Major upgrades to networks across the Middle East last year laid a foundation of faster and more reliable connectivity with lower latencies. Wireless networks in particular were also sporting increased bandwidth and early stage deployments of next generation 4G/LTE networks, and ever faster smartphone devices were all suggestive of foundations enabling greater communication between devices. The availability of a near-infinite number of IP addresses by the increasing use of IPv6 also meant that every device — from fridges, to smart meters, to pacemakers to cars — could all be wirelessly connected to one another.
M2M technology is poised to come back with a vengeance in 2012 with many factors working in its favour. For the uninitiated, M2M describes networked sensors, devices, and applications that can be used to monitor physical assets — such as humidity levels in a manufacturing facility, or the location of all of the vehicles in a delivery company’s fleet. Forrester describes M2M as technology resources that can “provide information on the life of products, assets, or even people.” The idea of people being part of an M2M network may seem far-fetched, until you consider that millions carry health monitoring devices with them, and tens of millions of people carry smartphones, which, if equipped with the right technology and applications, can serve as remote sensors or part of an information-aware grid.
“M2M systems within the Middle East represent a major step towards the future and will facilitate a host of new services within areas such as e-healthcare, smart cities, intelligent transportation, and other advanced logistics systems. In many countries in the Middle East there are far more devices than people, so we are talking about an enormous market in which numerous opportunities are opening up for vendors, solution providers, systems integrators and MNOs. If we are to exploit this potential, the region’s network infrastructure must support the efficient transport of a huge number of connections with varying requirements on bandwidth and quality of service,” says Ihab Ghattas, Assistant President of Middle East, Huawei
Attila Kesimgil, Customer Principle & Driver of M2M Business, Region Middle East, Ericsson, likens M2M industry to the early days of the PC industry in 1980s. “In order for the PC market in those days to take off, one needed the operating system and the PC application software. The PC hardware would not suffice. There is a similar situation for M2M. In order to reach critical mass for M2M, one requires services and applications. In order to attract application service providers, however, one requires connectivity platforms and APIs to build applications. The players who will create an ecosystem for MNO’s, application service providers will drive the M2M takeoff in the region.”
Mohammed Anis Chemli, Global Account Manager, Telecom Business Unit from Gemalto agrees that 2012 will definitely be the year of M2M and points out the technology is there, which creates new sources of revenues for mobile operators while bringing tremendous benefits to businesses using the technology and allowing them to offer better services to their customers while reducing risk management and operational costs.
“However, security is also paramount to drive adoption. In some critical installations – like water processing plants, medical devices, alarm systems and factories – security and protection from hacking, data loss and downtime are all crucial. The fundamental ingredients enabling M2M to realise its potential are also reliability and confidence,” he adds.
According to Frost & Sullivan, 2012 is likely to witness massive adoption of M2M globally, however it may not be very impressive due to certain restraints. “Firstly, majority of the industrial applications such as smart metering and remote monitoring require a huge amount of customisation and M2M has not been seen as a scalable opportunity yet. Secondly, cost is seen as one of the major impediments to the adoption of M2M as the end users must be able and willing to pay for this value addition,” says Jonas Zelba, Research Analyst, Information and Communication Technologies Practice,Middle East and North Africa, Frost & Sullivan.
Frost & Sullivan expects M2M adoption to be driven by MNOs. Zelba says M2M provides new revenue opportunities for operators in the saturated mobile markets. While information technology and network capabilities enable M2M deployments, the applications will come from the industry verticals. Furthermore, as technology becomes more compact, lower priced, and more power-efficient, the cost of the modules and devices may decrease, driving the number of innovative applications.
Industry experts say legislation on a global scale will further drive the adoption of M2M, such as the use of M2M in automotive emergency calls with eCall and ERA-GLONASS (aimed at saving lives and increasing road safety); CO2 reduction through smart metering and grid control, stolen vehicle recovery for insurances and intelligent traffic systems with eTolling.
An array of apps
One vertical where M2M is poised to take off is the health industry as a multitude of devices are implemented to constantly collect health data from patient and consolidate it back into cloud solutions. By way of example, machine to machine to person (M2M2P) technology could be used in an e-health context to wirelessly connect patients’ pacemakers or blood pressure monitoring devices to a consolidation point which then feeds data into health software through which doctors could observe the patient’s health remotely and over time.
While M2M’s diversity of applications is of great value, this same flexibility also poses a challenge in the creation and standardisation of efficient transport mechanisms—particularly over different types of wireless networks such as UMTS, WiMAX and LTE,” says Ghattas.
