M2M leader Kore acquires Jazz Wireless' 2G customers

With the end of 2G wireless services growing nearer, one of the smaller players in the M2M space joins a larger provider in planning for the exodus
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Machine-to-machine communications, or M2M, comprises the backbone of that portion of the Internet of Things concept that isn't made of vapor--that uses real, working technology maintained and sold by human beings. It's actually been part of control systems technologies for decades, but has only recently captured the attention of technologists as it adopts IP networking protocols for device addressing and utilizes centralized provisioning portals. Perhaps "cloud of things" would be a more appropriate phrase, since fleets of trucks, sections of fuel pipelines and even segments of highways have yet to join "the Internet" as we know it.

One of the leading platform providers in the M2M space has been Kore (previously Kore Telematics, also known as Kore Wireless). As an MVNO, Kore sells cellular connectivity to businesses that manage global networks of interconnected objects--fleets of vehicles, shipping crates and power conduits. Since you can't really string cables between these things effectively (sorry, Comcast) wireless networks form the backbone of M2M services.

But the problem is this: Objects in an M2M network really don't have much to say to one another. Because their vocabulary is limited (in some cases, merely sending out a "heartbeat" to indicate presence and location), devices in M2M don't need a 4G network or even a 3G network. Analysts continue to estimate that some 9 out of 10 M2M deployments in North America are based on 2G networks, including GSM.

And because very few consumers use 2G cellular nowadays, major carriers worldwide have already implemented plans to dismantle their 2G infrastructures--especially smaller carriers that can't afford the upkeep of their legacy systems. Back in 2012, T-Mobile began an aggressive plan to push its customer base toward 4G, with an eye on completing that transition in three years' time.

That push could have spelled disaster for smaller players in the M2M space whose platforms relied on 2G. One of those small players Jazz Wireless, based in Raleigh, North Carolina, completed an all-cash acquisition by Kore last Wednesday.

The acquisition gives Kore an estimated 200 new US-based GSM customers, and continues their existing deployments on T-Mobile networks. Which makes it a bit awkward for the players involved to explain their new relationship--mixing a commitment to 2G with an exodus from 2G in the same strategy.

In his prepared statement Wednesday, Kore president and COO Alex Brisbourne gave the exercise in platform leveraging his best shot, saying, "The addition of a direct relationship with T-Mobile enables KORE and its customers to leverage an ongoing commitment to 2G services in a time of transition in the North American market."

Last month, mobile carrier association GSMA estimated the number of M2M connections worldwide to have exceeded 200 million last year (.pdf), growing at a rate of 40 percent annually. GSMA predicts that number to blast past 250 million this year. Already, 1 out of 10 cellular connections in North America are between machines in M2M networks.

Some 90 percent of those connections take place over channels that will cease to exist after 2017. In addition, carriers have scheduled a halt to new 2G customer deployments for M2M or any other purpose just next month. So these circumstances do present somewhat of a dilemma for corporations with billions invested in telematics and control systems.

In January, Kore teamed with M2M service provider Multi-Tech Systems to present a series of educational webinars to their customers and others, on how to manage the transition to higher-grade networks, even though those new networks may not be technically necessary for any other reason. If 2G were responsible for a larger chunk of connections, some M2M experts believe, there might have been a business case for continuing their existence indefinitely.

As Kore's Brisbourne told me in a 2012 interview, "If the tide is coming in and the move is toward 3G, then people with M2M services that depend on wireless connectivity for their very viability need to plan to encompass it. And for that, they need to have a clear, publicly stated direction--not behind-the-scenes murmuring about the timeline for those services to be in play. Otherwise, we do the industry a disservice."

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