M2M challenges go beyond technicalities

Machine-to-machine market still utilizes traditional user-pay models that are unlikely to work, and may face legal risks involving privacy as well as regulatory hurdles in different countries, industry watchers note.
Written by Ellyne Phneah, Contributor

COMMUNICASIA, SINGAPORE--The machine-to-machine (M2M) market faces not only technical challenges in implementation and interoperability, but also business issues related to pricing, potential breach in user privacy and regulations in different countries, industry watchers note.

According to Robin Mersh, CEO of Broadband Forum, M2M is a "huge potential market". Citing research by Ericsson, he said M2M services were expected to hit US$300 billion by 2014 and 50 billion devices will be connected to the Internet by 2020. However, "a lot of work still needs to be done" to understand this market and gaps still need to be plugged, said Mersh during his presentation at the tradeshow here Tuesday.

For one, the ecosystem faces numerous implementation challenges, Joachim Koss, M2M vice chairman of the European Telecommunications Standards Institute (ETSI), pointed out. Existing M2M solutions are highly fragmented and dedicated only to singular applications, and this also results in slow development of the global M2M market, Koss explained.

According to Musa Unmehopa, chairman of the technical plenary under the Open Mobile Alliance, interoperability between devices and machines is also difficult to achieve. He explained that many service providers fail to realize not all devices communicate in the same way or "talk with the same protocols". Neither do they have the same capabilities. This may hinder the effectiveness of M2M, Unmehopa noted.

Business issues, legal risks, regulatory hurdles
And while there are many different ways to connect these devices to the Internet, Mersh said service providers are deploying their products without considering interoperability, thinking only about how they should sell devices to consumers. He urged these market players to move and think beyond this mentality.

The traditional "user pay" model also does not work on end-users when it comes to M2M, noted Peter Waters, partner at Australian law firm, Gilbert + Tobin, who said consumers would not be willing to pay for a medicine bottle with device-tracking capabilities and be charged 20 cents every time it is opened.

"The economic model must now take into account the avoided costs of service delivery," Waters surmised. "There is no value proposition and consistency in business cases that the end-users can see."

He added that the pervasive nature of monitoring and collection with M2M could lead to privacy and data security issues, bringing up concerns about the use and disclosure of the user's personal information. There are also possibilities  for personal information to be used to market good and services based on individual's behavioral patterns and preferences, Waters warned.

According to Rob Nicholls, principal advisor of law firm Webb Henderson, data protection regulations may help restrict the delivery of personal data to M2M.

He noted, though, other regulatory issues such as those involving roaming. He explained that operators collaborate with others across the globe to provide wider roaming coverage, and as a result, the location of M2M devices running on these networks may not always be identified. As such, operators may not be able to comply with service level agreements stipulated by their local regulators, he said.  

Standardized system needed
Mersh pointed out that M2M needs a common framework on which all services and devices can interoperate and scale, and be efficient and widely available.

Koss added a standardized M2M service platform will speed up the development of the M2M market. Applications can share a common infrastructure environment and network transitions within its horizonal architecture, while standardized software and hardware interfaces and protocols will ensure the interoperability of all system elements, he explained.

This is why major standards development organizations, including the ETSI, agreed on a common M2M service layer, oneM2M, in January this year as part of a global initiative to drive M2M standardization, he remarked. This will develop globally agreed M2M end-to-end specifications and reports, with a focus on service layers using common use cases and architecture principles, Koss explained.

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