3G and 4G - Not LPWA and 5G Technologies - Will Drive M2M Service Revenues on Cellular Public Networks to $228 Billion in 2024

The Top 10 Mobile Operators cellular M2M connection share to grow from 58% to 67% over the next 5 years

Oyster Bay, New York - 14 Aug 2019

The global cellular M2M market will nearly quintuple from over 620 million connections in 2019 to 3 billion connections in 2024 according to a new report by global tech market advisory firm, ABI Research. While connection revenues will double to US$32 billion over the forecast period, these revenues will account for just 14% of all cellular M2M value-added services revenues in 2024. To capture greater share of the M2M revenue opportunity, global operators must expand their horizontal capabilities, partner with vertical specialists, and move up the value stack.

“While many operators are hedging their bets on the emergence of new 5G and LPWA networks to expand their M2M endeavors, the reality is that in 2024 3G and 4G connections will account for 72% of total M2M value-added services revenues,” says Dan Shey, Vice President at ABI Research. “This result is partly due to the influence of connected vehicle markets which will heavily rely on 3G and 4G technologies; but it also reflects supplier focus on bringing full stack solutions to well serve very specific vertical markets.  Regardless of network technology, operators can gain greater share of value-added services revenues by formulating the right set of services and partnerships to create high-value end-to-end M2M solutions.”

Additionally, network operators need to realize how M2M revenue growth will change by type of M2M service and how fierce the competition is among network operators. Only a handful of operators have been able to generate annual revenues close to US$1 billion from their M2M activities, and they have done so by focusing beyond the device and its connectivity to the value that these connections generate through analytics and other platform services. Within this competitive and growing market, dominant players such as Vodafone, AT&T, and China Mobile have already emerged and established dominant footholds in their respective regional markets which will continue to expand throughout the forecast period. In 2019, the top 10 operators will account for about 3 out of 5 cellular M2M connections; in 2024, these operators will account for more than 2 out every 3 cellular M2M connections.  

“In order for cellular network operators to fully leverage M2M opportunities, they must undertake a critical assessment of their own internal capabilities and implement strategies that enable them to meet the demands of M2M end-users,” Shey advises. “To move up the value-chain, operators need to move past the underlying connectivity technology and establish dedicated M2M teams, partner with vertical specialists along the value chain, and deploy solution-based business models. By moving beyond simple connectivity, network operators can maximize the value of their networks and fully leverage solution opportunities that will eventually transition to LPWA and 5G technologies.”

These findings are from ABI Research’s  Global Network Operator M2M Market application analysis report. This report is part of the company’s M2M, IoT & IoE research service, which includes research, data, and Executive Foresights. Based on extensive primary interviews, Application Analysis reports present in-depth analysis on key market trends and factors for a specific application, which could focus on an individual market or geography.