M2M Communications in Smart Cities – the Next Wave of Market Potential, Believes Frost & Sullivan

Frost & Sullivan recognizes the role of Telecoms in the next face of M2M evolution in the 2011 European ICT Awards Programme.

London, United Kingdom, September 01, 2011 --(PR.com)-- Machine-to-machine (M2M) communications received a new lease of life after telecom service providers reorganized their traditional M2M solutions to enable a world of interconnected machines and objects. However, in a highly competitive market, M2M providers should look for new revenue streams for a sustainable market edge. According to Frost & Sullivan the next layer of M2M revenue opportunities for the ICT sector will come from M2M in Government and the Smart Cities concept.

New Frost & Sullivan analysis finds that, the M2M market in EU27 in 2010 registered another year of high growth, increasing almost 60 percent year-on-year to reach approximately 20 million M2M SIMs. “Telco companies have built their growth by successfully targeting Tier 1 customers and expanding into new geographic markets in their operational footprint,” says Yiru Zhong, Industry Analyst for Frost & Sullivan ICT group.

The Smart Cities concept, defined by Frost & Sullivan as an interconnected urban environment with citizens leading a fully digitalised lifestyle, can be further developed with a committed government hand in employing M2M technology. By setting up a conducive framework for leveraging different types of urban stakeholders, the government can also benefit from improved delivery of local government services and a positive environment to attract investments.

“The government must play a critical role in overcoming any coordination issues by managing interests of various urban stakeholders such as energy service providers, environment services providers, transportation, tourism, and most importantly digital citizens,” adds Ms. Zhong. “The degree of smartness may currently be limited to the well defined M2M functions of track and trace, remote monitoring, status updates and security access. However, the future of Smart Cities depends on the rate at which new and smarter M2M applications can be developed for business critical processes in the above sectors.”

With their reorganisation to address M2M opportunities, telecom service providers are also seeking partnerships to roll out the Smart Cities concept. There are a few prominent examples of telecom service providers working with local city councils on electric vehicle charging or environmental service providers on smart energy services. The expectations are for telecom service providers to find a new and sustainable revenue stream in facilitating this beyond a pure connectivity perspective.

The pace of eco-system development will depend on how quickly important partners are tapped in the various industry value chains. This is vital not only for companies to find the best possible candidates but also to establish first mover advantage by maintaining a level of exclusivity for a period of time.

“The implication on competitive dynamics within a wider M2M service provider space is the rate of new market entry,” comments Ms. Zhong. “As more telcos jump into the M2M space, competition will increase and the urgency to establish a market leadership in richer M2M applications becomes more critical.”

As cities evolve into clusters of smart communities, the importance of ICT players successfully adapting to remain relevant market players for their customers cannot be overstated. Frost & Sullivan recognizes ICT market leaders in transforming their services portfolios to meet evolving customer needs. Introducing the 2011 European ICT Awards Programme, Frost & Sullivan included M2M Service Provider and M2M Wireless Technology Vendor as important categories among other best practices. The winners will be named at the prestigious ICT Award Banquet on Tuesday, 29 September 2011 in London.

If you are interested in attending the ICT Industry’s Best Practices Awards 2011 Banquet or would like to have more information on the Frost & Sullivan 2011 European ICT Awards Programme, please contact Joanna Lewandowska, Corporate Communications, at Joanna.lewandowska@frost.com. A limited number of complimentary passes are available to members of the media.

Frost & Sullivan has also recently published M2M in Government –
Driving the Smart City Concept analysis. Please contact Joanna Lewandowska at the email address above for further information on the study.

About Frost & Sullivan
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Joanna Lewandowska
Corporate Communications – Europe
P: +48 22 390 41 46
E: joanna.lewandowska@frost.com


Frost & Sullivan
Joanna Lewandowska
+48 22 390 41 46