ROI Potential of M2M Services Rises with Sector-Specific OSS

Kfir Dan-Ari, director, M2M marketing, Amdocs

Kfir Dan-Ari, director, M2M marketing, Amdocs

March 8, 2012 – Network operators’ efforts to get their arms around ways to monetize what is widely seen as an emerging opportunity in machine-to-machine applications may have just gotten a bit less daunting.
In a sign that service providers worldwide are getting serious about the M2M potential Amdocs has released a pre-packaged, pre-configured OSS solution that allows service providers to quickly engage with specialists offering applications such as smart utility meters, connected electrical vehicle management and health monitoring. A horizontally extensible operations template for enabling execution across myriad verticals is essential to making economic sense out of a low-ARPU market segment that depends on high volume to drive ROI, says Kfir Dan-Ari, director of marketing for M2M at Amdocs.

“According to our understanding of the market, network service providers need to go to a dual strategy,” Dan-Ari says. “One involves enabling end-to-end operations support in response to market segments with low ARPU that are better served by specialists, and the other identifies those specific verticals where there’s an opportunity to generate higher returns with their own self-branded services.”

In the latter category are connected-home solutions that many service providers have begun to offer (see July, p 14) and which Amdocs is supporting with its own cloud-based solution, such as remote security, energy, health and multimedia. As also reported in the July issue (p. 8), such out-of-the-box services considerably reduce service provider development times and back-office investment costs.

Amdocs’ M2M operations support system is designed to support both scenarios at the back-office level. “Our strategy says, here’s a generic solution where you can plug in every M2M partner no matter what their focus is, and you can also offer your own dedicated vertical solutions on top of that,” Dan-Ari says.

M2M is a generic term encompassing a field so vast that operators would have a tough time trying to set up specific business models and third-party relationships to accommodate the needs within each category. Yet the market is too big to ignore.

By2014 the global revenue from M2M services for service providers will hit $4 billion, according to market research reported by Amdocs. A big piece of this will be tied to use of wireless networks, where the global M2M connection count will jump from 135 million in 2011 to 2.3 billion by 2020, according to Machina Research.

From a bandwidth perspective, M2M cellular traffic will grow 22-fold from 2011 to 2016, at which point it will account for five percent of all mobile data traffic, according to Cisco Systems’ recently released Global Mobile Data Forecast. “We see the growth mostly in North America and the Asia Pacific region,” says Thomas Barnett, senior manager of service provider marketing at Cisco.

Barnett says high-bandwidth scenarios for M2M include business and consumer security, health care, inventory and fleet management and telematics. Where fleet management is concerned, cellular will be the mainstay for vehicle communications in the field while Wi-Fi is likely to be used to transmit data in loading areas. Telematics includes low-bandwidth applications such as trip assistance, navigation and vehicle management but also broadband-to-the-car where content is transmitted to vehicles via cellular and transferred inside via Wi-Fi.

“But the key for service providers isn’t so much the traffic but the numbers of connections themselves,” Barnett says. “In M2M the volume of connections is more of an issue along with having to support a whole plethora of specialized devices. Optimizing for the best experience is one of the major challenges.”

If that challenge can be met, reasons Amdocs, the M2M floodgates will open for service providers. “We see so many lines of business with very different characteristics and more coming along every day,” Dan-Ari says. And in many cases, he adds, there are new entities emerging to handle the details of implementing these verticals in partnership with service providers.

One example of how specialized things can get can be found in the telematics business pursued by Orga Systems, which supports service providers in designing flexible and high value-added services and solutions. One area of focus is cargo management, says Yasmin Yaqub , marketing manager at Orga Systems.

“Orga’s solution makes use of an on-board unit which manages not only the wireless communication to a service center but also GPS-supported navigation as well as the monitoring of cargo with the help of a cargo bay unit,” Yaqub says. “Depending on the type of cargo, various sensors can be utilized to monitor temperature, vibration, pressure, position or other factors.”

With such highly focused applications emerging across the planet for every conceivable niche, service providers have a lot to choose from. “Maybe a service provider won’t want to tap into an M2M niche like agricultural devices or specific smart metering, but some other niches may look like attractive opportunities with partners or for their own vertical service development,” Dan-Ari says. “You have to have the flexibility to choose what makes sense for you and act on those opportunities quickly and with minimal set-up costs.”

The new Amdocs platform can support multiple dynamic business models including converged, prepaid and postpaid across complex M2M value chains associated with a wide variety of services and huge volumes of devices, Dan-Ari explains. The system provides configurable partner templates for tariff plans, business processes, access profiles and user-interfaces to enable rapid onboarding and support of M2M partners.

The solution is also highly flexible, allowing service providers to change business processes, portals and tariff plans in a matter of minutes, Dan-Ari adds. The solution alleviates service providers’ costs by transferring common operational aspects to M2M partners, with self-management tools for ordering, provisioning and trouble ticketing.

To make all this possible Amdocs has devised a three-layer solution. “The top layer is what we call the partner portal,” Dan-Ari says. “This is where the M2M partners manage all their apps and operations. They activate orders and de-activate them, watch their bills and see alerts coming from the network, including quality issues and fraud detection. This is where they open trouble tickets.”

The next layer is wholesale management, which is the set of tools service providers use to create an engagement with an outside partner. “We provide some reconfigurable templates for different aspects of the engagement, such as dedicated UIs, business processes and access profiles,” Dan-Ari says.

The third layer provides the network interfaces with HLR (home location register) and myriad other elements essential to authentication, mediation, provisioning and other essential functions.

“We know M2M is not an opportunity without risks,” Dan-Ari says. “But hopefully we’ve taken steps that minimize risk to the point that service providers can find ways to monetize the opportunities to maximum effect.”