Proving the Business Case for the Internet of Things

South African enterprises turn to M2M for logistics gains: Frost & Sullivan

Iain Morris
July 23, 2014
 
South African enterprises are increasingly turning to M2M technology to automate processes, as well as boost visibility and control assets, according to new research from Frost & Sullivan.

As players across a variety of sectors look to M2M technology to improve operational efficiency and logistics, and to optimize resources, mobile operators are seeing an opportunity to improve profit margins through new business in this area.

According to the market research company, the automotive, retail, finance, utilities and vehicle fleet sectors are currently among the heaviest users of M2M technology in South Africa.

“Agriculture, healthcare, security, and process-intensive sectors, like mining and manufacturing, are expected to be some of the main adopters of M2M solutions in their operations,” said Lehlohonolo Mokenela, an analyst with Frost & Sullivan. “Globally, operators have set-up spin-off companies to focus on providing M2M support, a trend that some of the larger local operators, Vodacom and MTN, are looking to follow.”

Frost & Sullivan says that device manufacturers in South Africa have already developed new M2M applications for the automotive, retail and finance verticals, and that mobile operators are now in a position to support data requirements from a growing number of connected broadband M2M devices.

Operators could also exploit opportunities arising from the growing demand for analytics services among enterprises that want to make use of device data, says the market-research company.

Despite all this, the lack of standardization in devices and protocols continues to hinder the adoption of M2M, particularly in the healthcare sector, according to Frost & Sullivan, which expresses concern this could slow down the development of the market.

Frost & Sullivan also urges mobile operators to play a bigger role in the M2M value chain.

“Managed connectivity is likely to remain a core value proposition of the mobile operators, as they own the networks … [but] the long-term decline in data prices will drive down average revenue per user,” said Mokenela. “Mobile operators are looking to engage in vertical consolidation to strengthen their presence along the value chain and expand revenue sources beyond basic connectivity and more towards content-rich enterprise applications.”
 
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