Wireless network availability is an essential factor for the future development of machine-to-machine (M2M) connections in the production and social development sectors of Latin America. Based on information provided by Machina Research to 4G Americas, there were 14.6 million M2M links in the region in 2014, a figure expected to reach 158.9 million by 2024.
Given this outlook, M2M applications have huge potential in those sectors that can benefit from mobility. Such as the automotive and healthcare industries. According to Machina Research, connected cars will remain the largest segment by volume and market share between 2014 and 2024, growing from 8.5 million to 101.4 million connections, which represents 58.5 and 63.8 percent market share, respectively, in Latin America.
Workplace and daily life is the other sector expected to see significant growth, from a total of 2.5 million M2M connections in 2014 to 35.3 million by 2024. Analysts predict that this growth will be reflected in market share, which is expected to jump from the current rate of 17 percent to 22.2 percent in the next 10 years, landing this segment in second place in terms of volume. Connected healthcare and cities are also promising sectors for growth in terms of M2M solutions.
These figures, which are growing thanks to the evolution of the Internet of Things (IoT). Place mobile carriers and infrastructure providers in conflict with fledgling businesses or startups that have emerged to take advantage of newer alternative technologies and business models specifically designed for M2Ms, as well as other non-consumer uses.
Despite this issue, mobile carriers pitch themselves as essential to IoT connectivity. To that end, they are offering 4G LTE technologies or even the future 5G, expected to debut in 2020, which will leverage different versions of LTE still under development, among other things. Many companies, however, disagree with this stance and claim that other wireless technologies are more suitable for this type of connectivity.
In this context, the struggle for market share is gradually becoming more evident as new products are launched. This happens precisely because, while traditional mobile networks evolve to meet the high data usage demands of smartphones and tablets, other IoT-oriented devices require neither high bandwidth nor a continuous connection. These devices are mostly made up of sensors, which may require access every few days or weeks, and could even remain in place for many years without human intervention.
Many of the startups that threaten to steal part of carriers’ market share were present this year at the Consumer Electronics Show (CES), the world’s biggest consumer technology tradeshow, in Las Vegas. Ingenu, for example, is a company that offers an RPM-based service, a technology specifically designed for M2Ms. During a CES panel session, John Horn, Ingenu’s CEO, stated that most IoT devices do not have a lot of data needs. Furthermore, he argued that most traditional mobile networks are not suitable for IoT because they are not cost-effective. The building, installation of antennas and radio base stations, which are key for mobile networks, is a viable approach for mass market use in large urban centers. In contrast, many IoT applications, such as soil moisture sensors or silo temperature sensors, are being deployed in unpopulated regions. Networks with low data transmission capacity, which can be built in a quick and cost-effective manner, are more suited to these areas. If carriers do not adjust to this reality, they will most certainly be fighting a losing battle.
The truth is that IoT is generating an extraordinary array of devices and services. This is why users of IoT services will require a variety of options for devices and technologies that carriers alone will not be able to provide. The IoT boom will call for business models that vary significantly from current plans, which are based on the amount of data and voice used. Carriers will either have to reinvent themselves or settle for just a piece of the pie.