Beyond mobile: Telcos hook up hospitals, cars and coffeemakers

Thu Dec 6, 2012 7:38am EST
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By Clare Kane and Leila Abboud

BARCELONA (Reuters) - In Barcelona's Hospital Del Mar, Telefonica is doing more than connecting phone lines - it is also developing a lucrative new business keeping patients' hearts in good shape.

A heart-monitoring program put in place by Telefonica is just one kind of machine-to-machine (M2M) technology that telecom operators are racing to develop for sectors including healthcare, automotive, transportation and energy.

Carriers such as Vodafone, Deutsche Telekom, AT&T, Verizon, China Mobile, and France Telecom are betting that M2M will be a significant source of growth as the number of connected devices climbs to 12 billion or more by 2020.

In cars, for example, mobile technology can be used to automatically call emergency services after a road accident. In offices, France Telecom uses it to tell companies when their coffee machines need re-stocking, while energy companies are equipping homes with 'smart meters' to track consumption and permit differential pricing.

The potential prize is billions of dollars in new business for telecom groups, many of which are otherwise faced with declining sales, and the promise of big cost savings for their customers.

Yet turning the 'Internet of Things' into a real business will not be easy for big telcos, since the market is far more complicated than their traditional sales of mobile and Internet contracts to consumers and companies.

To succeed, they have to develop an understanding of a range of industries, their specific needs and regulatory constraints. They also have to outfox a phalanx of new competitors such as start-ups in Silicon Valley, app developers, and corporate giants like IBM, General Electric and Philips.

Analysts' forecasts vary widely on the size of the M2M market and how much of it telcos can win, since the biggest opportunity comes not from putting a mobile SIM card in devices but from providing the software and services to make them work.   Continued...