China set to dominate M2M globally as its home efforts lead the way June 12 2014
The GSMA notes "the M2M market is growing rapidly, with the number of connections set to reach a quarter of a billion this year, accounting for 2.8% of all global mobile connections, double what it was in 2010. China is at the forefront of this growth. It is a country with the world's fastest-growing economy and is now the world's largest M2M market with 50 million connections (up from 11 million in 2010), putting it ahead of the US (32m) and Japan (9.3m) combined - a number that is set to grow exponentially."
The GSMA believes that the technology is key to the future, saying that "M2M is transforming the world around us, making our lives, homes and cities smarter and more efficient with a never-ending stream of real-time actionable data, whether it's smart meters monitoring our energy use or remotely checking patients with chronic diseases."
The GSMA reports that as of January this year, 428 cellular operators in 187 countries had launched M2M services. In 2010 there were 74 million global M2M connections comprising 1% of total global SIM connections, but now there are 242 million global connections accounting for 3% of all global SIM connections - a CAGR of 35%.
Developing economies have now surpassed developed economies in the share of total M2M connections, rising from 48% in 2010 to 52% in 2014. The fastest growing region worldwide was Asia (54% CAGR), then Latin America (43% CAGR) and Africa (42% CAGR).
But the rapid growth of M2M in Asia is largely due to the actions of China, the largest M2M market in the world by some way. With its strong government support for IoT projects, as well as Government ownership of the three largest telecom and mobile operators, it's no great surprise to find that China is leading the way in M2M adoption, given that "its sheer size offers economies of scale not available to smaller countries."
The Chinese government still actively supports IoT R&D, earmarking the industry as a development and investment priority in 2011. It is set to invest $603 billion in the M2M ecosystem by 2020, as part of the 12th Five Year Development Plan (2011-2015).
The three state-owned mobile operators - China Mobile, China Telecom and China Unicom - are all "experiencing tremendous growth, particularly in the agricultural, healthcare, automotive, retail and consumer electronics sectors and the country's rapidly expanding middle class."
The report quotes Alex Chau of Machina Research, who says that 180 million smart meters have been deployed in China, with a further 60 million planned. Haihua Li of the China Academy of Telecommunications notes that 26 Chinese provinces had deployed electronic toll collection systems, used by 5.1 million drivers. M2M systems are extensively used in Chinese freight transportation, monitoring the condition of perishable goods that are moved around the country by train.
219 Chinese cities had announced smart city rollouts by February 2013, aimed at tackling urban congestion and traffic flows in the dense metropolitan environments. Another uniquely Chinese approach is the 343 pollution management centers are used to monitor 15,000 contamination sources in real-time.
China Mobile is the largest MNO in the world, with 767 million connections as of the close of 2013. It is also the largest M2M operator, with 32 million connection at the end of 2013 (up 10 million in one year). In 2010 it launched its dedicated IoT wing, out of which arose its proprietary Wireless Machine-to-Machine Protocol. Although using the protocol allows manufacturers easy access to the vast China Mobile network, surely open standards are vital to the future of IoT. It will be interesting to see how the GSMA reconciles proprietary technology with its policy of creating a single common M2M specification.
China Telecom is the largest fixed line operator in China, with 156 million lines in 2013, and the third largest MNO, with 186 million mobile connections. It began constructing an IoT platform in 2007, working on system integration and constructing a purpose built lab in 2011. It manages 800,000 security cameras under its Mega Eye business, as well as 700,000 active subscribers for its Chinese version of the GM in-vehicle OnStar service.
China Unicom is the second largest telco in China, with 88 million fixed-line subscribers, and is also the second largest MNO, with around 281 million mobile connections. In 2013 it handled 10 million M2M connections, with global partnerships with Cubic Telecom (to link Cubic M2M devices using its cellular network), remote healthcare monitoring with Beijing Municipal Health Bureau, as well as a number of automotive partnerships for fleet management and IVI systems.
If China can turn its hand to exporting its wealth of M2M and IoT experience, the native suppliers could easily become dominant outside China as well, a move that is probably about to start happening this year.