Ericsson boosts M2M play with Telenor platform acquisition

Swedish infrastructure and services player Ericsson has struck a deal with machine to machine MVNO Telenor Connexion, which is owned by Norwegian incumbent and international operator Telenor, that will see the vendor acquire Connexion’s M2M service management platform.

Connexion said that the move, which it described as “aggressive”, would enable it to continue using the platform on a managed services basis, freeing up resources that would allow it to focus more closely on meeting its customers’ needs. “Less emphasis will be placed on the base systems and more resources will become engaged in developing new value added services per vertical market, improving and customising products, as well as utilising partnerships to complement the M2M development,” the company said in a blog post.

The move will see Ericsson looking to exploit economies of scale and its market leading expertise in the managed services space to host M2M services for a wider range of carriers. The firm said that a cloud-based ‘software as a service’ model would reduce barriers to entry for operators looking to establish an offering in the M2M space.

Ericsson, which will acquire 11 new employees as part of the deal, said the deal reflected its “ambition to drive the market for M2M communication.” The firm has generated a good deal of publicity with its vision of the future, in which 50 billion devices could be network connected by 2020.

The deal will also see Connexion become the first carrier to operate on Ericsson’s Device Connection Platform, an M2M connectivity solution launched earlier this year.

The M2M space, while gaining traction, remains in its infancy and among the leading operators in the space, subscription numbers remain low. Vodafone has said that it has five million M2M connections group-wide, while Telefónica claims four million across its entire footprint. US carrier AT&T leads the way, reporting more than 11 million M2M connections.

Jamie Moss, a senior analyst and M2M specialist at Informa Telecoms & Media said that Ericsson did not have the time or immediately available in-house expertise to develop its own M2M service management platform. The acquisition of Connexion’s SMP will bring the Swedish vendor an advanced position in the market and crucial experience, through the import of staff, of commercial deployments.

“If Ericsson can integrate the platform faster and more efficiently than other SMP vendors can, then it provides a differentiation for them,” he said. “They have the opportunity to supplant [market leader] Jasper Wireless.”