Swedish alternative wireless operator Net 1 said it is focusing its M2M operation on being a connectivity provider rather than attempting to assemble a “solutions” portfolio. Noting the specific skills needed to address vertical markets, Gosta Kallner, its CTO, noted: “We see the customer usually being superior to us, so there is no reason.”

“If you look at the spread in variety of machine-to-machine, if you are going to learn about every different business segment and its requirements, you are going to need a lot of people. It’s better to be very humble, and say ‘we don’t know what you do, but we can provide you with this’,” he continued.

Net 1 is offering different options to address the needs of verticals, based on differentiation in security, quality of service and data usage. For example, for ‘smart grid’ operations a private network option is available which incurs a “significant cost”, while for less sensitive markets a “best effort” service can be used.

Among the industries where Net 1 is working are forestry, mining (deemed “big spenders”), shipping, security and public services.

Despite competition in the market, Kallner said that the company is not interested in differentiating its offering by price. “We are usually a little bit above the rest. We see that there’s no need to push prices further than they are. It’s not worthwhile. There are so many others that are always looking to be the cheapest”, he noted.

With connectivity providing an important tool in improving business across sectors, low-cost options such as confining network use to off-peak periods have not proved especially popular. “People think, ‘oh that’s great, we can do that,’ but then they look at the cost savings and decide that it’s not worth it”, he said.

The executive noted that by focusing on connectivity rather than value added services, the company is “probably more prepared” than its rivals for the growth of over-the-top providers which is affecting the industry worldwide.

“We are probably more prepared, in the way that we do not have too many value added services. We are not too dependent in the same sense. We are more of the bit pipe that the other ones are becoming over the years”, he noted.

Net 1 is focusing its efforts on areas defined as “rural” and “countryside”, rather than looking to compete against established rivals such as TeliaSonera, Tele2, Telenor and 3 in urban areas. “We see that as extremely expensive”, the executive said.

As with its fellow CDMA450 peers, the company is focusing on coverage as a differentiator. It is claiming 96 percent geographic coverage of the area, with 400 base station sites providing coverage and an additional 100 boosting capacity. Kallner said that joint Telia/Tele2 network has a 50 percent geographic coverage – focused on the areas with the biggest populations – with a network of 8,000 to 9,000 sites.

Net 1 noted a significant presence in the under-represented north of the country, including the border area with Finland.

Due to its niche position, Kallner was modest in his forecasts for the business. “We don’t look at millions of subscribers. We are looking at getting up to a couple of hundred thousand,” he said.

Kallner acknowledged that as a new entrant working with an alternative technology, which is less established in Europe than some of the alternatives, presents the company with some challenges.

“We are still just starting. In Sweden, with Telia, they’re the big ones that have been there 20 years. To build up a brand, get people to invest in buying infrastructure from you, devices, it takes time,” he said.

Kallner concluded: “We see it as something you grow in to. You get to know your customer, you get them confident with you providing a service that works.”