M2M market big on promises, short on details

We have been promised a revolution in machine-to-machine communication, yet Canada’s biggest investors in this new ecosystem are surprisingly shy about their efforts.

Perhaps because the market is so new, or that companies don’t want to tip off their competitors, or maybe that the companies themselves aren’t making boast-worthy profits quite yet, but whatever the reason, hard numbers are hard to come by when it comes to M2M investment and returns at some of Canada’s big players.

M2M communication is already with us, providing the backbone for Hydro One’s smart meter system, smart parking meters that can direct drivers to empty spaces in Austin, Texas, and in tracking systems used by big logistics firms such as UPS and FedEx.

At the M2M Canada 2014 conference organized by the Canadian Wireless Telecommunications Association on Wednesday, Eric Simmons, the executive who heads M2M at Rogers Communications Inc., wouldn’t say how much money the company makes from his division. He wouldn’t give a definite number of how many employees they have, only that the number is over 100.

In January 2013, then-CEO Nadir Mohamed said Rogers would generate more than $100 million in revenue from its M2M business by 2015, according to a report from the Globe and Mail. Simmons declined in the interview to provide any new revenue information.

Simmons said in a presentation at the conference that the changes wrought by M2M would be equivalent to the industrial revolution. Yet revenues from the  revolution will not be publicized.

And Simmons’ circumspection isn’t rare.

Nauby Jacob is vice-president of products, services and content at BCE Inc.’s Bell Mobility subsidiary and heads its M2M operations. In a phone interview on Friday, he declined to give out detailed information about the company’s M2M investment.

“We put the information out there that helps people in making the decisions that they want to make, not necessarily help our competition make decisions,” he said. “Telling the world the number of M2M connections that we have doesn’t help our partners in any way. It’s not relevant information for them. And it’s certainly valuable information for our competition.”

Industry-wide numbers are hard to come by, as well. A study from IDC released in February found the world market for M2M to be worth $4.8 trillion. The Globe and Mail reported that formers Rogers CEO Mohamed said in 2013 that the market in Canada would be worth $4 billion over “the next few years.”

Even the companies don’t agree on how much the market is worth and who is taking the lead.

At the conference, Simmons said that Rogers had the dominant market share in the M2M market, representing more than 50 per cent.

Jacob, in the phone interview, said that Bell was the big player in M2M in Canada.

“I’m not going to get into a numbers game with the competition,” he said. “We are undoubtedly the leaders in machine-to-machine, let’s just leave it at that.”

Although the numbers are tough to get, promises are easy to come by.

Cisco, in a recent release trumpeting its $100-million investment in a new innovation centre, said the Internet of Things enabled by M2M will be worth $19 trillion US within the next 10 years—almost $3 billion more than the entire U.S. economy is worth.

Mark Henderson, president of Ericsson Canada, said at the conference on Wednesday that M2M would provide solutions for urbanization, dealing with a growing and urbanizing population, and climate change.

“It will be an extraordinary revolution, and it will come very quickly,” he said. “Disruptive business cases centred around wireless connectivity are arriving every day.”

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Everything telecom gets old eventually

It should surprise no one that numbers compiled by The Wire Report show TV subscriptions among major telecommunications companies dropped last year for the first time on record.

Our number crunching (for subscribers only) only confirmed what analysts said was already underway. The Internet — which most people have access to anyway, according to Statistics Canada — provides plenty of opportunities for video viewing, so that’s a big part of it.

What is also interesting is that subscription growth for both Internet and wireless services seems to be coming to a plateau. Internet subscriptions rose 2.6 per cent last year after growing 3.1 per cent in 2012 and 4.1 per cent in 2011. Wireless service subscriptions were up 1.6 per cent in 2013, falling from gains of 3.2 per cent in 2012 and 4.6 per cent in 2011.

Mario Mota, an analyst with Boon Dog Professional Services, speaking specifically of the Internet trend, called it a reflection of the industry being at “almost a saturation point in terms of what consumers want in terms of communications services to the home.”

It’s the unfortunate flipside to any service that proves to be a booming success; eventually, you run out of new people to sell to because almost everyone who ever was going to be a customer already is one.

Then eventually, for whatever reason — usually because some other product or service is making it somewhat redundant — that former game-changer starts to decline in popularity. We’ve seen it happening with home phones for some time. Wireless service works in most people’s homes, and there are also plenty of ways to make calls over the Internet. So why pay for a connection you don’t need?

This same mindset has started creeping in with TV distribution, for which web-based, over-the-top services can be a reasonable alternative for many viewers.

Telecom companies are doing their best to offset the incentives to get rid of your traditional services. For example, bundling deals often mean it’s not costing much more to keep that home phone if you’re getting TV, Internet and/or mobile service from the same company.

