According to ABI Research, revenues for cellular M2M communication services will rise from approximately $2 billion in 2006 to more than $8 billion in 2012. A new study by the firm describes a landscape of cellular M2M service providers that shows increasing variety in its business models. Their research identifies three classes of providers, each offering a different mix of capabilities. Traditional mobile network operators (MNOs), mobile virtual network operators (MVNOs), and a small number of specialized M2M mobile operators (MMOs) will all see challenges and opportunities.
Some MNOs, traditionally offering handset-based voice and data services, are now directly entering the M2M market. Traditional MNO encounters problems when they enter the M2M market directly. A cellular voice customer ARPU might be in the $50 to $70 per month range, whereas the M2M services ARPU might be just $5 to $15 per month. This is where MVNOs enter the picture. They depend wholly on infrastructure provided by MNOs, focus on aggregating both supply and demand, and match multiple networks to multiple customers. They have organized their processes and operations around serving lower-ARPU markets.