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Summary:

AT&T and Verizon Wireless are using the CES stage to tout M2M services such as wireless health care and connected entertainment systems. And the home will be a key focal point for such businesses as 4G networks come online.

The nation’s two largest carriers are using this week’s CES stage to push their machine-to-machine (M2M) offerings in a big way as operators increasingly look to the space as a source of new revenues. Verizon Wireless is teaming with 4Home, a home control services provider, to demonstrate 4G services such as residential monitoring, home health and media management, showcasing ways consumers can use their phones to keep tabs on the home front. The offerings will be powered by Verizon’s LTE network, which will be deployed in 25 to 30 U.S. markets by the end of the year.

Meanwhile, AT&T today launched a site designed to help manufacturers of emerging devices bring their AT&T-connected wares to market more quickly. The carrier hopes to expedite the deployment of connected consumer devices such as e-readers and digital photo frames as well as potential residential apps like meter-reading and security.

The two efforts underscore the importance of M2M revenues for carriers, which are facing eroding margins from voice and network-congestion problems from consumer mobile data services. The technology exists to support many such offerings today, and bandwidth for M2M services will ramp up dramatically as 4G networks come online in the next few years. The carriers face a major challenge in building complicated new business models to leverage the space — a home health service, for instance, might require a revenue-share agreement between the health care provider, the equipment manufacturer and the network operator. But as cellular moves far beyond phones into a host of devices, it’s becoming increasingly clear that the home will be a crucial component of M2M revenues as 4G networks are deployed.

Image courtesy of Flickr user DeclanTM.

  1. At the advent every generation of wireless technology, we have seen a hype around M2M technologies. But the success stories are far and few in between. Fundamentally, majority of the M2M applications do not need high bandwidth. Secondly, the cost of building and rolling out customised M2M devices specific to each application does not invariably justify the business benefits of real time access to information. Finally, (as you point out) defining the equitable share amongst the players has proven difficult. So there are reasons for moderating our expectations.

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