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TMCNet:  Telcos bet big on machines talking to each other

[December 22, 2012]

Telcos bet big on machines talking to each other

MUMBAI, Dec 22, 2012 (Mint - McClatchy-Tribune Information Services via COMTEX) -- Telecom services providers, or telcos, such as Vodafone India Ltd and Bharti Airtel Ltd are getting ready to offer enterprises and governments advanced machine-to-machine (M2M) applications that go beyond just smart meters, e-challans or the ability to collect tax with SIM card-based machines. The objective is to enhance their revenue from enterprises.


M2M can be defined as the automated exchange of information between machines. With telcos, it involves the use of SIM (subscriber identity module) cards that are embedded in machines to provide real-time exchange of data that can improve productivity in companies.

Vodafone India, for instance, has around 60,000 SIM card-enabled smart meters in three Indian states, according to Naveen Chopra, director of Vodafone business services, a unit of India's second largest telco.

Smart meters send electronic meter readings to the energy provider automatically. While some have in-built radios to relay meter readings, the ones from Vodafone have in-built SIM cards (like those in mobile phones) that send the readings. "A CTO (chief technology officer) once asked me if I could put this (smart meter) in every machine on his shop floor so that he could reduce his electricity consumption by 10%. What's meant for houses now enters the factory, too," said Chopra.

With the help of Vodafone Group Plc's "dedicated global M2M service platform that provides a central point of control for all data connections", the telco will soon be able to embed SIM cards in cars that will automatically help diagnose engine faults and warn drivers about them before their journey starts.

Chopra plans to introduce this platform in India in January. "We have already done some pilots in Mumbai," he said.

The global M2M platform, said Chopra, will also help enable services such as personal navigation devices, fitness monitors and e-readers. It can include remote monitoring devices that let doctors monitor information on patients with heart conditions and diabetes; support devices that let customers make secure payments and transactions, and give retailers real-time updates on their stock levels; wireless communications that allow remote surveillance and access to control systems, motion detectors and controlled areas.

Doors and gates can also be opened remotely within seconds, and lifts or vending machines can inform a service centre if there's a fault. Used in conjunction with satellite-based global positioning system units and location-based services, M2M can provide real-time information such as vehicle location, driver speeds, fuel consumption and employee work time, "improving the efficiency of supply chains in enterprises", said Chopra.

M2M is also becoming an integral part of patient care, helping to cut costs as well as save lives. Remote monitoring devices can be used to allow physicians to monitor information about patients with heart conditions and diabetes. They can also be used to provide improved support and quality of life for elderly and housebound people in a non-intrusive manner, note analysts.

The country's largest private telco, Bharti Airtel, which launched its 4G (fourth-generation) services in Kolkata, Pune and Bangalore, also expects an increase in M2M connections.

"It's a nascent market, but holds a lot of potential. According to industry forecasts, the M2M market in India is expected to grow over 30% CAGR (compounded annual growth rate) over the next four years," said Drew Kelton, president (enterprise services, India and South Asia), Bharti Airtel.

He cited the case of the Chennai Tax Corporation that has 300 SIM card-based machines that run on the Airtel network. The company is also running a pilot with the Orissa State Road Transport Corporation (OSRTC) in which the fuel tanks of 50 buses have been installed with sensors that will allow OSRTC to keep a track of fuel consumption and control pilferage.

In Punjab, the state education department is using biometrics provided by Airtel on top of a SIM card-based device that transmits attendance record of teachers in government schools to a central database.

"By providing real-time data, you can change business models of companies across sectors -- be they automobile, health or insurance industries. M2M is changing the way you build cars of the future, the way companies store inventory. But, for this to mature, there has to be a whole new ecosystem. Mobiles can provide high-quality capabilities in this context," said Kelton. He expects M2M to add significantly to the firm's enterprise revenue in the coming years.

In August 2009, Reliance Communications Ltd (R-Com), too, had announced it would focus on "high-impact machine-to-machine applications".

"The company is one of the largest users of IMs (intelligent modems), and has successfully used them in energy solutions in urban and semi-urban areas. R-Com sees a major potential of machine-to-machine solutions in both rural and urban markets in India," it said in a statement at the time.

The M2M opportunity for the rural market, it had noted, includes automation of agro and irrigation services, water level monitoring, and data gathering for milk and agri-cooperatives, fisheries, poultry and soil analysis.

R-Com officials could not be reached for comment.

"The emergence of new service formats such as machine-to-machine communications (e.g., remotely operated irrigation pumps, smart grid, among others) represents tremendous opportunities, especially as their roll-out becomes more widespread," Union communications minister Kapil Sibal had said in the 2011 draft national telecom policy.

Analysts, too, are bullish about the prospects of M2M that can also be used to support secure, real-time payments and transactions and provide retailers with real-time visibility into their inventory.

IMS Research forecasts the market for cellular M2M connectivity services to rise from approximately 107 million connections globally in 2011 to about 326 million connections by 2016. According to analyst firm Berg Insight, the number of cellular network connections used for M2M will touch 187 million by 2014. The number stood at 47.7 million in 2008.

According to research firm 6Wresearch, the India M2M modules market is expected to generate Rs.556.43 crore by 2016. Technologies such as 3G, 4G and government projects such as Aadhaar will give a further boost to this market, say analysts.

"Airtel Enterprise Services is betting on the convergence between IT (information technology) and telecom in enterprises, and to that effect, has launched a wide swathe of application and services targeting these markets. Vodafone, on the other hand, is betting on the palpable shift to connected devices and the concomitant surge in data volumes from human-centric traffic to machine-centric traffic," said Alok Shende, founder director and principal analyst at Ascentius Consulting. "While the revenue impact in the immediate horizon is likely to be insignificant, these are bold bets on the future and can potentially catapult the service providers in the respective domains." "We can conclude that the future is now with smart energy technology that will turn everything 'smart'. Then we can have 'smart homes', 'smart grids', and even 'smart cars'," said Padman Kumar, senior manager (business transformation practice) at Wipro Consulting Services, in a 2011 white paper. "All these aspects will be ultimately controlled by M2M technology as digitization solutions." R-Power has sued HT Media Ltd, publisher of Mint, in the Bombay high court over a 12 May 2010 front-page story in Mint that it disputed. HT Media is contesting the case.

___ (c)2012 the Mint (New Delhi) Visit the Mint (New Delhi) at www.livemint.com Distributed by MCT Information Services

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