As we reported recently, there is strong motivation for mobile operators to add value to M2M propositions through an approach modelled on how Amazon colonised the retail community and led through platform innovations. Recent research adds to this debate by arguing that flexible pricing is a key element of any M2M strategy.
This is because not all bytes are equal. While it’s true that many M2M applications are concerned only with the exchange of relatively simple data without particularly stringent transmission or latency demands – and hence such services are unlikely to command premium prices, it’s also clear that many other applications will be both more data hungry and have much stricter demands, allowing operators to create tiered and premium revenue streams from M2M applications.
Premium M2M applications will require differential treatment and priorities. This means that operators need to have the capabilities to service such applications and to understand how the needs of different applications and verticals will evolve.
What’s interesting is the suggestion that fixed-rate pricing is a short-lived approach. In the long-term a customised model is likely to dominate in M2M markets. Even more interesting is the recognition that roaming is going to be more important – operators with global coverage will be able to meet demands across multiple countries and continents. Of course, local conditions will vary, so they will be faced with the challenge of ensuring consistent, reliable service even where conditions are sub-optimal.
All of which means that operators are going to have to address the end-to-end aspect of M2M communications in a more sophisticated way. To deliver solutions that have flexible pricing, with consistent quality across multiple markets will require additional tools, including the ability to prioritise and sort M2M traffic before it reaches the network. As M2M devices can be expected to have a long service life and must have minimal operating costs, operators need to plan ahead to consider how to deliver the best M2M experience for their customers.
They can’t see how the market will evolve, necessarily, but they can ensure that they deploy solutions that cater for changing demands and requirements from day one. After all, since not all bytes are equal, they can’t afford to miss the opportunity to capture the most valuable.