Vodafone tops Analysys Masons M2M Communications Service Providers league-table for the third year in a row

January 2014
Morgan Mullooly

Analysys Mason recently published the 2013 M2M carrier scorecard which is a ranking of communications service providers (CSPs) according to how they are performing in matters related to machine-to-machine (M2M), and how they are positioned for growth in this market. This is the third year that Analysys Mason has carried out this research and it is the third year that Vodafone has topped the rankings. Figure 1 below shows the relative positioning of the twelve communication service providers (CSPs) that were assessed in the scorecard. Those in the industry icons box have established leading positions in the M2M industry and have acquired the greatest number of M2M device connections (M2M scale) and have shown themselves to be capable in five other categories of differentiation (M2M overall excellence). Vodafone falls into this Industry Icons category.
Figure 1: Summary of Analysys Masons M2M carrier scorecard results, 2013 [Source: Analysys Mason, 2013]
Trailing titans Industry icons

M2M scale (number of enterprise M2M device connections)

2
1 Vodafone 5a 8 12 11 9b 9a 5b

3a 3b

Unspectacular underdogs

Niche notables

M2M overall excellence

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Scale
The M2M scale category, ranked the CSPs according to the number of M2M device connections they had compared with other CSPs and also in terms of the relative number of M2M connections to total connections. Vodafones M2M business unit sits under its Vodafone Group Enterprise division and presently has over 14 million M2M connections (September 2013), easily establishing the carrier as one of the leading M2M CSPs worldwide.

Overall Excellence
Analysys Masons assessment of overall excellence is calculated by rating the twelve carriers against 5 categories; M2M ambition and vision, M2M customer experience management, M2M networks and standards, M2M organisation and M2M strategy. Analysys Mason ranked Vodafone as number one in M2M overall excellence (see Figure 2) and the assessment is described in more detail below.
Figure 2: M2M overall excellence score of the 12 CSPs in Analysys Masons M2M scorecard 2013 [Source: Analysys Mason, 2013]
Vodafone
CSP 2 CSP 3a CSP 3b CSP 5a CSP 5b CSP 7 CSP 8 CSP 9a 92% 92% 88% 88% 87% 85% 84% 84% 100%

99%

CSP 9b
CSP 11 CSP 12 0% 20% 40% 60%

83%
80% 80% 100%

M2M ambition and vision

This category considers aspirations and expectations rather than achievements. In this section we examined carriers projections or expectations of how their M2M business will have evolved over the next three years, and how they saw their place in the M2M ecosystem evolving. Vodafone expects the amount of M2M revenue generated by non-connectivity services to have more than tripled in three years time (3Q 2013 3Q 2016).

M2M customer experience management

The M2M connectivity landscape is becoming more competitive as the sector matures. Analysys Masons strongly held view is that, as prices for connectivity services threaten to stagnate or decline, it is becoming increasingly critical that carriers differentiate themselves on aspects of their service offering other than simply

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providing connectivity and application enablement. Customer experience management (CEM) is one such aspect. Consequently, we now rank carriers on their M2M CEM activities. Vodafone excelled in this category. Vodafone uses the net promoter score (NPS) methodology to evaluate the M2M business units CEM success and gain insight into its M2M customers overall satisfaction and loyalty. It also has a well-defined set of CEM processes for the join, on-boarding, and support phases of the customer lifecycle. For example, Vodafone offers eLearning modules for M2M customers during the on-boarding phase. Its CEM procedures in the support phase are defined by the Information Technology Infrastructure Library (ITIL) framework, which is a globally recognised best-practice framework for service management.

M2M networks and standards

One characteristic of highly ranked carriers in this category is a sophisticated network set-up which is designed for scaling M2M operations. Vodafones network is suitably prepared to support vastly increasing numbers of M2M connections. The carrier has deployed dedicated network elements to best scale the M2M business, including dedicated GGSN, SGSN, and HLR. The other aspect of this category is related to M2M standards. Most carriers we spoke to in the course of this research are, at a minimum, already participating in the large communications sector standards bodies associated with M2M such as 3GPP, ETSI and oneM2M. Vodafone has an extensive level of memberships in standards bodies and industry stakeholder groups, including in vertical sectors (e.g. Continua Health Alliance, European Smart Metering Interest Group) and in standards groups at the national level (e.g. The UK Smart Specification Working Group (SSWG). The investment of effort in these stakeholder groups puts Vodafone in a good position to propel its M2M business to further success.

M2M organisation
The M2M organisational structure category ranked the CSPs according to their commitment to maintaining a dedicated M2M team of sufficient size to match their market needs. The scale of a CSPs M2M business is an indicator of achieved success, as well as an indication of potential future CSP investments. Vodafones M2M team has a headcount that is suitably large to service existing M2M clients and also to take advantage of global growth opportunities.

M2M strategy
The M2M strategy category ranked CSPs on the basis of having created a strategy linking together customer segments, solutions and market messaging/branding in a thematic way that fits the particular carriers core capabilities. Vodafones strategy is vindicated by the success of the carrier to-date and it is poised for even greater growth. Vodafone serves local, regional and global customers in a host of industry sectors through a network of more than 30 operating companies and 50 partner markets. Vodafone has developed its offering through companies in which it has invested (Device Insight) or acquired (Zelitron, Cable & Wireless) and through strong partnerships with leading companies in the supply chain. It complements its strong technical and commercial offer with high quality professional services, premium 24/7 support and comprehensive SLAs. Vodafone has created end-to-end solutions and best-in-class professional services including: consultancy, solution design and development, implementation services and project management which support customers at every stage of the M2M project lifecycle.

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Vodafone recently announced a capex plan called Project Spring, which will be funded by the proceeds from the sale of its interest in the US carrier Verizon Wireless. Via Project Spring, Vodafone will make capex investments totalling GBP 7 billion during the next two financial years (FY2013/14 and FY2014/15). Most of the money will be used to improve Vodafones network coverage and capacity, while the M2M business unit will receive funds which will be used to launch major M2M initiatives.

Outlook for Vodafone

The global growth outlook for Vodafones M2M business is very positive. Not only is the company tailoring its strategy to comply with local regulation to take advantage of the huge M2M potential in countries like Brazil and Turkey, it is also planning for substantial growth as a consequence of the mobilization of Project Spring.

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