M2M connectivity revenues to hit $88 billion in 2023: Analysys Mason

Telecoms operators are set to make a staggering $88 billion in revenue from the provision of M2M services in 2023, up from $10 billion this year, according to new research from Analysys Mason.

The market-research company reckons emerging economies will account for much of the revenue growth as applications are customized to suit local needs and technology costs fall.

It also predicts that small and medium-sized enterprises (SMEs) will grow their share of overall M2M device connections from 14.6% in 2013 to 24.6% in 2023.

Although M2M services are currently too expensive for many SMEs, costs are bound to fall as service providers begin to provide off-the-shelf solutions, says Analysys Mason.

“Operators have already been successful in selling productised M2M solutions such as fleet management to SME customers,” says the company. “We believe operators will find success in selling security and surveillance, some healthcare solutions and some retail sector M2M solutions to SME buyers.”

Another report finding is that M2M device connections will grow in number in emerging markets over the forecast period, with developed markets’ share of connections declining from 68% to 62% over the forecast period.

Analysys Mason says developed-market operators have already recognized that organizing the various aspects of an M2M business takes about 18 months, and that operators with the appropriate teams and resources in place will be poised for greater success as the market begins to grow.

Although emerging-market operators are currently focused on the sale of handsets, they are likely to grow increasingly interested in M2M opportunities in the utilities, automotive and security sectors from 2016 onwards as business models in these areas become clearer.

Indeed, the utilities sector represents the fastest-growing M2M market and is set to account for 67% of overall M2M device connections worldwide by 2023, says Analysys Mason.

While the automotive and transport sector currently accounts for 28% of total M2M connectivity revenue, its share will fall to 24% in 2023 as the utilities sector grows in importance.

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