The Global M2M/IoT Communications Market – 2nd Edition

The Global M2M/IoT Communications Market analyses the latest trends and developments in cellular M2M and low power wireless networking.

This strategic research report from Berg Insight provides you with 180 pages of unique business intelligence including 5-year industry forecasts and expert commentary on which to base your business decisions.

Highlights from the report:

360-degree overview of the M2M/IoT communication ecosystem.
Update on the adoption of NB-IOT and LPWA standards for M2M/IoT networking.
Reviews of the M2M/IoT strategies of leading mobile operators.
Summary of industry trends in all world regions.
Statistical data on cellular M2M subscribers in all world regions.
Extensive global and regional market forecasts lasting until 2021.

This report answers the following questions:

How will the global cellular M2M market evolve over the next five years?
What are the main drivers behind growth in major regions and industries?
What is the status of cellular M2M in emerging markets?
What are the leading global mobile operators’ strategies for the M2M/IoT market?
How much revenues did leading telecom groups generate from M2M/IoT in 2016?
How will LTE-M and NB-IOT transform the cellular M2M market?
What is the outlook for emerging low power wireless networking technologies?


Executive summary

Berg Insight estimates that the global number of cellular M2M subscribers increased by 30 percent during 2016 to reach 398.1 million at the end of the year – corresponding to around 5 percent of all mobile subscribers. Until 2021, the number of cellular M2M subscribers is forecasted to grow at a compound annual growth rate (CAGR) of 26.2 percent to reach 1,274.8 million at the end of the period. During the same period, cellular M2M network revenues are forecasted to grow at a compound annual growth rate (CAGR) of 26.0 percent from € 6.7 billion in 2015 to approximately € 21.4 billion in 2021. Meanwhile the monthly ARPU is expected to remain stable at around € 1.40.

The global cellular M2M market is diverse, shaped by the economic conditions in different parts of the world. Europe and North America are the most advanced regions in terms of adoption. At the end of 2016, the number of M2M subscribers per 1,000 people was approaching 200. In absolute terms, Europe (EU28+2) was the larger of the two with an estimated 95.5 million M2M subscribers in Q2-2016, compared to North America’s 62.5 million. Japan and South Korea are notably behind the Western countries in the adoption of cellular M2M with 103 and 85 connections per 1,000 people respectively.

China, Brazil, Russia, South Africa and Turkey are leading adopters of cellular M2M among the world’s major emerging economies. While China already has the largest installed base of an estimated 118 million M2M devices in Q2-2016, the relative adoption rate is still half of Europe and North America at 86 connections per 1,000 people. Brazil and Russia had around 55 connections per 1,000 people each, corresponding to 11.6 million and 7.8 million M2M subscribers respectively. South Africa and Turkey are the most advanced markets in the Middle East & Africa region with 5.3 million and 3.5 million M2M subscribers respectively at the end of Q2-2016. The South African market is highly advanced with a relative penetration rate of 96 per 1,000 people, which is higher than China and South Korea and almost equal to Japan. As the Western markets continue to grow at a high rate, there is every reason to believe that the cellular M2M markets in the rest of the world will sustain very high growth rates in the foreseeable future. In addition, India and South East Asia offer a very large and still mostly untapped potential.

The cellular IoT technology landscape is in a phase of transformation. GSM/GPRS is gradually losing its grip on the market, making way for 3G and 4G technologies. WCDMA/HSPA has emerged as a major technology in the past years through a combination of the phase out of 2G services in markets such as Japan, Australia and the US and the evolution of more bandwidth-demanding applications. 3G technology is however already being pushed aside by 4G for high-end applications. The availability of LTE CAT-1 and CAT-M will lower the threshold for migration from 2G to 4G in advanced markets. The trend will accelerate when NB-IoT devices start to appear in volumes by 2018. 2G will however remain as the main option in emerging markets where NB-IoT is unlikely to become widely available before the mid-2020s. By 2021, Berg Insight believes that 4G will account for 80 percent of global shipments of cellular M2M/IoT devices, with a relatively even distribution between highspeed CAT3+, mid-range LTE-M and low-end NB-IoT. 2G devices based on GPRS will account for the remaining market share, while 3G will almost have disappeared. CDMA is currently having a short revival as a low-cost alternative in the North American market but will also demise when the last US 2G networks approach their end of life.

The principal financial metrics for M2M and more recently IoT has until recently been projected, not actual, revenues. Berg Insight believes that the absence of actual revenue figures in a market is a strong indicator that it has not yet reached maturity. Therefore, the fact that some of the world’s largest mobile operators now disclose M2M/IoT revenue figures is an important milestone showing that the market has entered a new phase. Verizon, Vodafone and Telefónica, whose combined share of the global installed base of cellular M2M devices is 15–20 percent, reported an aggregate sum of nearly € 1.4 billion in M2M/IoT revenues for the first nine months of 2016. If representative for the industry as a whole, the figure suggests that the total yearly revenue contribution from M2M/IoT to the world’s mobile operators was approximately € 11 billion in 2016. The indirect value was even higher as many telecom operators have sizable system integration businesses which are key partners in customer IoT projects.

