The Italian Communications Authority (Autorità per le garanzie nelle comunicazioni – “Agcom”) published its survey on M2M (see also here the full text of the survey and our previous posts). Agcom confirmed that connected cars are dominating the scene, with almost half of the mobile M2M connections, although smart city, smart logistic and smart home applications will remain more profitable.
There are very interesting data that can be gathered (based on mobile M2M connections). First of all, according to Agcom in 2014 there were globally 200 million M2M connections. Should a 20% growth trend be confirmed, this means that by 2017 there will be more than half billion connected devices.
As for Europe: Italy, France and UK hold similar quota of M2M connections, although the Scandinavian countries hold a higher share if compared to the overall mobile connections (see below a 2014 market snapshot from the Agcom survey).
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As for Italy: it is confirmed a significant increase in the M2M connections (see below a 2019 market snapshot from the Agcom survey), although the vertical segments remain very heterogeneous (e.g. connected cars to increase by 30% per year, with a much lower increase of smart city connections).
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The higher increase in the connected cars connections will not (necessarily) amount to an equal increase in the revenues. And here is another significant point to note: according to Agcom the value of the 2014 global M2M market is of 130 billion Euro, of which only 13 billion pertains to the connectivity (i.e. only 10%). This confirms a trend of an increasingly higher share of revenues being reserved to valued added services, to the detriment of the access costs.
The above data confirm a new arena for a TLC/OTT confrontation (similarly to what we experienced with the “traditional” audiovisual digital market). Those who are investing in infrastructures to address the additional connectivity demand may also want a higher share of the revenues that other parties are making by using the available connectivity, particularly if such third parties are providing services that are not considered within the current definition of electronic communication services (and accordingly are not subject to authorizations and, most of all, the associated interoperability obligations). This may well lead to a push towards more uniformity of regulations (with either more rules or a general deregulation), to be associated to all type of services that ensure the same type of communications, also with additional rules on connectivity access. There are obvious potential legal ramifications, and the future measures of Acgom (and other authorities) on this matter will be key to ensure the M2M growth.