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IHS: Cellular M2M boosts VAS market

Posted: 10 Jul 2013     Print Version  Bookmark and Share

Keywords:IHS  value-added-service  cellular M2M  Internet of things 

The signifcant growth of cellular machine-to-machine (M2M) connections in the coming years will allow the market for associated value-added-services (VAS) to rise by a factor of seven and reach Rs.54,347.83 crore ($10 billion) by 2017 from Rs.8,152.17 crore ($1.5 billion) in 2012, according to IHS.

The VAS market represents an array of business and technical services that complement managed cellular connectivity and application platform services. These services enable application developers, service providers and corporate adopters to create, deploy and manage cellular M2M applications.

The growth of the VAS market in this area will be driven by the boom in cellular M2M connections. Global M2M cellular connections are expected to rise to 37.49 crore by 2017, expanding at a CAGR of 26.5 per cent from 9.14 crore in 2011.

“The next Internet wave will be the M2M revolution, where almost anything—from an automobile, to a shipping container, to home electricity meter—can become a part of a vast network,” said Sam Lucero, senior principal analyst for M2M & Internet of things at IHS. “Cellular communications will play a key role in in this new era of the ‘Internet of things,’ serving as the glue that connects hundreds of millions of nodes together. However, the cost and complexity of developing, deploying and operating cellular M2M applications is daunting, leading increasing numbers of companies to outsource cellular M2M application development, deployment and—in many cases—operation, to VAS providers.”

Beyond the complexity of M2M, other factors are driving companies to adopt VAS solutions for M2M applications.

For one, many companies would prefer to focus on core business issues, rather than the integration of embedded cellular connectivity into new or existing applications. Furthermore, many developers or adopters lack the internal expertise to create or deploy an application that integrates cellular connectivity using entirely in-house resources. Also, the willingness to partner on the part of different cellular M2M VAS providers is helping to bring comprehensive VAS offerings to market. In addition, communications service providers (CSPs) want to increase their share of revenue in the M2M value stack, causing them to launch VAS offerings.

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