Furthermore, the industry chain can be complex and needs a powerful integrator. If you’re looking at a public transportation network, for instance, it may impact areas beyond transportation including environmental protection, public security, insurance, vehicle maintenance, and so on. To manage these systems and make M2M financially viable for the individual players involved, the industry chain will need stronger integration solutions.
“Right now M2M solutions are generally running on proprietary platforms but we predict a shift from vertically integrated and closed solutions to a layered, open approach. While M2M communications are already being utilised in certain regional markets and verticals, there is definitely room to grow as more widespread applications are deployed in 2012,” Ghattas adds.
Some of the verticals that are expected to represent greatest business opportunities globally are healthcare, transportation and logistics, government (smartcities / connected cities), utilities (across value chain of oil and gas to consumption of electricity and gas at premise by end consumers) and telecoms, according to Frost & Sullivan.
According to the latest analyst reports there are approximately 5.3 million known wireless connected devices in the Middle East and it is expected to grow exponantially to reach to the levels of hundreds of millions. “We see that applications like fleet management in transportation as well as ATM/POS connectivity in financial services industry are widely adopted accross the region today. However, there will be differences from country to country depending on their unique requirements. For example, in Turkey, where the cost of energy is high and there is high dependency on energy imports, adoption of smart meters in utilities as well as building energy management solutions present a good number of opportunities,” says Kemisgil.
Whereas in GCC countries, we see increasing demand for solutions addressing the oil and gas industry, as well as mHealth solutions due to the increased spending on healthcare as a result of increased wealth as well as transition from government funded healthcare to private healthcare. Furthermore, in countries like Sudan and Egypt solutions addressing agriculture industry from livestock management applications to sensors on crops and greenhouses, present growth opportunities. Finally security and surveillance solutions are in demand due to growing security concerns accross the region, he adds.
The emergence of 4G/LTE is expected to accelerate M2M adoption. 4G/LTE will certainly help in accelerating M2M adoption as LTE network is becoming a prerequisite for M2M adoption. When mobile operators upgrade their old infrastructure to 4G/LTE, they will have the opportunity to implement technology that enables new levels of service, efficiency, and economy. Frost & Sullivan expects a dramatic growth in M2M applications enabled by LTE,” says Zeba.
Kesimgil from Ericsson agrees: “4G/LTE will open up new opportunities for M2M applications, which otherwise would not be feasible. However, the majority of the M2M connectivity is still based on 2.5G (and some 3G), since there are a lot of applications with little bandwidth and latency requirements.”
Data bursts
The greater adoption of M2M may have a significant impact on the service provider networks. The uncertainty of M2M traffic coupled with the impact on already growing bandwidth demand from the service providers requires service providers to have a bandwidth strategy for M2M.
“The main challenge telecom service providers may face due to M2M traffic is understanding capability of treating data traffic. This relates to the possibility of monetising traffic for third party revenues or ensuring the security of data and data storage or shaping for different data transmission tiers,” says Zelba.
M2M data can be communicated over any regular medium although it is going to generate a tremendous amount of data traffic. This is why MNOs in particular are getting serious about this space.
“In most applications there will be short bursts of data at regular, short intervals. Therefore when millions of devices are going on an off-line to carry short bursts of data, it becomes impractical to allocate IP address in the regular dynamic way. The overhead is far too high. Therefore the devices are given a static address, with data often being transported over a secure VPN,” says Ghattas.
MNOs are just one player–albeit an important one–in the value chain. As indicated earlier, most MNOs have played an indirect role in the development of M2M applications; their role has been that of a bit pipe. The key link in the value chain is the middleware platform and the companies who have created a platform in order to provide a managed, secure, wireless data service, he adds.
Despite a slow start, advances in M2M technology have occurred internationally during the past year. In April last year Ericsson signed an agreement to acquire Telenor Connexion’s machine-to-machine (M2M) platform, in an effort to get more technology and know-how in the growing sector.
This year, Qualcomm has released a low-power 802.11n radio chip designed for embedded machine-to-machine wireless communications for smart building and smart appliance applications.
The new chip, from Qualcomm’s Atheros division, is aimed at a burgeoning market for wireless machine-to-machine (or M2M) communications, to network a wide array of battery-operated sensors, consumer electronics, meters, medical monitoring gear and other devices. Applications include smart energy, the “intelligent home,” security and surveillance, building automation, and remote health monitoring.
M2M represents both a new set of uses for mobile technology and a new source of revenue for mobile operators, and the Middle East telecom service providers need to aggressively invest in this area.
