Vodafone is Positioning Itself for a Significant Role in the Global M2M Market

| Dec 18, 2009 | Enterprise Mobility - Europe | Competitive Intelligence Report

| Analyst: Kitty Weldon

Current Perspective: Positive
Vendor Importance: High
Market Impact: Moderate

Event Summary

December 10, 2009 - Vodafone is preparing for a more aggressive role in the global M2M market for both B2B and B2C services, with a focus on automotive, consumer electronics, utility, and healthcare verticals. The carrier has an advantage due to its wide-spread geographical coverage which includes not only all of the EU 27 countries but can extend to all GSM networks through partners with the same global SIM. Vodafone has also developed a reinforced SIM and is preparing for March 2010 commercial availability of an internally developed service delivery platform.

Analytical Summary

• Current Perspective: Positive on Vodafone’s M2M initiatives and strategy as the carrier has an inherent advantage over many competitors in offering global services due to its large cellular footprint. In addition, as it will be able to offer the same global SIM on any GSM network (by March 2010), it can offer low cost service pricing, not only in all 27 countries within the EU, but throughout the world. This also leads to lower cost and efficiency as the SIM can be put in the device during the manufacturing process

• Vendor Importance: High to Vodafone, as M2M has the potential to generate significant revenues for wireless operators, and companies are likely to value Vodafone’s large footprint and the resulting relative ease and low cost of deployment. In Europe, mandates for automated “smart” metering are going to be a major market driver for the wireless M2M business and Vodafone (and other European carriers) will reap the benefits.

• Market Impact: Moderate on the M2M market, as all carriers are looking to both B2B and B2C opportunities for significant future revenue but it is not clear that competitors have “cracked the code” on how to provide services cost effectively beyond their home regions. For many verticals, such as manufacturers of mass market consumer electronics devices as well as automotive telematics, M2M is a global proposition; not having to strike separate relationships with multiple carriers, or pay expensive roaming fees is a compelling message. However, while Vodafone may have an advantage with a large global network (and part ownership of a major U.S. wireless operator) it is not clear that this guarantees it the dominant position in a very competitive market.

CLIENTS ONLY

Current Perspective

Competitive Positives and Concerns

Recommended Vendor Actions

| Client access - Full report in Enterprise Mobility - Europe | More information

Recommended Competitor Actions

• Orange Business Services should note that it has similar global coverage to Vodafone with mobile networks in 29 countries in which it offers a global SIM. It should also note its own reinforced SIM, its vertical expertise (including its key role in fleet management) and its internally developed SDP. It should note that it manages over 1.3 million M2M SIMs today.

• Telenor should note that it is very focused on making M2M successful for its customers (via a consultative selling approach). It provides advice on best practices, and adapts solutions for different verticals. However, it will not encroach into partners’ areas of expertise so it will not write middleware or make devices. It has been working with Logica on a new management platform which should be available this month and is also working on figuring out how M2M can become more efficient by using less data. It should note that it has over ten years of experience in M2M, with over 1 million SIMs under management.

• AT&T should tout its own capabilities in M2M, with recent successes in both the B2B and B2C segment. It has also forged relationships with key vertical application providers in the utility market, has extended its relationships with both Kore Telematics to decrease the time involved in network certification, and with Numerex to leverage the MVNO’s expertise. And while it uses the Jasper Wireless SDP, the platform is one of the best available in the market today and Jasper is very concerned with meeting its partners’ requirements.

• All global carriers should point out that Vodafone is later to the M2M market then many of them are, and has only announced its M2M initiatives within the last six months. In addition, competitors are also working on ways to address the issue of global connectivity and so it is not clear how long Vodafone will be able to leverage its footprint for significant competitive advantage.

• Telefonica should note that the need to incur roaming charges is not a significant problem when low speed GPRS connections are used, which is the case in the majority of M2M applications in use today. The impact of the roaming costs depends on the region and the application. In Europe wholesale prices are decreasing due to EC regulation. In addition Telefonica has real-time tools to decide on the least expensive operator to minimize the roaming cost, and has preferential commercial agreements with many operators. It has also developed a platform with optimized operational costs due to fewer manual procedures and economies of scale.

Recommended End User / Customer Actions

• M2M OEMs with global connectivity requirements should strongly consider using Vodafone, especially if they need to communicate throughout the EU. However, they should ask to see proof of Vodafone’s SDP and professional services capabilities.

• Customers have many choices when it comes to which carrier(s) to use for global M2M connectivity. They should realize however that carriers still rely on roaming relationships which ups the cost of connectivity and may make SIM management more difficult.

CLIENTS ONLY

Current Perspective

Competitive Positives and Concerns

Recommended Vendor Actions

| Client access - Full report in Enterprise Mobility - Europe | More information

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