You may know all about the internet, a world of bits and bytes formed from the interactions of people and machines. But are you ready for the ‘internet of things’, a network where machines talk to each other? Using the wireless modes that we now use for communication such as GPRS, wifi, 2G, 3G and LTE networks, machines are increasingly blipping bytes to each other. You could get your home appliances to do your bidding even when you are out of the house. At another time, a pacemaker could warn you about an odd heartbeat and the nearest hospital.
It is this internet of things that will be key to the data strategy of telecom operators in India. Buffeted by regulations, corruption and punishing margins in voice, telecom operators can’t wait to increase their revenue from data usage.
In their arsenal are machine-to-machine (M2M) services that will eventually make machine internet a reality. Setting aside the science-fiction connotations, M2M applications are growing roots across the world. Some countries are mandating the use while others are adopting these ad hoc. India, though lagging, could catch up fast if telecom operators can get their pitch right.
|IN A NUTSHELL
Telecom operators can’t wait to increase their revenue from data usage. Here’s how they are looking to gain the early mover advantage
According to the independent wireless analyst firm Berg Insight, the most significant market development in 2011 was the breakthrough of cellular M2M communication in Asia-Pacific. The number of M2M subscribers in the region increased by 64 per cent to reach approximately 34.5 million, fuelled massively by China with a base of about 21 million. The EU and the
US have about 30 million and 27 million respectively. Berg noted that South Asia and Southeast Asia were still at an early phase of adoption with few M2M subscribers in countries like India.
Najib Khan, chief marketing officer (enterprise services), Bharti Airtel, says that the early adopters will be enterprises because of the problem-solving nature of M2M services. For the machines to transmit information over long distances, they will need a SIM card to ride the airwaves over long distances. This makes the role of the telecom operator in M2M services indispensable.
Operators as consultants
M2M communication has been enabling automation, control, information relay and analysis of that information for those who adopt it. Indian consumers are still some time away from a smart home that is being enabled by some of AT&T’s applications such as security camera monitoring, remote door locks and home appliance controls that would get mapped on smartphones. Before consumers in India can dream of smart homes like the $113 million one that belongs to Bill Gates, it will be enterprises that will be the early adopters. M2M services which increase efficiency and solve business problems are what telecom operators are banking on to fuel their consultancy bids.
When donning their problem-solving hats, the operators don’t want to be just network providers but end-to-end solution providers to businesses. M2M will be their way to bring in empirical data for analytics and monitoring that companies can use to get answers to operational and even strategic problems. The ensuing automation will cut out errors and manual labour at the same time.
However, the adoption has been scattered so far. For now, metre reading, surveillance, vending or other point of sale machine systems, remote monitoring and fleet tracking are the first set of M2M services being put to use. In India, M2M is restricted to vehicle tracking and metre-reading. These are not even a blip on the evolution of M2M services. “You can do this on SMS and don’t need end-to-end strategies for these,” says Navin Chopra, director, Vodafone Business Services.
Udit Shanker, CEO, TeleDNA, an M2M application provider, says, “Most of the applications in M2M today are still pull-based. People have to pull information relayed by machines. True M2M conversations are those which are automatically pushed for perusal and need no human intervention.” Adds Ashish Gulati, country manager, Telit Wireless Solutions, a global provider of M2M modules and services, “Monitoring and smart metering have been deployed over the last five years. For now, radio cabs, asset tracking by logistics companies and even point-of-sale use of handheld devices by microfinance, courier and retail agents are what M2M is being used for.”
Not only is M2M being used for the most basic of purposes in India, it is yet to get critical mass. And volume is what this segment will survive on. Chopra says that M2M implementation does away with manual intervention and errors, saving costs and manpower. However, it will be volume-driven.
Sridhar Pai, founder and CEO of Tonse Telecom, a telecom and M2M research company, says “The data traffic from one SIM generated by M2M is very little. Only when devices are wired up on a large scale will M2M services yield substantial revenue.”
“Metre-reading using M2M would be one relay of info or ping an hour per million customers. Otherwise, just a staid once-a-month metre-reading will provide the utility company with no additional knowledge. Hourly pinging by metres gives the company data to understand how the city uses its electricity every day which it can correlate to its boilers and generation,” Chopra adds.
It is the need for volume that is driving telecom operators to approach it as a part of their enterprise business. “There will be companies who will come to us for connectivity alone, but the real value for us from M2M will come when we can provide analytics, when we can work with system integrators and device manufacturers to provide consulting beyond wireless connectivity,” points out Chopra.
For Airtel, M2M is a big part of its MATES (mobile application tools for enterprises) strategy. There are applications that are hosted at the customer’s end. It has already seen 10-15 per cent of its B2B data revenues generated by its M2M assignments in the last three years. Applications are in the realm of automatic metre reading, mobile finance, point-of-sale or vending machines and vehicle tracking. To convince its clients, it has enabled complete M2M services at all its towers that monitors fuel consumption and also prevents theft. It is one of the advanced uses of M2M — telemetry — which can monitor any product out on the field, from gensets to vending machines.
Some of its functional M2M services include managing Bangalore Traffic Police’s database of vehicles and traffic violators on smartphones given to all 650 officers. As a result data from two million cases can be pulled out in two minutes. With the Odisha State of Road Transport Corporation, Airtel has installed vehicle tracking and a passenger information system within the buses for commuters, all operating through SIMs.
