IoT Billing, M2M

Working Through the M2M Value Chain

Communications Africa Magazine

By Nir Asulin, CEO, FTS
Issue 1, 2013

Machine-to-machine communications is a growth market with huge potential: the largest European, American and Asian-Pacific operators are currently in the process of deploying M2M platforms and services. Operators worldwide have recognised the potential of M2M as a great source of new revenue as voice and data services become saturated and average revenues per user stagnate.

In Africa, the use cases for M2M are many and varied because of the nature of continent: there are many rural areas without good infrastructure where M2M communications can help improve services such as healthcare, utilities and others.

For example, M2M technology is being used by rural medical clinics to wirelessly receive HIV test results of expectant mothers within days of testing, allowing infected mothers to begin anti-retroviral drugs much earlier and therefore decrease the risk of transferring the virus to their babies. M2M is also being used to tackle diabetes, which affects over 7.5 million adults in Africa, with regional governments and healthcare organisations working with equipment manufacturers to make mobile monitoring devices and applications to help with treatment.

As the M2M market begins to develop in Africa, operators and the other players in the M2M value chain will need to consider their back-end services and support systems so that they can fully take advantage of M2M opportunities in the region.

Why M2M is different

It is important to bear in mind that the M2M sector is characterised by high-volume, low-value transactions: M2M is about automating activity and driving down costs. As a result, M2M providers’ costs, including their billing costs, must also be kept low. Machine-to-machine billing therefore requires a different approach in order to meet the specific character of the sector, with providers able to respond quickly and easily to its requirements and innovation with new deals, services and pricing.

A billing system that is straightforward to maintain and low cost to alter will enable operators to meet the challenges that M2M billing presents. The combination of many industries and many business models, managed by one M2M platform, means that operators need to be extremely versatile in supporting all business models and various partner settlements within complex value chains.

In order to meet the growing and rapidly-changing demands of the market, M2M billing platforms need to support recurring and usage-based payments and micro-payments and be built around tiered pricing, usage-based fees, time-based charging and real-time management of balances. M2M billing should fully integrate with existing billing platforms with minimal hardware or functional modifications and reduce operational costs by automating the entire M2M process so that operators can counteract the low-value transaction nature of M2M.

Implementing a billing solution designed for M2M is a worthy investment for Africa’s operators. Service providers can easily and effectively configure pricing and rate plans on-the-fly and without incurring expensive change requests, so innovative business rules can be introduced at the speed of marketing.

The future of M2M in Africa

Whilst M2M does have a future in Africa, it is currently not yet clear what that future will be. As with the examples already explored, healthcare is one industry that will benefit noticeably from M2M communications, connecting rural areas to medical centres. As the utilities market develops, too, expect to see smart electricity and water meters. And in the incredibly successful adoption of mobile money in Africa, there is sometimes crossover with M2M technologies and operators stand to benefit greatly with the combination of both technologies.

Another area of growth potential for M2M billing is IPTV. For many people, monthly TV packages are too expensive. With the arrival of fibre on the continent IPTV becomes a reality. Smart set-top boxes with embedded SIMs will enable people to access TV on a pay-as-you-watch basis; paying with their phones to activate the service and only paying for what they use. Hotels are already employing this technology, letting guests download programmes or applications from set-top boxes enabled with SIMs.

In the not-too-distant future, the potential and possibilities that the M2M industry presents for Africa’s telecoms operators will become clear. When and how this huge future market will take off is as yet uncertain but when it does, M2M will prove itself an exceptional revenue generator for operators and of huge benefit to the African people.

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