The Massive M2M Business Opportunity for Telcos

By Jens Amail, SVP for Service Industries, SAP

The Massive M2M Business Opportunity for TelcosTelcos are sitting on a gold mine of core capabilities and assets, critical for M2M success. In addition to just network connectivity, they have outstanding expertise in large scale service delivery with high reliability and global reach, plus an arsenal of partners for content, apps, specialized solutions and services, integration, as well as terminal and module vendors.

Where do I see the most opportunities in the M2M space for communication service providers (CSP)? I see opportunities everywhere because most industries will be adapting some form of M2M scenario, with certain industries being farther ahead than others. I think CSPs should look at those industries where they have the strongest footprint and where they can build upon their current strengths.

Take the example of the automotive industry and connected cars. Equipped with internet access that can share data between devices inside and outside the vehicle, these cars have special technology that brings additional benefits to the driver. A car like that is like a personal assistant. It can connect you to your email, display your latest social network updates and enable your phone calls. It can direct you to the nearest empty parking spot and even help you find it in case you can’t remember where you parked.

In some smart cities, these cars are also connected to public transportation grids making inner city traffic more manageable. Add new regulations such as eCall in Europe for automatic emergency calling and the Contran resolution in Brazil requiring all vehicles to be fitted with an anti-theft tracking device to help reduce car thefts and lower car insurance rates, and you can see how all these scenarios offer ample opportunities within the industry.

It will be key for CSPs looking at M2M business opportunities to have a clear strategy about how they’ll go to market. Successful business in this new, exciting M2M world will require strong partnerships amongst various providers for a full service offering to the enterprises – meaning that CSPs need to partner with a network management provider for device connectivity management as well as an M2M software platform provider that integrates seamlessly to the enterprise backbone.

Telcos should look for partners in the software industry with a successful track record in those verticals they want to go after with M2M services. The market has tremendous potential and many of the CSPs that I’ve spoken with expect over 5% of their revenue to come from M2M services in the short-term. Selecting the right partners will be a critical success factor for sustainable and profitable growth beyond Telco.

In short, I see tremendous growth potential for operators to develop beyond their telco roots.

As providers of mobile networks and services, telcos can become main drivers in the M2M space by forging strong partnerships with network management and software platform providers – leveraging the power of three for success!


May 15, 2015


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