Machine-to-Machine (M2M) technology is primarily about enabling the transfer of data between machines. With the help of a module operating through a communications network, the data is collected, evaluated and if necessary, a response is triggered. Thus, M2M interfaces physical world events from sensors and devices, with enterprise and web applications – allowing for remote monitoring, maintenance and controlling of devices. M2M is experiencing rapid growth, with connections predicted to reach 50 billion by 2020 [1] representing a USD950 billion revenue opportunity for mobile operators according to Machina Research’s for Connected Life. The growth of the market is mainly attributed to sophisticated applications in updating digital billboards, in-vehicle tracking & entertainment and monitoring of industrial machinery.
However, the number of M2M applications in developing countries currently only accounts for approximately 1.5% [2] of overall usage due to several factors including the high cost of M2M modules, the lack of open-standard platforms for M2M development, and a missing M2M strategy from mobile operators in these markets. Although the market in developing countries for smart grid, smart cars or smart buildings is still immature, the opportunity exists to leverage M2M in countries where the majority of people still lack access to electricity and clean water.
Given the lack of wired infrastructure in many developing countries, M2M technology – combined with novel or even existing energy, water, health and sanitation solutions – has the power to improve the standard of living of millions by making new business models possible. In the last 2 years we have seen significant growth in the number of organisations using M2M for basic community services.
Grundfos Lifelink’s, M2M-enabled solar-powered water pumps provides safe drinking water to small communities thanks to a combination of M2M remote monitoring in the pump unit and Safaricom’s mobile money platform (M-PESA). Also in East Africa, organisations like M-KOPA and Mobisol bring affordable solar energy solutions to off-grid low-income populations with the help of pay-as-you-go solar energy made possible by embedded GSM modules. Such energy solutions circumvent the problem of high initial costs of photovoltaic systems, allowing customers to pay for energy in instalments either towards ownership or using a micro utility model. In the long-run this means off-grid populations are less dependent on expensive and harmful energy sources such as kerosene, candles and disposable batteries.
On a recent trip to Kenya, we visited Mukuru, a slum in Nairobi where most of its 600,000 people coexist in severe poverty, with unreliable access to electricity, scarce or expensive access to water and limited sanitation. Companies like Sanergy, who build and sell sanitation units to local entrepreneurs, are developing new business opportunities, reducing open defecation and improving access to basic community services. In the future, M2M could be used by Sanergy in their sanitation units to further improve operations and tank emptying services. Such concepts would require a solid trial phase and the M2M solutions would need to prove real value to business operations, rather than being another technological hindrance capable of jeopardizing the business model.
The rise of tech hubs across emerging markets including the recently featured Silicon Savannah, combined with improved GSM coverage across developing countries, provide good conditions for more M2M innovation. In countries like Kenya, where 95% of the population is covered with basic 2G network infrastructure and only 16% of people have access to electricity, the potential exists to see millions of M2M solutions be deployed to even the most remote areas of the country. M2M could hence play of major part in delivering improved access to basic services to the poor, while the prospect of millions of active M2M-enabled devices using GSM networks represents a compelling incentive for MNOs and the broader mobile ecosystem.
[1] http://www.telecomengine.com/article/axeda-connexion-m2m-numbers
[2] ABI Research – M2M Market Data for GSMA