M2M will keep 2G networks alive, says Ovum

By:
Alan Burkitt-Gray
Published on:

LTE will be the biggest provider of machine-to-machine services by 2021, but 2G networks will have almost as many connections

There will be more than 700 million machine-to-machine (M2M) network connections using the cellular industry by 2021, and they will earn the industry $67 billion a year in revenue.


The latest report from Ovum says that LTE will dominate, with 212 million connections by 2021, but 2G networks will have as many and there will still be 172 million connections using 3G.

“Large carrier groups with established M2M businesses will not seek to switch off 2G until 2020 – and for some this will not be until 2025,” said Pauline Trotter, practice leader for Ovum. “But this decision is not merely for the sake of legacy support: 2G M2M connections will continue to be added, because 2G still represents the most affordable and internationally available form of coverage.”

The total of cellular M2M connections will reach 733 million, says Ovum. The Asia and Oceania market will be worth $22 billion; the North American market $16 billion and the Western European market $14 billion.

Both 2G and 3G technologies will be plateauing in terms of M2M connections by 2021, but M2M will help keep them alive as LTE takes over.

Jamie Moss, Ovum’s principal analyst in the internet of things, said: “Machine-type connections need to stay alive for many years and are not transitioned to new air interfaces as a matter of course. Doing so breaks the economics of deploying fully autonomous nodes. Instead, M2M contracts typically reach the end-of-life stage before any migration occurs. Consequently, 2G, specifically GSM, will persist for far longer in M2M.”