CTIA IT: Sprint, AT&T beef up M2M activities

Amazon (NASDAQ:AMZN) wasn’t the only company to make M2M news at the CTIA Wireless IT and Entertainment event. Operators Sprint and AT&T bulked up their behind-the-scenes operations with emerging device initiatives and separate deals with Numerex, showing that while they’re taking a greater interest in serving the M2M market directly, they’re still willing to rely on their resellers.

The major consumer news at the show was Amazon’s new GSM/high-speed packet access Kindle, which uses Amazon will sell internationally as well as in the US, using the AT&T (NYSE:T) network. But on the enterprise side, both AT&T and Sprint (NYSE:S) were developing their behind-the-scenes operations to better target mobile telematics. Sprint announced the creation of new emerging solutions group focused on accelerating the deployment of new embedded consumer electronics and computing devices—like the Kindle—to market. In addition both AT&T and Sprint announced deals with (NASDAQ:NMRX), an M2M aggregator and solutions provider that specializes in key verticals such as transportation and utilities.

While Sprint and Numerex’s deal appears to be more of a traditional wholesale relationship with Numerex acting as a mobile virtual network operator on the Sprint CDMA network, the AT&T partnership has an interesting twist: AT&T is essentially taking the solution of a former M2M aggregator and selling it to a new aggregator. Though AT&T already has a wholesale deal with Numerex, it won’t just be selling it bulk bit buckets anymore. It will also provide Numerex with device management service using the AT&T Control Center, a M2M device management platform supplied by former aggregator Jasper Wireless. The result is that Numerex will be relying on AT&T for device provisioning, activation, management and support as well as for network access.

Both deals show that while operators are investing new resources into becoming the go-to providers in the M2M market, they’re still willing to lean heavily on specialty solutions providers like Numerex. In a recent interview AT&T Business Solutions vice president of mobility product management Chris Hill said that AT&T is expanding the breadth of its M2M coverage targeting enterprise and vertical customers it left to its MVNOs in the past. But he also acknowledged there are still some customers that can’t be served directly by AT&T, because of specific service requirements or size that they are better served by aggregators or partners.

“It would be at the lower end of the market where we don’t have the resources, or possibly the smaller or mid-sized opportunities in the market,” Hill said. “Another issue would be complexity. If there is some specific application or niche vertical solution out there that might be served better by one these partners.”

In the past, coverage was also issue, Hill said. A fleet tracking application might need coverage in the remotest areas in the US or access to multinational networks, which made an aggregator a better choice. But, at least, domestically, that’s not as big of a factor as AT&T has expanded its networks and roaming relationships. With its partnership with TerreStar, AT&T can now provide hybrid satellite-cellular coverage on the tops of mountains or miles out to sea, Hill said.

Meanwhile, Sprint is both expanding its direct M2M sales and support capabilities as well as bulking up on partnerships. The new Emerging Solutions Group will focus on both businesses and consumers, but will concentrate on two key areas: mobile computing and embedded consumer electronics and M2M devices that can be utilized across customers and even industries. Sprint indentified several verticals it planned to target, including remote monitoring, asset tracking, fleet management, telematics, automation and control, automated meter reading, smart grids, point-of-sale/ATM financial transactions and wireless routing.

Its wholesale deal with Numerex is the second Sprint has announced in recent month, a deal with M2M DataSmart being the other. But Sprint has pursued many of its big deals, such as with Ford Motor Company and DriveCam, on its own. On the consumer side, Sprint made the first big impression on the industry when it revealed it was the network provider behind Amazon’s e-book reader, though its status as exclusives network provider ended today with the release of the GSM/HSPA Kindle.

Numerex CEO Stratton Nicolaides said the M2M market has grown so dramatically in recent years, it has begun to segment itself into camps targeting particular areas of the market. AT&T, for instance, has created two product divisions focused on M2M—the enterprise mobility group run by Hill and the consumer-focused emerging devices group. Verizon Wireless (NYSE:VZ, NYSE:VOD) has gone so far as to create a joint venture with Qualcomm to attack the market from both network access and device integration perspectives.

Despite those efforts, many areas of the M2M market require even higher levels of specialization, Nicolaides said. Each application has its own software, device, module and management requirements, and it’s through that customization to each customer’s needs, Numerex has made its mark, he said. “We strip the complexity from these solutions,” Nicolaides said.

For instance, Numerex works with General Electric to enable its real-estate lock box devices. The boxes, usually hung on doorknobs at homes for sale, contain house keys a real-estate agent needs to show the house. Rather than relying on combinations to access them, a wireless module inside the box will unlock the compartment only after it receives a signal remotely.