The highly competitive and fragmented European cellular Machine to Machine (M2M) market will grow to 416.5 million connections by 2023 according to a new report by ABI Research.
To differentiate themselves in this market, European network operators will have to turn toward new business models and increasingly competitive LPWA technologies to keep and grow their existing market share.
Ryan Harbison, Research Analyst at ABI Research, says:
“While cellular LPWA connections such as NB-IoT and LTE-M will make up the largest portion of M2M connections in Europe in 2023, operators will face increased competition from non-cellular technologies such as SigFox and LoRa.”
“By focusing on defining use cases and providing value-added solutions that go beyond just the connectivity piece of the value chain, operators can provide differentiated offerings in their respective domestic and international markets. Moving forward, European network operators not only need to know their business, but they also need to know their target customer’s business to recognize market opportunities.”
Additionally, network operators need to understand that the European market is also heavily influenced by European Union initiatives and regulations.
Of the 86.0 million cellular connected M2M devices at the end of 2017, 67.4% were related to telematics and other transportation applications partly due to the EU’s eCall initiative on having connected devices in each new vehicle to relay airbag deployment and impact sensor information to emergency agencies in the event of a crash. Likewise, 22.0% of total connections were related to smart city and other infrastructure industries partly due to the EU’s Smart Grids Task Force on spurring smart energy deployment and development.
Operators like Orange, Deutsche Telekom, and Vodafone that have deployed NB-IoT networks have done so because connections within these larger vertical categories fit the NB-IoT use case of generally transmitting small amounts of data infrequently.
“European operators are largely realizing that connectivity is the lowest common denominator and are shifting their focus to the long-term value these connections generate,” concludes Harbison. “Vodafone’s M2M strategy is focused on putting a greater emphasis on its own cloud services than on just the connectivity component, while Deutsche Telekom and Orange have opened IoT labs to develop and test application-specific IoT prototypes. By focusing on these new technologies and market opportunities, European network operators can maximize the value that their connections and solutions provide.”