Mobile network owners eye M2M technology

Vodafone, Telecom and 2degrees are looking at machine-to-machine applications as a growing revenue stream

By 2020 the number of connected devices in the world is estimated by Machina Research to be 12 billion – up from one billion in 2010. In Australia Telstra is predicting the machine-to-machine (M2M) market will be worth $1 billion annually in that country alone in 10 years.

Predictions like these are driving Vodafone’s investment in machine-to-machine (M2M) connectivity. General manager of business development Steve Rieger says the telco is building capacity for 20 million devices on the Vodafone New Zealand network by 2020.

“In a matter of a small number of years we will have more machines on our network than people by a factor of four or five,” he says.

There are around 500,000 connected devices on the Vodafone network today.

M2M manager Grant Fisher, who leads a team of six, says M2M solutions have been around for some time, but it is only recently this area is has gained traction as a major revenue stream. In part this is because the software applications are becoming less bespoke and more “shrink wrapped”, enabling entrepreneurs to get services to market cheaper and faster.

“We’ve been doing this stuff for seven to eight years now, since the GPRS layer (which enables data traffic on 2G networks) was built,” he says. “ The early adopter solutions were around things like transport, fleet management, fleet tracking and that kind of thing. More recently there are things like payment with eftpos connectivity and utility metering which is growing quickly for us.”

Vodafone Group has established a Global Data Services Platform, which Fisher describes as a virtual division employing around 200 people working on international M2M solutions.

“M2M is becoming a global phenomenon, there’s huge scale that is happening quite quickly. If you look at all the consultant predictions, it’s a real hockey stick [a term used to describe vertical growth],” Fisher says.

An example of where Vodafone’s global platform for M2M could be deployed is the car industry. Fisher says the European Union is looking at the eCall project, which would mean when an airbag is released, a signal is sent automatically to the emergency services. Car manufacturers will want to ship this capability worldwide, but they don’t want to deal with individual telcos in different countries.

“We can have a relationship with BMW at their headquarters in Germany which provides a solution for their entire global footprint, including a global price. So the concept of roaming and all of the price uncertainty that goes with that is removed,” Fisher says.

The tiny SIM (see photo below) would be soldered onto the the circuit board, so that when a new car arrived in New Zealand, as soon the owner turned the key the SIM would authenticate on Vodafone’s network here, but the billing arrangement would be with the global platform.

Fisher says the TomTom navigation system and the Kindle are examples of M2M connectiviy that are managed from the global platform. However, there is potential for New Zealand companies exporting solutions to negotiate with Vodafone globally. Fisher’s example here is Fisher and Paykel’s solution to help patients suffering from sleep apnea. In the US, insurance companies demand that patient use be monitored and this had to be carried out using a USB stick, but the company is now building a modem into the device to enable M2M monitoring.

Precision agriculture is another growth area for M2M in New Zealand. Rieger says that the mandatory monitoring of cattle and deer under the NAIT scheme will help drive this, but as the electronic tags reduce in price (currently around $1-$2 each), farmers of other livestock are also likely to see the benefits. “You can have yards set up so that the cattle runs across the set of scales and the farmer knows he’s got 20 ready for killing weight.”

2G vs 3G for M2M

Vodafone will continue to invest in its 2G network to enable M2M applications, Rieger says.

“We are slowly but surely shifting everybody to 3G and within a very short number of years we will be LTE. That is excellent for high capacity data use and 3G is brilliant for voice. So that leaves 2G empty and the low cost nature of the devices on the 2G network make it really practical, and the snippets of data are perfect for GPRS.”

Fisher claims that 2G is the defacto standard for M2M today.

However Gen-i product marketing manager Aaron McDonald disputes this – an unsuprising position given that Telecom is due to switch its CDMA network off in July, and its WCDMA network doesn’t have 2G capability.

McDonald says 3G networks are more efficient at handling data.

But as M2M applications only transmit tiny amounts of data, doesn’t this make a 2G network with a GPRS layer more appealing?

“That’s a bit of a misnomer in terms of resource,” McDonald says. “While the actual packet throughput is quite low in terms of the size of the packets, the fact that they signal quite often overloads the networks.

“So you can have very small amounts of data but there is associated signalling — that’s the bit that can trouble the mobile network and it’s a much bigger risk than the data itself.”

McDonald points out that until now most M2M applications have been developed primarily for 2G networks, however this will change.

“You will start to see more data intensive M2M applications come out. You’ve got security for example, that will represent a reasonable amount of growth with the ability to not only alarm your house but stream live video from those same devices back to a smart phone or an iPad,” he says.

McDonald says Gen-i is talking to a biotech firm that produces scanning devices for remote medical practices, which will send high resolution images back to a cloud based server to process. “You can’t do those kinds of things on a 2G network, it would consume too much resource.”

Gen-i is in the process of responding to RFPs in the telehealth space around monitoring, emergency health and e-medicine. About two years ago it was part of a trial with Alcatel Lucent and the Auckland district health board which involved the remote monitoring of cardiac patients (McDonald says the trial was successful but it has yet to go to market).

2degrees head of product and pricing Gavin Costello says M2M-tailored plans are becoming more in demand as the mobile network owner moves into the business space. In common with Vodafone, the telco also has a 2G network enabled with GPRS.

“At the moment GPRS is really ideal because the devices are cheap, typically in terms of modems... it’s cost effective from a customer perspective and the network is suited to carry small packets of information,” he says.

“But as we move forward you will see data requirements rise.”

Costello says it’s too early to say if 2degrees will keep its 2G network if and when it upgrades to LTE (the upgrade may be dependent on if 2degrees secures a slice of the 700 MHz spectrum).

M2M not just a cellular solution

It isn’t only mobile networks that are being used to deploy M2M solutions, as telecommunications consultant Jon Brewer points out.

“I think using GPRS or 3G is a great way to do M2M communications — but it’s not the only way,” he told Computerworld.

Two examples of M2M applications which have been implemented without the telcos are Arc Innovations using 900MHz mesh wireless technology to read meters at 130,000 properties in New Zealand and AgHub, which use a 2.4GHz mesh wireless technology on farms (based on 802.15.4/Zigbee, not 802.11/wi-fi).

Also, Gen-i points out when delivering M2M solutions, fixed broadband can be used, for example in a smarthome. “If you take the example of a smarthome device, this may use wi-fi or mobile to communicate with a wi-fi home gateway, with information then relayed over broadband to the core application.”

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