high margins."

Some MNOs have long offered specialized M2M services. Verizon's partnership with GM's OnStar delivered it the largest single block of M2M connections in North America. Orange and Telefonica in Europe, and NTT DOCOMO in Japan have been active in the field, but now more operators such as AT&T and Vodafone are entering the market directly, developing platforms more specifically geared to the particular needs of M2M. They've already got the infrastructure; if they can automate their provisioning, activation, and management processes, and orient their customer acquisition and support processes to meet the economics of M2M, the rewards can be quite substantial.

Lucero adds, "M2M is just one part of the MNOs' push into new markets. They're also quite publicly saying that they want to have connections into a range of consumer electronics devices."

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