Wednesday, April 14, 2010 11:06:26 AM
Mobile networking looks to M2M apps for future growth
Apr 14, 2010 By: Richard Chirgwin
http://searchnetworking.techtarget.com.au/articles/40068-Mobile-networking-looks-to-M2M-apps-for-future-growth-
Mobile networking looks to M2M apps for future growth
With mobile adoption already beyond saturation, both carriers and vendors are keen to identify the user communities and applications able to drive the next phase of industry growth. Hence the industry’s new enthusiasm for he once-neglected machine-to-machine (M2M) market.
Five years ago, M2M was considered the poor cousin of the mobile network. Extremely rapid growth in mobile phone sales kept carriers focused on more lucrative customers and traffic types. A device that carried with it all the overhead of account management and billing, but which generated few calls and comparatively little revenue had little to offer carriers.
However, in developed markets such as Australia, there are now more mobile devices than people, and even with a growing number of “multi-SIM” customers (for example, individuals who own both a mobile phone and a 3G data device), there’s concern that consumer mobile growth will reach a saturation plateau.
For Ericsson, this leads to its faith in a world of fifty billion devices, in which most will be carrying M2M traffic for applications like smart metering, industrial controls – and others that the company expects to develop once the networks, services and devices are more widely available.
The growth in both traffic and devices that would be driven by adoption of M2M technologies and applications would also underpin the rollout and business models needed to drive new network technologies such as LTE+ / EPC (Long Term Evolution, and the Enhanced Packet Core).
By changing the way the technology behaves, the combination of these technologies far improves the viability of M2M applications for network operators. In particular, the always-on nature of the LTE+/EPC network means sessions do not have to be initiated (or tracked for billing purposes) for discrete communications.
Sierra Wireless is also tracking the possibilities of the M2M market. Dieter Dutronc, Sierra’s senior VP of global marketing, says his company sees the M2M market as offering the opportunity of more balanced revenue streams.
Product Life Cycle
He also told SearchNetworking that it’s a market with a more stable and less frantic product life cycle.
“The mobile broadband consumer product market has very short product life cycle – about six to nine months. M2M product life cycles can be three-to-five years.”
M2M applications have also changed over recent years. The typical application of three to five years ago was typically based on low volumes of small messages, but as the networks have developed, so have the applications.
“There are now applications that consume more bandwidth,” Dutronc explained.
For example, mobile systems are now being used to monitor the condition of Caterpillar heavy machinery. As Sierra’s A/NZ country manager Malcolm Thom noted, the value proposition for a wireless monitoring application is greatly enhanced when the system is taking care of “three million dollars of kit”.
Another emerging M2M market is in vehicular applications, with vehicle manufacturers looking at everything from service information through to vehicles able to initiate emergency services calls in the event of an accident.
Most of the proposed M2M applications (although, as shown by the Caterpillar example, not all), are low-ARPU (average revenue per user) apps that have a huge potential base.
With the enablers available and increasingly in deployment, network operators have “learned how to tackle low ARPU, high revenue markets,” Dutronc said.
New Network Architecture
Since the new mobile technologies are at least in part behind the new willingness to embrace M2M applications, it’s worth looking in a little detail at what these technologies change.
One of the most profound changes is in the mobile backhaul architecture. Unlike today’s mobile networks, LTE+ assumes that it will have a pervasive fibre-based Ethernet network interconnecting the base stations.
Colin Goodwin, Ericsson’s broadband strategy manager, is unequivocal: “As you go forward, the most effective way to build LTE is using carrier Ethernet” to connect the base stations.
A gigabit Ethernet network massively increases the capacity available between base stations, he said. In the M2M context, this means high bandwidth M2M applications would be able to co-exist with the expected growth in high-bandwidth end user data applications (as is noted in research data from Cisco, in its Visual Networking Index, the mobile broadband network is mirroring the fixed network in exhibiting high growth in video traffic).
This is coupled with radio interfaces (the “air interface” of LTE) that can support higher capacity between base stations and devices – although the greatest benefit in end user bandwidth will await a reorganization of mobile spectrum so that carriers can get access to contiguous 20 MHz carriers rather than the often-fragmented spectrum tolerated by today’s 2G and 3G networks.
Where the “right” kind of spectrum is available – four contiguous 20 MHz radio channels, for example – Goodwin expects LTE+ to achieve gigabit peak throughputs by 2014 (although, as with all wireless technologies, user throughput will depend both on the contention within individual cells, as well as on the packages carriers choose to offer).
So, certainly in the longer term, future mobile networks will easily have the capacity for data users as well as for M2M applications.
JL
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