Wireless M2M Connections to Grow by 25.6%

According to a new research report from the analyst firm Berg Insight, 1.4 percent of the mobile network connections worldwide were used for wireless machine-to-machine (M2M) communication at the end of 2009. The shares in the EU and the US were 2.4 percent and 4.3 percent respectively. In the next five years, the total number of wireless M2M connections is forecasted to grow at a compound annual growth rate (CAGR) of 25.6 percent to reach 187.1 million connections in 2014. By the same year M2M as a share of the total number of cellular connections is projected to reach 3.1 percent.

“The global wireless M2M market has felt the impact of the economic downturn in the past year”, said Tobias Ryberg, Senior Analyst, Berg Insight. “Hardware manufacturers have suffered from shrinking margins as volume growth has flattened out at the same time as prices have continued to fall. Network service providers have fared better and still enjoy high growth for M2M connections even if the rate of increase has slowed down in several markets.” He points out that M2M is now starting to generate substantial revenue streams for large operators despite of the typical monthly ARPU of just a few euros.

Berg Insight anticipates that 2010 will be a positive year for the global wireless M2M market with hardware shipments returning to growth and a continued increase in the number of network connections. New M2M initiatives launched by major mobile operator groups are expected to have a positive influence on demand, stimulating new large-scale projects. Regulatory developments are predicted to have a major impact on the telematics industry. The EU is expected to propose formal legislation for the introduction of eCall by 2014 but in Brazil the fate of Resolution 245 is more uncertain. Another significant development to watch will be the progress of the Dutch government’s plans to introduce a nationwide electronic road charging system for all motor vehicles.

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