LIVE FROM GSMA MOBILE 360 NORTH AMERICA: A new report from the GSMA hails the United States as one of the most advanced machine-to-machine (M2M) markets in the world, but the industry association warns the sector must address a number of major challenges in order to fulfil its potential.
Citing GSMA Intelligence data, the report claims M2M represents one in 10 of all mobile connections in the region, compared with one in 20 in Europe and one in 100 in Africa. The US accounted for 35 million connections or 19 per cent of all global M2M connections at the end of 2013 (second only to China’s 50 million connections), a figure that is expected to reach 41 million this year, driven in particular by advances in the automotive, utilities and oil and gas sectors.
However, the report suggests that the US’ share of the global M2M market will fall slightly this year. With 244 million global M2M connections forecast by GSMA Intelligence this year, this would see the US’ share fall from 19 per cent at the end of 2013 to 17 per cent by the end of 2014.
The report notes that the market currently lacks standardisation, “which limits interoperability, causes fragmentation and restricts economies of scale, as well as the rate of growth.” Other issues that need to be addressed include “relatively little co-operation between the private and public sectors in many parts of the economy,” while in sectors such as healthcare “there is a lack of regulatory clarity.”
In a press release announcing the report, Alex Sinclair, Chief Technology Officer, GSMA, praised the country’s “far-sighted approach to M2M technology, particularly with innovative services in the Connected Car and Connected Home spaces,” but warned: “Without common, interoperable standards and appropriate regulation, the US market cannot reach its full potential.”
Despite the challenges ahead, the report is upbeat on the market’s prospects. The US was one of the first countries in the world to deploy connected cars (General Motors’ OnStar service was first launched in 1996 and has progressed to its ninth generation of hardware) and the country now enjoys a global lead in terms of adoption of M2M in the automotive sector. In-car connectivity and services such as fuel consumption, safety monitoring, real-time news, maintenance and pay-as-you-drive insurance subscriptions are ‘driving’ growth.
And the report claims the US has also been fast to deploy smart grids that use connected smart meters to track energy consumption in real time and enable a homeowner or business to remotely monitor their use of power, with 43 million smart meters installed across the country as of the end of 2012. In many cases, smart meters are being integrated into a broader home automation system (such as AT&T’s Digital Life service) that enables the householder to remotely control heating, air conditioning, lighting and even individual appliances, such as security cameras or burglar alarms. The report states there were approximately 2.3 million smart home installations in North America in 2013.
US number two operator AT&T was also credited in the report as being the first US operator to launch the GSMA Embedded SIM specification. The idea behind the technical specification is to allow over-the-air operator management of M2M services. Some M2M devices are often hermetically sealed, such as in the connected car or smart meters, meaning it is not physically possible to change the SIM in the event of a change of subscription from one operator to another.
“All parties in the M2M ecosystem will struggle if we remain solely dependent upon the traditional SIM card, which is predicated on only associating with one network operator,” adds the report.