Vodafone Australia going after M2M market

On 10 September Vodafone Australia is holding a press briefing "Machine-to-Machine – Vodafone insights on adoption, growth and future markets" at which it promises to look at "the global [M2M] landscape based on insights from Vodafone’s M2M Adoption Barometer 2014" and share "new Ovum research, commissioned by Vodafone, [that] will more closely examine expectations for the Australian market." This could be the one area where Australia's beleaguered number three mobile player can gain an edge on Telstra and Optus.

Vodafone Group was an early entrant into the global M2M market. In January 2009 it launched a global machine to M2M service platform to help companies deploy and manage large, wireless M2M projects, supported by a team charged with growing the company’s M2M business worldwide The move came from Vodafone Global Enterprise, a business unit set up in 2007 to serve the mobile communications needs of multinationals across multiple countries.

That initiative appears to have paid off. In June Machina Research, a UK based company that claims to be "the world's leading provider of strategic advice on the newly emerging M2M, IoT and big data markets" published its annual review of the M2M operations of the major global telcos, saying that Vodafone had taken the top spot.

The report's author, Matt Hatton said: “Vodafone’s scale, growth and customer wins are testament to its ongoing lead in the sector. If we just look at the numbers, this year it overtook AT&T and Verizon to become the biggest global M2M provider, in terms of SIMs. It was also the fastest growing of the fifteen we studied."

He added: "We’re not just counting numbers of connections to determine current, or future, success. We expect initiatives such as its SOBE product, its plans for licensing the GDSP platform, and the added bonus of funds from Project Spring to provide further impetus in the next few years.”

SOBE (Simple Out-of-Box Experience) is designed to make it easier for users of smart devices to sign a prepaid data contract on the fly. For example, the Amazon Kindle Fire come equipped with Vodafone's SOBE technology. GDSP (Global Data Services Platform) is an online service designed to help Vodafone clients manage all their M2M connections and activate, block and disable devices. Project Spring is a global network investment program.

In a further move into the M2M market, Vodafone Group announced in July that it would expand its long-standing partnership with Japanese telco, NTT Docomo, to include the delivery of M2M services to global enterprises. However the two gave no details of their new collaboration.

Also in July Vodafone announced plans to acquire Italian company Cobra Automotive Technologies, a provider of security and telematics products to the automotive and insurance industries. Vodafone said the move was in line with its strategy to expand its M2M capability beyond connectivity. “Cobra’s telematics products and expertise will enable Vodafone to provide a more comprehensive range of end-to-end services to automotive customers.”

So back to the 10 September event. I guess we'll have to wait until then for Ovum's research on the Australian M2M market but Vodafone's barometer was published in July. The headline is that the percentage of companies saying that they are using M2M has grown by over 80 percent since Vodafone's first study a year ago. Vodafone says: "Over a fifth of companies that we spoke to already have at least one M2M-based solution in place. Fifty five percent of organisations that we talked to said that they expect to have an M2M solution in place within two years."

Vodafone's success in the M2M market will be good news for NetComm Wireless (ASX: NTC). In October 2012 it signed an agreement with Vodafone Global Enterprise to supply M2M modems, saying: "This is an ongoing supply agreement and the size of revenues will directly relate to the success that Vodafone has in securing M2M contracts."