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2G M2M more trouble than it's worth

As operators look to machines to drive the next wave of growth in mobile connections, Analysys Mason recently urged players to think carefully about the wireless technology on which to base their M2M services.

"The decisions we take today could create long-term problems," said Ian Streule, senior specialist at Analysys Mason.

He warned attendees during a panel session at Mobile Asia Congress last week that opting for 2G embedded modules now would likely increase the total cost of ownership of M2M systems for operators going forward.

"2G is low-cost, mature, reliable and good enough for now, but it could constrain operators' long-term network strategies," particularly for operators that plan to decommission their 2G networks and refarm the spectrum for 3G mobile services, he said.

Streule forecast that an operator switching off its 2G network in 2020 could expect the cost of replacing its 2G M2M modules to reach around $175 million.

"Embedded modules have a life expectancy of up to 25 years," he added. "The total cost of ownership for 3G [M2M] is almost always lower than for 2G."

Meanwhile, Telecom Italia highlighted during the same panel session some of the issues operators have to address when it comes to rolling out M2M services.

"We've had M2M for around 12 years in Italy – we were one of the first European countries to have smart metering," said Roberto Saracco, head of Telecom Italia's future centre.

He explained that although rolling out M2M drives up the number of mobile connections, it also causes the revenue per connection to fall.

"If we faced our investors and told them we have increased the number of connections but our ARPU has dropped dramatically, they would kill us," he said.

Saracco also cautioned that some M2M services will likely span international borders, which will inevitably drive up the cost for operators and their customers.

"Operators are usually very geographically located, but usage is no longer constrained by geography," he said.

Источник: Total Telecom

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