Mobile M2M Market in India

Mobile M2M Market in India

January-2012

1 Copyright Jan 2012, Tonse Telecom

Mobile M2M Market in India

Executive Summary
As Indian telecom transitions to a data era, its staggering mobile base finds new modes of exploring wireless connectivity into social networks and mobile commerce; operators are finding new ways to bring in additional revenues to the table. Mobile operators are exploring the possibility of bringing in connected devices as a new enterprise service in the form of M2M (machine to machine). Mobile M2M is still an emerging service in India and only some operators have so far experimented with the possibilities. The Mobile M2M eco-system is beginning to grow, triggered by various drivers such as state electricity agencies as well as verticals such as logistics and health / agro industries. The mobile operators at this point are facilitating the end-to-end solution as they are impressed not only by the high value-addition the solution brings to the enterprise client but also by the scale that these M2M solutions can achieve. Unlike some Western operators, these are still early days and Indian operators are not yet structuring their businesses to include a M2M business division yet but this will happen eventually. The Indian Mobile M2M space still has some key pieces missing for example lack of MVNO play which could inhibit specialized application offerings. For now, we are seeing Mobile operators partnering with M2M ASPs via a still-formative value chain with several specialized solutions coming together to complete the offering. Unlike some other markets where compliance and regulatory aspects are drivers, India will see M2M applications driven more to improve processes, reduce losses (power distribution and transmission), improve efficiency (faster tracking of goods in movement / logistics), security (video surveillance) and healthcare (patient monitoring for example). Several solutions are already in pilot phase with some operators evaluating solution readiness and end to end SLA management. Early stage players are bringing in cloud based data analytics solutions, M2M device monitoring applications to the market and exploring partnership opportunities and early market entry. From a hypothetical model developed for a given service area with 1.72 million mobile M2M device install base, Tonse estimates that for the mix of mobile M2M applications deployed, the potential total revenue opportunity is about USD 141 mil over a three year period. In steady state, assuming data services are adequately available and vertical applications take off, Indian market will consume millions of Mobile M2M devices. A base of 25 million mobile M2M devices covering smart metering, healthcare, agro and logistics applications over a three year period, could potentially generate to mobile operators a combined revenue base of about $1.8 billion including activation fee, device rentals and data revenues combined. Tonse estimates that by year 2014-15, mobile M2M data revenues will contribute to about 5.97% of projected total mobile VAS revenues in India. Considering the larger picture of end to end market, with associated back-end applications, system integration support, storage and cloud services that would be required to support mobile M2M, this market could balloon into a potentially very large opportunity.

2 Copyright Jan 2012, Tonse Telecom

Mobile M2M Market in India

Table of Contents
1 2 EXECUTIVE SUMMARY......................................................................................................... 3 INTRODUCTION ..................................................................................................................... 4 2.1 2.2 3 SCOPE OF THE REPORT..................................................................................................... 5 TERMINOLOGIES................................................................................................................ 5

M2M INDIA - MARKET ANALYSIS ........................................................................................ 6 3.1 3.2 3.3 KEY OPPORTUNITIES AND DRIVERS FOR M2M MARKET IN INDIA............................................ 6 M2M STANDARDIZATION BODIES ....................................................................................... 7 M2M APPLICATIONS CURRENTLY ACTIVE IN INDIA ................................................................ 7

M2M TECHNOLOGY TRENDS .............................................................................................. 9 4.1 4.2 4.3 M2M ARCHITECTURE ........................................................................................................ 9 TYPES OF M2M DEVICES ................................................................................................. 11 CHALLENGES AND SOLUTIONS FOR M2M .......................................................................... 11

MARKET DRIVERS .............................................................................................................. 13 5.1 5.2 5.3 5.4 BUSINESS MODELS ......................................................................................................... 13 VALUE CHAIN .................................................................................................................. 16 IMPACT OF M2M ON COMMUNICATION NETWORK .............................................................. 17 ASSUMPTIONS USED IN THE MODEL: ................................................................................. 17

6 7

CONCLUDING REMARKS ................................................................................................... 23 METHODOLOGY ADOPTED IN THIS REPORT: ................................................................ 24 7.1 7.2 7.3 ACKNOWLEDGEMENT....................................................................................................... 24 ABOUT TONSE TELECOM: ................................................................................................ 24 COPYRIGHTS AND DISCLAIMERS:...................................................................................... 25

List of Figures
Figure 1: Typical M2M Network schematic .................................................................................... 10 Figure 2: M2M Value Chain ........................................................................................................... 16 Figure 3: Tonse Estimates, M2M projection- Devices & Load on Network.................................... 21 Figure 4: Tonse Estimates, M2M projection- Revenue .................................................................. 22

List of Tables
Table 1: Types of M2M devices for various parameters ................................................................ 11 Table 2: Tonse Estimates, Hypothetical market projection for M2M in India ................................. 20 Table 3: Tonse Estimates, Consolidated M2M projection ............................................................. 21

3 Copyright Jan 2012, Tonse Telecom

Mobile M2M Market in India

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Mobile M2M Market in India

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