The coming flood of connected devices! Are the carriers ready?
Mobile Network operators (MNOs) are in a very good position to capitalize on the Embedded Mobile devices opportunity that includes Machine-to-Machine (M2M) communications. We are already seeing major operators including Verizon, AT&T and Vodafone investing significant resources into their emerging devices and M2M groups.
Moreover, pricing of the embedded mobile device components (particularly the RF chips that enable connectivity of devices) are coming down. Because of this we are seeing a number of device OEMs jumping into capitalize on the opportunity of connected devices and their potential for new, innovative product lines.
With existing network infrastructure, can the carriers support the coming flood of connected devices and the data traffic these devices are going to dump on their wireless networks?
Existing devices themselves are putting a lot of strain on Carrier Networks
With the growing number of smart phone users and the associated data applications, we need to realize that if carriers provide high speed connectivity coupled with “all you can eat” data plans, people are going to exploit it – and we are already seeing that happen with iPhone! Added to these smart phones, is the marketing push that carriers are giving to Data Cards and Netbooks. All of these are already creating significant strain on the carriers networks.
And now comes the flood of Connected Devices!
One of the key drivers of the M2M market is in itself the pervasiveness of the mobile broadband networks. But the growth in the number of devices that generate data traffic will create a strain on the carrier networks that may become unmanageable.
Are carriers ready?
In order to offset the growing load on their networks and support next generation services and devices, operators are investing in network upgrades to LTE and WiMAX. However, we all need to agree that the upgraded network’s ability to support faster data traffic will in turn drive more usage. This becomes like a “catch-22” for them. Carriers will need to effectively manage their operations and network capacity so as to allow as much number of devices as possible without having any negative impact on the quality of service they provide.
This is where carriers have started looking at alternative ways to offset the load on their data networks. Some of them have turned to Femtocells and others to Wi-Fi hotspots to dump data traffic from their heavily strained 3G networks. This will apply to M2M Embedded devices also. The device manufactures would need to start gravitating towards producing dual-mode radio modules for their embedded devices that leverage an alternative network if that is available without being heavily dependent on carrier’s data network.
Adding connected Devices on top of all the new M2M scenarios (that are being demonstrated and discussed) seems like a lot, especially when we're watching AT&T struggle to support the iPhone!
Are the carriers ready for the coming flood of connected devices? What are your thoughts?
Comments
Telecom infra has moved in steps and often overtaken the demand for bandwidth. Little doubt in my view that the industry will establish excess capacity.
Best, Arun Varma
Commented by: Arun Varma | February 23, 2010 5:52 AM
Thanks Arun! Agreed that in order to offset the growing load on their networks and support next generation services and devices, operators are investing in 3G and 4G build outs.
However, we all need to agree that the upgraded network’s ability to support faster data traffic will in turn drive more usage. And as more devices start connecting to the network, this growth will be only exponential.
Especially in a market where voice revenues are going down and Data services are becoming more critical to maintain ARPU, it will be interesting to see how Operators handle this growth. New business models like Usage-based billing for Data may not be too far away.
Commented by: Sandeep Chandrasekar Seshadri | February 24, 2010 2:10 AM