The experts agree: China’s M2M market set for explosive growth...

The experts agree: China’s M2M market set for explosive growth

June 29, 2016 By Stuart Corner Leave a Comment
The GSMA and EY (Ernst & Young) have both released reports into the Chinese M2M market predicting enormous growth, fuelled by very active Government support.
The GSMA report, Mobile Operators and Digital Transformation, produced in conjunction with The China Academy of Information and Communications Technology (CAICT), said the market would reach one billion connections by 2020, with the majority coming from the developing Low Power, Wide Area (LPWA) market.
“China is currently the world’s largest M2M market with approximately 100 million cellular M2M connections, a figure that is expected to increase to 350 million by 2020, the report said. “However, an additional 730 million connections will be enabled by LPWA technology, taking the total figure to just over one billion. By 2025, it is expected that 50 percent of the world’s 28 billion connected devices will be suitable for connection by LPWA networks.”
GSMA CTO, Alex Sinclair, said: “The GSMA’s Mobile IoT Initiative is working with China’s mobile network operators to deliver commercial LPWA solutions in licensed spectrum to accelerate adoption and transform the development of the Internet of Things in areas such as agriculture, automotive and utilities.”
M2M market yet to mature

EY, in its report M2M in China: opportunities to build on global leadership said China was already the market leader in M2M. “Yet the market is still in the early stages, as M2M accounted for less than five percent of telcos’ service revenue in 2015.” However, EY added: “Benefiting from the Government’s proactive support and the sheer scale of the opportunity, the addressable market and the opportunity for further growth are immense.”
Both organisations cited strong government support as contributing significantly to China’s rapid take-up of M2M. “China’s central government is leading the development of standards, supporting the establishment of an IoT standards association and promoting Chinese-developed standards internationally,” the GSMA report said.
“The Chinese government continues to play a major role in driving the adoption of IoT, providing financial support and strategic direction. Over the past five years, it has unveiled initiatives aimed at turning IoT into a major pillar of the Chinese economy.”
Smart cities will drive M2M
EY said: “Smart-city technology probably represents the single biggest opportunity for M2M in China. The Government has identified it as a strategic focus area, and the National Development and Reform Commission (NDRC) and MIIT have issued guidelines for developing smart cities. … The acceleration of the smart-city initiative will drive the need for intelligent applications that require M2M connectivity.
The Government has selected 202 cities, including Beijing, Guangzhou, Hangzhou and Shanghai to pilot smart-city projects with applications in vertical sectors such as transportation, electricity, public safety and environmental protection.
“Multiple connected Government services and city initiatives are also playing a significant role in leading the country’s appetite for IoT solutions,” EY said. “Over the next five years, we will see large-scale deployment of IoT, supported by new use cases and improvements to the customer experience. Increased investment in IoT will fuel more demand for M2M services, which will boost overall market growth. With that, M2M will become one of the key drivers of the future mobile Internet era in China, forming an important part of the IoT.”