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

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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Personal

Security

Automobile

Smart City

Logistics

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M2M

Metering &Smart Grid

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.

Some Highlights on M2M Standards

CCSA TC10 - new Technical Committee set up in early 2010, focusing on Ubiquitous Network standardization.

2004 2008200720062005 2009

SA1 M2M (TR 22.868)SA3 USIM M2M (TR 33.812 )

SA1 NIMTC (TS 22.368), EMTC

ETSI TC M2M

ITU-T USN, Vehicle Network, FG Smart Grid

2001 2002 2003

IEEE 802.15.4-2003 IEEE 802.15.4-2006 IEEE 802.15.4-2009

ZigBee V1.0 ZigBee 2006 ZigBee 2007 ZigBee RF4CE ZigBee IP stack

IETF 6Lowpan

IETF Roll

RFC 4919 RFC4944

ISO/IEC SGSN

SA2 NIMTC (TR23.888)

2010

M2M standards in CCSA (1)

TC10 is the leading Technical Committee in CCSA focusing on Ubiquitous Network (UN) standardization in China. It’s 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.

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

Current IssuesPrioritization Issues 2G, 3G or LTE?

• 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.

Operators and Industry

• 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.

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.

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.