Smarter Cities The Key Driver Of M2M In Latin America

Machine-to-machine (M2M) technology is in its early stages of development in Latin America; however, the sector is beginning to generate interest from mobile operators, governments and M2M hardware and solutions companies. Collaboration between the three will help to see the number of M2M connections rise from millions to billions over the next 10 years and 2014 has begun to see the makings of this. At present, the region lags more developed markets. Global M2M hardware manufacturer Digi  International, reports that revenues from Latin America amounted to USD1.6mn in the quarter ending April 2014, accounting for 3.5% of total revenues. This was far below North America at USD27.4mn, USD11.9mn in EMEA (Europe, Middle East and Africa) and also the Asia Pacific region which was USD5.0mn over the same period.

Mobile Operators' 4G Investments

In Telefónica's Q114 report, the company stated that it had 4.502mn M2M connections in Latin America, up by 49.5% from 3.011mn in Q113. This figure still represents just 2.4% of its 185mn mobile subscriptions; however, this number is expected to grow rapidly over the next decade to surpass its mobile customer base. Telefónica has a presence throughout the whole region and claims to have M2M subscriptions in all of its country operations, including less developed markets in Ecuador and throughout Central America. Mobile operators have been investing huge amounts in 4G LTE infrastructure in Latin America. 4G subscriptions are expected to grow at a steady pace while incomes improve and the cost of technology comes down. M2M connections can also utilise these networks and begin to immediately recoup some of this investment providing motivation for mobile operators to foster M2M partnerships and contracts.

Brazil To Remain Regional Leader
Telefónica M2M Connections By Market ('000), Q114

Machine-to-machine (M2M) technology is in its early stages of development in Latin America; however, the sector is beginning to generate interest from mobile operators, governments and M2M hardware and solutions companies. Collaboration between the three will help to see the number of M2M connections rise from millions to billions over the next 10 years and 2014 has begun to see the makings of this. At present, the region lags more developed markets. Global M2M hardware manufacturer Digi  International, reports that revenues from Latin America amounted to USD1.6mn in the quarter ending April 2014, accounting for 3.5% of total revenues. This was far below North America at USD27.4mn, USD11.9mn in EMEA (Europe, Middle East and Africa) and also the Asia Pacific region which was USD5.0mn over the same period.

Mobile Operators' 4G Investments

In Telefónica's Q114 report, the company stated that it had 4.502mn M2M connections in Latin America, up by 49.5% from 3.011mn in Q113. This figure still represents just 2.4% of its 185mn mobile subscriptions; however, this number is expected to grow rapidly over the next decade to surpass its mobile customer base. Telefónica has a presence throughout the whole region and claims to have M2M subscriptions in all of its country operations, including less developed markets in Ecuador and throughout Central America. Mobile operators have been investing huge amounts in 4G LTE infrastructure in Latin America. 4G subscriptions are expected to grow at a steady pace while incomes improve and the cost of technology comes down. M2M connections can also utilise these networks and begin to immediately recoup some of this investment providing motivation for mobile operators to foster M2M partnerships and contracts.

Brazil To Remain Regional Leader
Telefónica M2M Connections By Market ('000), Q114

Brazil stands out as the largest market for M2M, reaching 8.7mn M2M connections in Q114 and has since surpassed 9mn connections in May 2014. Between Q113 and Q114, the Brazilian M2M market grew by 20.5%. Telefónica through its Brazilian subsidiary Vivo, is the second largest provider with 30.4%, behind América  Móvil's Claro, which has a share of 42.9% as of Q114. Brazil will clearly remain the primary battleground for M2M in Latin America, as its larger population and market size creates superior opportunities for M2M.

Government Initiatives Focus On Smarter Cities

Furthermore, in May 2014, the government approved two decrees that would see a significant reduction in the rate of tax on M2M SIM cards, which will provide a further boost to the Brazilian M2M market amid ( see 'Tax Cuts Will See M2M Enter High Growth Period', May 9 2014). The government has taken further measures to increase M2M adoption by passing a resolution to ensure that by 2015, all new vehicles produced for the domestic market must have M2M devices installed and a separate resolution requiring energy distributors to give customers the option of installing smart meters.

M2M growth will rely heavily on government initiatives to create smarter cities over the next few years with connected devices for consumers a longer term trend. M2M requires a highly developed mobile network infrastructure, preferably 4G LTE, in order to send large quantities of data at high speeds. It also depends on consistent power supply, as well as the presence of data centres and highly developed cloud computing systems. In Latin America, these needs will exist in urban cities over the next three years or so, meaning government M2M initiatives and operator developments will be targeted towards these areas. Therefore, we would expect to see M2M growth in areas such as smart meters, digital signage, telecare, remote monitoring, mobile payments and connected cars. Aside from Brazil, the next M2M markets in Latin America include Mexico, Chile, Colombia and Argentina, consistent with figures from Telefónica. For example, Office of the Mayor of Lima began the Lima I/O Project, which monitors the environment in real-time in areas such as Ultraviolet Radiation, noise pollution and concentration of dust in the air in Peru's capital city. Additionally, in Santiago, Chile, TAG is used for automatic payments on the motorways and connects to security cameras and other devices to facilitate easier transport.

M2M Solutions Providers Looking To Enter The Region

M2M providers are looking to enter the region and have partnered with leaders Telefónica and América Móvil in varying capacities in order to realise these opportunities. Jasper  Wireless has emerged as the preferred partner for América Móvil, providing its M2M platform in Brazil in February 2013, and more recently for the operator's M2M launch in its Argentina, Paraguay and Uruguay subsidiaries. Outdoor advertising company JCDecaux, teamed up with Telefónica to create a range of M2M-powered advertising platforms for urban environments across Latin America and Europe. Comarch announced in July 2014 that its BSS solutions have been chosen by an unnamed US-based communications provider for the launch of services in Brazil. Outside of mobile operator partnerships, French company Michelin acquired Brazilian truck fleet management company Sascar in June 2014 for its telematics capabilities.

Read the full article

×

Enter your details to read the full article

By submitting this form you are acknowledging that you have read and understood our Privacy Policy.