About the Author

Tobias Ryberg is co-founder and principal analyst responsible for the M2M research series. He is an experienced analyst and author of numerous articles and reports about IT and telecom for leading Swedish and international publishers. All major vertical market segments for Wireless M2M/IoT have been his major research area for the past 13 years.

Berg Insight offers premier business intelligence to the telecom industry. We produce concise reports providing key facts and strategic insights about pivotal developments in our focus areas. Berg Insight also offers detailed market forecast databases and advisory services. Our vision is to be the most valuable source of intelligence for our customers

Executive summary
1 M2M/IoT networking and technologies
1.1 Cellular M2M/IoT from 2G to 4G and beyond
1.1.1 2G/3G mobile networks
1.1.2 4G mobile networks
1.1.3 LTE-M and NB-IoT
1.2 LPWA and satellite technologies
1.2.1 LoRa
1.2.2 Sigfox
1.2.3 Ingenu
1.2.4 Satellite technologies
1.3 Cellular and LPWA technologies in the IoT market
1.4 IoT devices in cellular networks
1.4.1 Cellular IoT modules and hardware
1.4.2 SIM solutions and embedded UICC
1.4.3 IoT connectivity management platforms
1.4.4 IoT application enablement platforms
1.5 International coverage and alliances
1.5.1 Roaming and international coverage
1.5.2 Mobile operator alliances
2 Europe
2.1 Regional market trends
2.1.1 Western Europe
2.1.2 Regional market trends in Western Europe
2.1.3 Central Eastern Europe
2.1.4 Russia & CIS
2.2 Mobile operators
2.2.1 Vodafone
2.2.2 Deutsche Telekom
2.2.3 Telefónica
2.2.4 Orange
2.2.5 Telenor
2.2.6 3 Group Europe
2.2.7 EE
2.2.8 Jersey Telecom
2.2.9 KPN
2.2.10 Megafon
2.2.11 MTS
2.2.12 POST Luxembourg
2.2.13 Proximus
2.2.14 SFR
2.2.15 Telecom Italia
2.2.16 Swisscom
2.2.17 Telekom Austria
2.2.18 Telia Company
2.2.19 Tele2
2.2.20 UtilityConnect
2.2.21 Vimpelcom
2.3 M2M managed service providers
2.3.1 Com4
2.3.2 Cubic Telecom
2.3.3 Eseye
2.3.4 Sierra Wireless
2.3.5 Stream Technologies
2.3.6 Telit
2.3.7 Wireless Logic
2.3.8 Others
2.4 LPWA networks
2.4.1 LoRa networks
2.4.2 Sigfox and network partners
3 The Americas
3.1 Regional market trends
3.1.1 United States and Canada
3.1.2 Brazil
3.1.3 Rest of Latin America
3.2 Mobile operators
3.2.1 AT&T
3.2.2 Verizon
3.2.3 Sprint
3.2.4 T-Mobile USA
3.2.5 Rogers Communications
3.2.6 Bell Canada
3.2.7 América Móvil
3.2.8 Vivo and Telefónica Latin America
3.2.9 Other mobile operators in Latin America
3.3 M2M managed service providers
3.3.1 Aeris Communications
3.3.2 KORE Telematics
3.3.3 Numerex
3.4 LPWA networks
3.4.1 LoRa networks
3.4.2 Ingenu
3.4.3 Sigfox and network partners
3.4.4 Silver Spring Networks
3.5 Satellite networks
3.5.1 Orbcomm
3.5.2 Iridium
3.5.3 Inmarsat
3.5.4 Globalstar
4 Asia-Pacific
4.1 Regional market trends
4.1.1 China
4.1.2 Japan and South Korea
4.1.3 Australia and New Zealand
4.1.4 Southeast Asia
4.1.5 India and South Asia
4.2 Mobile operators
4.2.1 China Mobile
4.2.2 China Unicom
4.2.3 China Telecom
4.2.4 Softbank
4.2.5 NTT Docomo
4.2.6 KDDI
4.2.7 SK Telecom
4.2.8 Reliance
4.2.9 Singtel
4.2.10 Telstra
4.3 LPWA networks
5 Middle East & Africa
5.1 Regional market trends
5.1.1 Middle East
5.1.2 Africa
5.2 Mobile operators
5.2.1 Etisalat
5.2.2 FastNet
5.2.3 Ooredoo
5.2.4 MTN
5.2.5 Turkcell
5.2.6 Vodacom
5.2.7 Zain
5.3 LPWA networks
6 Market forecasts and trends
6.1 Geographic markets
6.1.1 Global market summary
6.1.2 Europe
6.1.3 North America
6.1.4 Latin America
6.1.5 Asia-Pacific
6.1.6 Middle East & Africa
6.2 Vertical markets
6.2.1 Connected cars are here and soon they will be autonomous
6.2.2 International consolidation and growth in the fleet management industry
6.2.3 Governments and utilities leverage IoT to address critical challenges
6.2.4 POS terminals is a key application category in emerging markets
6.2.5 Is the time ripe for IoT to break into the consumer market?
6.3 Technology trends
6.3.1 2G is still thriving as 4G replaces 3G
6.3.2 NB-IoT gets a warm reception from the mobile operator community
6.3.3 LoRa takes early lead in the alternative LPWA race
6.4 Industry trends
6.4.1 Mobile operators reveal financial metrics for IoT
6.4.2 Successful vertical market plays are key to revenue growth