Vodafone will look to enabling push M2M services in the long term. “The M2M conversations could feed the client’s SAP system to generate diagnoses,” Chopra says. Take visi-coolers used by soft drinks companies. Today, most FMCG companies can track these fridges that provide in-store branding and preserve their product’s shelf life at the retailer’s. “But it is only the tip of the range of possibilities,” adds Chopra.
He cites how M2M between the company’s backend server and a device in the fridge can indicate how many times the door is opened or the fluctuations in temperature as a result of that. “Imagine the feedback that the beverage company can give to its fridge provider — it can ask for anything from sturdier door frames to compressors better suited for the region. In short, such empirical data can lead to more relevant customisations,” Chopra explains. Instead of being just cost centres, these machines from all over the country can help the company operate more efficiently. The SIM devices can be retro-fitted on the devices as well.
Vodafone is turning to its international repertoire to preempt M2M demand in India. BMW, for example, uses Vodafone’s M2M analytics for remote car diagnostics and even concierge services.
Chopra says, “We happen to be one of the leaders in M2M best practices, with a 200-strong team stationed in Germany that work on M2M applications, run the platform, develop new services, roadmaps, evolution curve, and relevance in different countries.” Vodafone India then wants to bring in this team’s consultancy mindset and the understanding of M2M to the country. Just like BMW, car manufacturers in India too could look at M2M to get around the challenge of operating a wide service network in India. SIM-enabled cars could alert the manufacturer’s service centre about, say, a vehicle overheating in far-out places. The vehicle user would then get a message asking her to pull over and pour water in the radiator, avoiding a bigger crisis. Gulati says, “Telematics in M2M would combine not just navigation but information relay about the vehicle’s health as well.”
Vodafone has already started developing a platform to be unveiled by the end of October. For Vodafone, it will provide a dashboard to maintain the M2M set-up of the clients and remotely diagnose any problems in the SIM-enabled machines. This is where the billing and customer service will also be hosted. “The platform can tell clients if they need to send a person to fix the machine at all,” says Chopra.
Tata Docomo spruced up its non-voice services last year with people in both the central and circle offices. The team would activate mobile payments, remote diagnostics, mobile education — different uses that M2M can be put to. “One can either use a SIM or NFC (or near field communication is the next generation short-range high frequency wireless communication technology which enables the exchange of data between devices build with this technology) for such interactions,” says Sunil Tandon, head, non-voice services, Tata Teleservices.
In some developed markets, there are other wireless solutions such as ZigBee etc for smaller areas. Tata Teleservices is conducting focus groups to understand the needs of the market. The sectors such as BFSI, manufacturing and BPO have remote surveillance needs which it would address first. Tandon says that remote diagnostics by which doctors can be informed about a patient’s vital statistics and as a result, warn the patient of any irregularity would be an area it would concentrate on as well. Like Vodafone, it is putting in place a platform to integrate billing systems and manage features to support the internet of things.
Survive in an ecosystem
Any internet carrier can enable an M2M ecosystem. For those that need SIM cards, mobile operators are the most important link in the chain. But device manufacturers and software companies are also indispensable. Airtel works with 25 software vendors to customise applications. Khan of Airtel points out that original equipment manufacturers such as white goods brands would need to embed chips or SIM into their products to enable such an environment. Chopra says, “Even for B2C M2M applications, I will still have to talk to the equipment providers.”
Gulati of Telit Wireless Solutions says Telit hopes to play a bigger role because M2M communications need different capacities and products from man to machine interactions. It recently bought Calixto Solution, a Bangalore-based electronics product enablement company, to develop applications for both the B2B clients and retail consumers. “The infrastructure is already in place. So stakeholders need to invest at the product level. We are waiting for more and more machines to join the wireless network,” says Gulati. TeleDNA is one such value-added service provider for telecom operators which is readying a framework or a platform for those operators that might not have a proprietary one. The server or platform deployed at the operator’s end would handle both billing and customer service, says Shanker of TeleDNA. But network speeds will also play a role, something that 4G and LTE might redefine for India, he adds.
The telecom operators can’t wait for the rollout of the next wave of technology. M2M and enterprise solutions provide an assured stream of revenue according to experts. “It binds them to the solution provider because it manages more than just the network,” says Shanker. Chopra of Vodafonei agrees: “M2M pitches will have to be made to the CXOs of a company because they have to see its relevance for their business and not just one function. We want to be in the consultancy space, because it allows us to have more conversations for services rather than negotiations. The relationship with such end-to-end solutions reduces the need for churning out.” Vodafone will bank on its global enterprise clients to deploy M2M solutions once its platform is ready.
While sales force, logistics and metre-reading are often traffic-based revenue models, providing M2M as part of their enterprise solutions will allow operators to either sell the platform and system to the clients as a capital investment and charge for annual maintenance or rent out their back-end platform for the daily running of the systems they put up for the client.
Till then consumers can get an idea of the things to come with the help of smartphone applications such as the just-launched Chirp by a British developer that allows links to be shared via sound on a phone’s loudspeaker. The stated objective of the founders: to enable anything that carries sound to carry data such as doorbells, saxophones, car horns and so on.