Telekom Austria has said that it wants its M2M Business Group, formed in September 2011, to account for 3% of group revenues by 2015. To achieve that, it has set itself a target of having 10 million M2M connections across its footprint by the end of 2015.
The company’s group revenues in 2011 were €4.45 billion, and at the end of 2011 the M2M Group had 500,000 active M2M SIMs under management.
However, M2M Group Managing Director Bernd Liebscher said that the company was forecasting that the total M2M market in its Central and Eastern Europe (CEE) footprint would add up about 10 million connections by 2015.
So is the company really giving itself a target of having 100% market share within its operating countries by 2015?
Phat Huynh, Managing Director, Head of Marketing and Sales, told Mobile Europe that the 10 million target is not actually the target that the company has set itself in terms of connections, but is a growth target for the size of the total market, with Telekom Austria achieving a “substantial share” of that market.
Huynh said that in ARPU terms the unit currently sees about €1 per month per SIM. However, he added, there are opportunities for considerable revenues per subscriber on top of that, by adding services and applications packages around the basic connectivity.
“Customers are buying the service, not just an M2M SIM. In Croatia today, we have a fleet management solution that is generating €13 ARPU per subscriber,” Huynh said. He added that by concentrating on mid-sized companies, the M2M Group thinks it can create a higher revenue per subscriber that by chasing large international sized contracts. “We will not look to compete with the major Group companies such as DT and Orange,” he said, “We are not going to work with a BMW or similar. I think there is more value in operating within the next tier down.”
Huynh said that today the transport and logistics sectors were the main earners. However, he expected retail and point of sale applications to be the next major growth area,. The company also expects smart metering applications to provide a significant opportunity from 2015, once the regulatory situation has “cleared up”, Hyunh said. Health will be another key vertical over the next two to three years, he added.
The M2M Group, although set up as a separate operating company from Telekom Austria Group, has access to the Group’s sales and marketing resources, as well as to other group functions. It has its own dedicated OSS/BSS layer, Hyunh said, to allow it to monitor, manage and control the SIMs and services it has under management.