6.4.3 Tier-1 mobile operators and managed service providers enable global IoT
Glossary
Index
List of Figures
Figure 1.1: Comparison of LTE-family cellular technologies
Figure 1.2: Comparison of LPWA and satellite technologies
Figure 1.3: Examples of network operators deploying LoRa
Figure 1.4: Sigfox network operators by country
Figure 1.5: Cost comparison for IoT technologies
Figure 1.6: Examples of cellular IoT modules
Figure 1.7: Top wireless module vendors, by revenues and shipments (World 2015)
Figure 1.8: Comparison of SIM form factors
Figure 1.9: Mobile operators supporting GSMA Embedded SIM, by region (Q1-2016)
Figure 1.10: IoT connectivity platform selection by mobile operator (Q2-2016)
Figure 1.11: Application platform and network operator partnerships (Q2-2016)
Figure 1.12: Mobile operator M2M/IoT alliances (Q2-2016)
Figure 2.1: Europe M2M connectivity market data (Q2-2016)
Figure 2.2: Western Europe M2M connectivity market data (Q4-2015)
Figure 2.3: France cellular M2M market connectivity data (2013–2016)
Figure 2.4: UK cellular M2M market connectivity data (2013–2015)
Figure 2.5: Germany cellular M2M market connectivity data (2014–2016)
Figure 2.6: Spain & Portugal cellular M2M market connectivity data (2013–2016)
Figure 2.7: Benelux cellular M2M market connectivity data (2013–2016)
Figure 2.8: Nordics cellular M2M market connectivity data (2013–2015)
Figure 2.9: Europe non-domestic cellular M2M market connectivity data (Q2-2016)
Figure 2.10: Central Eastern Europe M2M connectivity market data (Q4-2015)
Figure 2.11: Russia & CIS cellular M2M market connectivity data (2013–2016)
Figure 2.12: Telefónica M2M subscribers by country (2014–2015)
Figure 2.13: Financial data for Telenor Connexion (2011–2015)
Figure 2.14: LoRa network operators Europe (Q4-2016)
Figure 2.15: Sigfox network partners in Europe (Q4-2016)
Figure 3.1: The Americas M2M connectivity market data (Q2-2016)
Figure 3.2: US cellular M2M market connectivity data (2012–2015)
Figure 3.3: Brazil cellular M2M market connectivity data (2013–2016)
Figure 3.4: Estimated number of M2M subscribers in Latin America ex. Brazil (H1-2016)
Figure 3.5: Telefónica M2M subscribers in Latin America by country (2013–2016)
Figure 3.6: Satellite network operators by M2M subscriber base (Q2-2016)
Figure 4.1: Asia-Pacific M2M connectivity market data (2016)
Figure 4.2: Japan cellular M2M market connectivity data (2012–2016)
Figure 4.3: M2M subscribers by application category (South Korea, June 2016)
Figure 4.4: Planned LPWA network rollouts in Asia-Pacific (November 2016)
Figure 5.1: Middle East & Africa M2M connectivity market data (Q2-2016)
Figure 5.2: Turkey cellular M2M market connectivity data (2013–2016)
Figure 5.3: Planned LPWA network rollouts in Middle East & Africa (November 2016)
Figure 6.1: Key regional markets for cellular M2M (Q2-2016)
Figure 6.2: Monthly ARPU data for cellular M2M by country (2015/2016)
Figure 6.3: Cellular M2M subscriber forecast, by region (World 2015–2021)
Figure 6.4: Cellular M2M network revenue forecast, by region (World 2015–2021)
Figure 6.5: Cellular M2M communication market forecast (Europe 2015–2021)
Figure 6.6: Cellular M2M communication market forecast (North America 2015–2021)
Figure 6.7: Cellular M2M communication market forecast (Latin America 2015–2021)
Figure 6.8: Cellular M2M communication market forecast (Asia-Pacific 2015–2021)
Figure 6.9: Cellular M2M communication market forecast (MEA 2015–2021)
Figure 6.10: Cellular M2M communication market forecast, by vertical (2015–2021)
Figure 6.11: OEM telematics attach rates in new vehicles, by region (2015/2020)
Figure 6.12: Top 25 international providers of fleet management solutions (Q1-2016)
Figure 6.13: Projected smart meter penetration in key markets (2023)
Figure 6.14: POS-terminal installed base in key emerging markets (World 2015)
Figure 6.15: Cellular IoT device shipments, by network technology (World 2015–2021)
Figure 6.16: Mobile operators piloting or deploying NB-IoT in 2017/2018
Figure 6.17: Top 10 mobile operators by M2M subscriber base (World Q2-2016)
Figure 6.18: Reported IoT revenues for major operators (2016)

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