Proving the Business Case for the Internet of Things

Cellular M2M devices in use to grow at least threefold by 2019: Ericsson

Iain Morris
June 5, 2014
The number of cellular M2M devices in active use is expected to grow by three or four times by 2019, from a figure of about 200 million at the end of 2013, according to the latest research from Ericsson.

A mixture of declining costs, improved coverage, more capable radio technologies, regulatory mandates and the growing rates of successful applications and business models are spurring the development of the industry, according to the Swedish network equipment maker.

Ericsson (Stockholm, Sweden) also says that average M2M device penetration is around 2% of data subscriptions among measured networks, but as high as 20% for those operators with a particular focus on M2M.

Most M2M devices are still GSM-only, which marks a contrast with other device types using more advanced technologies.

In North America, for instance, almost all devices now use 3G or 4G connectivity, and so the only GSM devices still in active use tend to be for M2M services.

A similar situation is likely to develop in Western Europe over the next two or three years.

Ericsson says one reason for this is that the cheapest GSM modules are still GSM-only, and low prices are essential for companies generating very little average revenue per user from M2M subscriptions.

Moreover, many current M2M applications do not require high network speeds and typically have long lifecycles.

A smart meter – for instance – may be intended to last for up to 20 years, when smartphones are often replaced every two or three.

Despite this, Ericsson expects GSM’s share of total M2M connections to fall from about 64% currently to just 30% by 2019.

By 2016, it says, 3G and LTE will be the dominant M2M technologies, with LTE M2M device penetration reaching more than 20% in 2019, up from just 1% today.

Although M2M communications represent only a small share – around 0.1% – of total cellular traffic in terms of bytes, the traffic share will increase as LTE M2M devices and more powerful processors are included in high bandwidth and low latency-demanding applications, such as consumer electronics, vehicles and billboards.

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