Jürgen Hase: The automotive industry, smart metering and
e-health will be the first to adopt M2M, followed by industrial
In a period of just a few weeks, Deutsche Telekom has taken two
significant steps to promote the development of mobile
technology for machine-to-machine services.
First, the company launched its machine-to-machine marketplace
at the end of May, a platform for manufacturers and dealers
from around the world to offer their hardware, software, apps
and full-package solutions relating to machine-to-machine
Then, just a few weeks later, the company followed up with a
portal for developers of applications, to provide them with
application programming interfaces, programming guidelines and
software development kits.
But this are just the latest stages in a concerted effort by
Deutsche Telekom to position itself as one of the leading
innovators in what everyone now abbreviates to M2M. "Our M2M
competence centre is three years old at the end of this year,"
says Jürgen Hase, who is vice president of the Bonn-based
This started off with a feature called the "developer garden",
a portal which will play an important role in the integrated
"Over the last three years, developer garden has grown into a
successful hub for programmers," says Hase. "Over 7,000 users
are already active on the portal. We now want to continue this
success story and integrate our M2M developer community into
the developer garden portal."
Hase and his colleagues will be offering developers solutions a
knowledge exchange and networking platform as well as expert
support. There will be technical help in form of APIs and
software development kits.
"The developer community will be an ideas catalyst to support
the growth of M2M technology," says Hase. "We believe that in
the future we will need new ideas and solutions for a variety
of applications in different industries."
The big three industries that will adopt machine-to-machine
technologies are, he says, the automotive industry, smart
metering and e-health, followed by industrial automation in
fourth place. "But in the short term a lot of applications are
coming from industrial automation", which offers a relatively
fast return on investment, he believes.
"M2M means a manufacturer can manage a worldwide installed base
of machines." This is being driven in particular by small and
medium enterprises, says Hase.
The car industry will follow in what he calls the second wave.
"We'll see the automotive industry integrate M2M solutions into
the car." The first roll-outs will be in "one to two years",
with the mass market starting in "one to three years".
The European Commission is promoting this heavily. In September
2011 it adopted a recommendation that all new cars and light
vehicles sold in the EU after 2015 should be able to call the
emergency services automatically in case of an accident.
"Millions of citizens will benefit," said Neelie Kroes, the
EC's vice-president for the digital agenda, announcing the
measure in 2011. The project, called eCall, "will save hundreds
of lives and reduce the pain and suffering of road accident
victims", added Kroes.
The EC calculated that it will cost less than €100 per new
car to install the system, which will be activated only by a
crash - an attempt to rule out privacy concerns. The
Commission's aim is for all 27 member states to adopt eCall, as
well as Croatia, Iceland, Norway and Switzerland.
But it seems likely that once vehicle manufacturers start
installing eCall systems, and creating relationships with
telecoms operators to manage the systems, they will see the
benefits of adding other M2M services.
Hase can see opportunities for telemetric services in each car,
as well as mobile-based in-car entertainment services.
Operators such as Deutsche Telekom - and its systems
integration division, T-Systems - will have a key role in
working with automotive companies and firms in other industries
in helping to develop M2M, says Hase. And a financial
incentive: "Only 15% of the value of the service will be in the
connection," he calculates. DT will want to extend its
activities to the rest of the IT systems and in the systems
Indeed, that means DT will not just promote M2M in areas where
it owns mobile networks, because potentially 85% of the revenue
comes from other than the connection cost. "We will be able to
use France Telecom or another network," says Hase. "We can
offer a total solution."
The end of nuclear power
If the European Commission is behind the use of M2M in the car
industry, Germany's national government has emerged as a
promoter of M2M in smart metering. In the middle of 2011
chancellor Angela Merkel's government confirmed a plan to end
the use of nuclear power by 2022, closing down all remaining
plants - which provide about 17% of the country's energy needs
- by then. The decision had originally been announced a decade
before by Merkel's predecessor as chancellor, and her political
opponent, Gerhard Schröder.
"We will need a smart grid" in order to drive the efficiencies
in energy use that this closedown will require, says Hase. "The
utility companies are willing to invest."
And, just as the eCall system in the car will provide the way
in for the introduction of many other mobile-based services,
the introduction of smart meters into German homes will lead to
a range of sophisticated domestic applications, including
security. It will also give Deutsche Telekom and other German
companies experience in the technology that they can sell
elsewhere. In making her 2011 announcement, Merkel specifically
referred to the competitive advantage Germany would gain from
"We are creating partnerships," says Hase - making it clear
he's talking about a range of industries, from cars to energy
to vending machines. "We are experts in the connectivity layer,
in data and in security. We are not the experts in vending
machines. That's why we are creating partnerships."
Operators such as DT will have specific expertise to offer as
well as connectivity - such as collecting data from the sensors
in an M2M system.
Deutsche Telekom has more than 300 staff already working on
M2M, he adds. The company and its partners and rivals are
looking for what some believe will be a huge market for M2M.
One often quoted figure suggests that there will be 50 billion
SIM cards in M2M applications by 2020. "In the long term I
believe you will have 50 billion devices," says
M2M modules could be used in place of plastic tags so that
farmers and authorities can keep a lifetime record of
Coffee machines and solar panels
The first signs are there. He is in touch with "a coffee
machine producer that is planning 100,000 [connected] coffee
machines worldwide". Back in the energy field, a German maker
of solar panels wants to put M2M remote monitoring in each of
500,000 panels across the world.
"That's why I believe in the 50 billion story. It will come,
for sure." He gives another example: a project in the
Netherlands to use M2M devices to tag cows, "for the lifetime
management of the cow - it's a form of industrial automation".
Cattle in much of Europe already have plastic tags in their
ears, so that farmers and the authorities can monitor their
production and record their movements: a SIM card would
automate much of that.
In a move to extend coverage and widen the pool of expertise,
Deutsche Telekom is a member of the Global M2M Alliance, a
grouping - abbreviated to GMA - with France Telecom and
TeliaSonera that is different from the alliance of seven other
telecoms operators that was announced in mid-2012.
The GMA will help create de facto standards for the use of M2M,
he says, "including areas such as how we test the modules". The
idea is to have an M2M connectivity platform with standards and
open APIs that will enable users to migrate from one supplier
to another. "This has to be more standardised, as we need high
That's important to the economics of M2M, he notes. The volume
of data will be low, so the revenue for the connection will be
low, "and that means the price per module will have to be low".
That's also why companies such as DT are keen to move up the
value chain as the M2M market evolves, he adds.
"We want to add services. We are in an excellent position. The
market is asking for a trusted partner."
Such a partner will be responsible for the lifetime management
of the SIM card, he points out. The operator will have to be
there to backhaul the data, to collect it and to feed it into
the client company's systems in a suitable format.
Two megabytes a month
"But the data volumes will be low, less than two megabytes per
month" for a typical application, he notes. "It will be the
same for the next 10 years.
However, to the advantage of the operator, "the ARPU is low but
the churn rates will also be low", he adds. "There will be a
long-term relationship with the partner."
That's why DT and other operators are starting to see M2M as a
way into customer organisations to offer over-the-top services,
adding new features to the basic service.
It's clear that machine-to-machine is going to be important to
the mobile industry. What we are seeing at the moment is a
classic land-grab: DT and its rivals are seeking to set up
those relationships with key corporate customers - car makers,
electricity companies, even makers of coffee machines - that
will persist for years or decades to come. GTB
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