Machine to Machine M2M applications as a capacity and infrastructure demand driver

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Machine to Machine (M2M) applications as a
capacity and infrastructure demand driver

• Brett ORiley
• Managing Director, Ochre Services Pty Limited
• CommsDay Summit, April 2008

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Ochre Services Introduction

• Telecommunications infrastructure development,
  consulting and management company
• Perth, Western Australia headquartered, with
  offices in Singapore, Jakarta and Sydney
• Team brings a wealth of experience on submarine
  and terrestrial broadband infrastructure projects
  to the table
• Sales, finance, operations, technical design and
  project implementation skills
• ANZ Infrastructure Services (ANZIS) are the
  majority equity investor and partner in Ochre
  Services with Meyer Investments and Cable
  Infrastructure Investments
• ANZIS will also facilitate the debt financing
  arrangements with ANZ Bank or third party debt
  providers.

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Ochre developed new capacity

• Ochre is addressing underserved markets with
  underlying demand.
• Executing broadband development opportunities in
  Australia and Asia
• Singapore Jakarta Perth, expected to be
  completed in 2010
• Western Australia Big Pipe, expected to be
  completed in 2009
• Oil Gas opportunities around Australia and
  Indonesia

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Cable System Overview
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Ochre Services Infrastructure projects
Four major symbiotic project elements
Singapore Indonesia Australia 2 FP cable system
constructed from Singapore to Indonesia to
Western Australia.
SIA
Submarine loop cable system to be constructed for
established and new oil gas fields.
North West Shelf
Western Australia
Terrestrial high capacity single strand cable
system to be constructed to provide WA
connectivity.
AS REQUIRED purchase on existing systems to
facilitate connectivity for customers to State
capital cities and USA.
Trans Australia
Ochre will facilitate the expansion of
multi-gigabit Asia Western Australia regional
IP connectivity and increase the reliability for
existing operators and users
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Machine to Machine M2M Wikipedia definition

• The key pieces of a typical M2M system include
• A group of devices capable of replying to
  requests for data contained within those devices
  or capable of transmitting data contained within
  those devices autonomously.
• A communications link to connect the device or
  group of devices to a computer server or another
  device.
• A software agent, process, or interface by which
  the data can be analyzed, reported, and/or acted
  upon.
• Software Intelligence.
• Most often, M2M systems are task-specific.
  Meaning, a given system is purpose-built for just
  one specific device, or a very restricted class
  of devices in an industry. This is one of the
  indicators of the M2M market still being in its
  infancy, as a unified intercommunication standard
  has yet to evolve. Functions are duplicated --
  each purpose-built system repeats many functions
  already implemented in similar systems.
• Even in its infancy M2M is a major capacity
  growth force

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Capacity drivers

• M2M is a major driver of demand.
• Capacity demand is still modeled by most analysts
  on the traditional human subscriber model.
• This ignores bandwidth demand from super ICT
  applications that are driving exponential growth
  multi-gigabit.
• Ochre responding to growth in broadband demand
  from new ICT applications in specific industries
• Oil Gas industry
• Resources industry
• Scientific projects
• Defence
• Mobile broadband technologies will also stimulate
  demand from transport and logistics services.
• Capacity demand being under forecast
• machines dont need to sleep

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Bandwidth Hungry Examples

• Apple I-Phone
• 4D Seismic
• Driverless trains
• Square Kilometre Array
• Vending machines
• Location based services
• Remember the Steam Engine

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Investment climate

• Available financing - Australia has 1.3
  trillion of superannuation under management,
  looking for long-term stable returns
• Focus on infrastructure projects - can deliver
  stable returns when supported by long-term
  off-take agreements from credible customers
• Oil Gas Resources industries Strong growth
  and focus driven in Asia-Pacific by demand from
  China and India particularly
• Excellent returns - global oil prices reaching
  new highs - US110 per barrel.
• Commodities demand driving ICT innovation to
  lower production costs and improve efficiency

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Oil Gas industry drivers in more detail

• The high capacity, low latency and reliability
  provided by optical systems has been identified
  as key to improving oil gas production rates
• Sustained access to high capacity digital systems
  has a direct effect on operating efficiency.
• Gulf of Mexico for BP is the industry benchmark

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Evolution growth of technologies for Oil Gas
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Comparing Transport Technology options
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Submarine industry advances for oil gas

• New submarine cable technology capabilities
  purpose designed termination equipment, branching
  unit capability, power issues, wet mate
  connectors, and riser access
• Successful projects implemented in the USA and
  North Sea with specialised installation
  experience
• Range of vendors
• Tyco
• Huawei
• Nexans
• Alcatel-Lucent
• Supplier capability developing but in its early
  stages

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Direct and indirect cost benefits

• Reduced manning
• Reduced down time
• Shore side experts can support multiple
  platforms
• Improved production - fields see improvements of
  1 or more
• One operator estimates gtUS 1 million per month
  savings for 8 off-shore platforms
• Ability to re-man faster after abandonment
• Operators expect to save at least one day versus
  current re-manning schedules
• Gulf of Mexico platforms produce 200,000 to
  250,000 bbl/day US20-25 million of saved lost
  revenue per day at US100/bbl.
• Availability commands a significant premium

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Future M2M direction

• Moores Law and wireless technology advances will
  continue to stimulate industry wide
  opportunities
• Backbone networks will require more and more
  resilience and capacity
• Oil gas focus on remote operations with
  unmanned subsea or floating platform
  infrastructure
• Centralised operational management important
  across all industries
• End customers looking for multi-gigabit capacity

M2M will increase in importance as a capacity
growth driver
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