Tuesday, 9 April 2013

There's a top tier of 4 global M2M operators, but it's not all bad news for everyone else...


Last week we at Machina Research published the results of our annual M2M CSP Benchmarking Study. For the second year running, Vodafone was crowned the communications service provider (CSP) best placed to take advantage of the global M2M opportunity.

The study compared major M2M CSPs in six key areas that will determine their future success: Pedigree, Platform, Place, Partnerships, Process and People. Based on ratings across each of these six ‘P’s, Machina Research has identified a clear top tier of four CSPs that are establishing themselves as global leaders: AT&T, Deutsche Telekom, Telefonica and Vodafone.

Obviously everyone's interested in why Vodafone got the top spot and what we see in the other three operators to single those four out as the top tier. In many cases it's a question of scale. Who has the global clout to win and profitably support a global M2M deployment? But it's more than that. It's also about having the right focus on doing M2M the 'right way'. For instance, Vodafone benefits tremendously from its scale, but it has also focused a lot of attention on adding value through a diverse set of product offerings and pursuing new approaches to reduce the cost and complexity of M2M offers. Also, structurally it is now better placed to address M2M having bought C&W Worldwide and effectively promoted M2M within the new Vodafone Enterprise Division.”

However, I think it's safe to say that the best way to score well in the rankings is to demonstrate the ability to support large deployments in all corners of the world. The remainder of the top 3 all did good work in 2012 to achieve that: Deutsche Telekom confirmed its commitment to the US (which is very much the ace up its sleeve), AT&T proved its global credentials through its network of operator alliances and Telefonica really pushed the new M2M alliance with DOCOMO, Rogers et al (but I wish they'd come up with an official name!!!).

We talk to a lot of end user customers, particularly in recent weeks auto OEMs, and our view about a global top tier very much aligns with their thinking. There's only a small select band that they'd turn to. Of course that's not to say that these huge global deals are the be-all-and-end-all of M2M. In fact they're typically a bit lower margin than the smaller scale SME business. Those CSPs not in the top tier are well able to address many other interesting and profitable opportunities in M2M. They can, for instance, focus on particular vertical sectors or on differentiating in their footprint territories based on specific assets they have.

For more details of the report click here. For the press release, click here.

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