Broadcasters such as Shaw Communications Inc. and BCE Inc., which just happen to provide TV distribution as well, are increasingly populating their websites with TV content and making more apps available to watch TV on your mobile devices. Yet you typically have to subscribe to the channel they’re offering through a specified TV service provider to get access.

To their credit, they’re including other service providers besides the ones run by their parent companies, as outlined in the recent announcement about BCE’s TSN Go, which is available to Bell TV subscribers and those of Rogers Communications Inc.

The latest statistics show Internet and wireless subscriptions, while slowing, are not in decline. This is largely because newer services to replace the many conveniences Internet and wireless services provide have not yet been adopted on a large-scale basis.

One cannot help notice there is an increasing number of apps being offered that allow calls to be made from smartphones over data networks as opposed to cellular networks. Such is the case with BlackBerry Ltd.’s BBM software, which was recently upgraded to allow such “free calls” on Apple Inc.’s iPhones or those running on Google Inc.’s Android software. For those who spend a lot of time in WiFi hotspots, it might make sense to buy unlocked smartphones and use these apps for whatever voice communications you need to make.

Internet access, as it looks now, seems like a hard thing to replace. This only thing that could conceivably replace a home-based Internet connection is a wireless account, if you can tether your home-based equipment to your wireless device and get a plan that’s fast enough to make it worth your while and generous enough with data as not to make you bankrupt.

Nonetheless, for those involved in providing telecommunications services, who like to see big growth numbers from year to year, it’s getting close to time to invent the next big thing.

Derek Abma is editor of The Wire Report. He can be reached at dabma@thewirereport.ca.

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Web-based TV: here’s what I want

It seems inevitable that we’re moving down the path of making the web the main path for television transmission, and if we’re not, that’s an incredible waste of technology.

I’m ignorantly knowledgeable about such matters in the sense that I’ve been a journalist covering issues related to the evolution of the Internet on-and-off for more than a decade.

I’ll put it this way: I’ve listened and talked to a lot of people who know what’s happening in this field. Whether I truly understood what they were talking about is another matter.

But here’s how I’ve interpreted things. This thing called Internet protocol is really wonderful. Look what it’s done for the actual Internet. So, that kind of networking technology started being used to transmit voices over landline phone connections. Some of this has been marketed as VoIP (voice-over-Internet protocol), while much of it is used in the background for connecting for your everyday, vanilla home-phone service, and you might not even realize it’s happening.

The Internet then became the base for mobile apps and also a way of connecting you to your own personal cloud.

The web also seems to be having a big effect on how television service is consumed and sold, but there still seems to be a lot of wait-and-see.

If you have appropriate viewing equipment, a good Internet connection and a data plan that doesn’t cause you to go broke with overage charges, the web has the potential to be your primary source of television. For most Canadians who get television service from a company, that same organization also provides Internet connections. Chances are they are using some of the same networking technology to get both signals to people, even if it shows up as two different services on your bill, albeit bundled at a discount.

Wouldn’t it be great if Internet and television weren’t two different services? I realize it isn’t for those smarty-pants who do the OTT thing and can make it work reasonably well. But some of us want things to be out-of-the-box simple. And we don’t want to lose what we like about the current TV system.

I wish my Internet and TV service were one and the same. I’d like to save money, get access to a lot more programming including video-on-demand content, while not losing any of the channels or ease of use I experience with traditional TV service. Too much to ask? How about two out of three?

I would like to have access to television over the Internet in the simplest of terms. I wouldn’t mind if I was essentially logging on to different websites instead of changing the dial to switch channels, but I’d like to be able to do this on a big-screen TV so I don’t have to feel antisocial in my full house by viewing things on a computer, tablet or mobile phone. Converting URLs into numeric channels might be easier for those who are less digitized, such as some seniors.

It’s one thing to be to able download things and watch them at your convenience, but if there is some big event happening with global repercussions, and I want to be able to catch it on the news in an instant. It would be nice if I could log onto the CTV or CBC website and, because I’m making contact with a television, I’m instantly provided with a suitable video feed. I would like the same ease in tuning into a hockey game in progress.

I don’t think I’m asking for much. Many websites can tell if you’re logging on with a mobile device and adjust accordingly. It doesn’t seem like a stretch that a website could detect if you have a television hooked up and adjust the signal.

And there aren’t many TV channels that don’t have their own website, so this part of the equation shouldn’t be a problem either.

Broadcasting arms of companies such as BCE Inc. and Shaw Communications Inc. have recently been making more content available online, but much of it is for use by just those subscribing to certain TV service providers. Taking this incremental trend all the way, TV and Internet service becomes seamless. It’s just a matter of making it more user-friendly for your TV and your bill management.

Derek Abma is editor of The Wire Report. He can be reached at dabma@thewirereport.ca.

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