Challenges and Opportunities for M2M

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DOCUMENT GSC15-PLEN-57
FOR Presentation for Information
SOURCE CCSA (Huawei Technologies)
AGENDA ITEM 6.12
CONTACT(S) Dr. Zhong Luo
Challenges and Opportunities for M2M
Dr. LUO Zhong (Noah) Deputy Director of
Department of Industry Standards Huawei
Technology Co., LTD
Global Standards Collaboration (GSC) GSC-15
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An Emerging Market

• M2M (Machine to Machine) is defined as data
  communications between entities that do not
  necessarily involve direct human interaction.
  Also known as MTC (Machine-Type Communication)
  within 3GPP, USN (Ubiquitous Sensor Networks) in
  ITU-T, or as the Internet of Things.
• Corresponding improvements to network
  implementations supporting these solutions are
  required.
• Applications utilizing M2M are considered as
  critical to Smart Grid capabilities and energy
  efficiency.

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New Opportunities Identified

• M2M is returning to the forefront as an
  application for service providers.
• Drivers are both market-based and regulatory
• M2M holds the promise of bringing benefit to both
  telecom operators and vendors
• The opportunity may be a blue ocean for service
  providers... because low-bandwidth M2M services
  can be readily overlaid onto the current user
  services network.
• Vendors are expecting to profit from selling both
  M2M-capable devices, and from the network
  expansion brought about by increased throughput.

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Some Highlights on M2M Standards
CCSA TC10 - new Technical Committee set up in
early 2010, focusing on Ubiquitous Network
standardization.
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M2M standards in CCSA (1)

• TC10 is the leading Technical Committee in CCSA
  focusing on Ubiquitous Network (UN)
  standardization in China. Its intended to
  provide high-quality telecom standards to support
  the applications of M2M in different industries.
• This new TC was set up in February 2010. More
  than 200 delegates from all kinds of companies
  attended the first TC10 meeting in Beijing,
  including many potential industry users of the UN
  specifications.

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M2M standards in CCSA (2)

• 4 Working Groups are set under TC10 and more than
  20 technical specifications are expected to come
  out at the end of year 2011
• WG1 Design, Architecture Common Requirements
• WG2 Requirements from Industry Applications
• WG3 Network Improvement to Support the
  Applications
• WG4 Extension between Telecom Networks and
  Sensor Networks
• Close collaboration between TC10 and existing TCs
  in CCSA - a couple of joint research/standards
  projects between TC10 and the following TCs
• TC1 WG2
• TC3 WG4
• TC5 WG3, 4, 7, 8, 9
• TC8 WG2

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Current Issues

• Industries without an embedded communication
  infrastructure tend to favor a Service
  Provider-centric solution. Service Providers
  provide them with application platforms, custom
  or standardized devices, and the data
  transmission pipe.
• Infrastructure industries such as electricity,
  petrol and railway, already have dedicated
  communication networks. It is possible for them
  to build M2M systems independent of the Service
  Providers networks.

• Mobile Operators interest in deploying M2M
  applications immediately on 3G or LTE network is
  low.
• Because of the competitive price position of 2G
  devices, and low aggregate M2M traffic, operators
  appear willing to deploy M2M initially on
  existing 2G infrastructures.

• Most SDOs take small steady steps towards new
  specifications, rather than rushing into new
  standards.
• Operators have not yet seen sizeable revenues
  from M2M , and so are cautious about investment
  in network capacity and/or capabilities to
  support it.

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Challenges to Telecom Industry

• Business model and value chain
• Some carriers already have M2M applications in
  their networks. However, charging models still
  tend to be unsophisticated per meter per month
  or total Bytes transmitted impeding revenue
  opportunities.
• There are questions regarding the role of
  operators in the value chain. Most service
  providers do not expect significant revenue in
  the short-term.
• Problems remain in optimization of the network
  for M2M specific service.
• Device Price vs. Economies of Scale
• There is a chicken or egg dilemma between the
  ability to drive down device/chipset costs and
  the need to deploy in vast quantities.

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Next Steps for M2M

• Service Providers need to reduce the overall cost
  brought by introducing M2M business
• Avoid network CAPEX only for the sake of M2M
• Drive cost reductions in M2M terminal devices
• Network resource consumption for M2M terminals is
  different from existing voice/data devices, so
  optimization is needed to reduce the overall cost
  of the operators
• Minimize the impact on the existing
  conversational/interactive services, currently
  the main profit source for service providers
• Charging models need to be refined, and
  potentially based on pre-subscribed
  features/capabilities, rather than connection
  time (MoU) or data volume (bytes)
• Competition with non-Telecom service and
  application providers will increase, so quick
  movement into the market is essential.