By the year 2020, there will be more mobile connections than people, 20 billion devices compared to 7.6 billion people, according to pundits.The year 2013 saw a total investment of $1 billion into Internet of Things (IoT) companies and two months into 2014, merger and acquisition activity is already valued at $3.5 billion. In his keynote at MWC 2014, John Chambers, CEO of Cisco, projected the market even higher: at 500 billion connected devices by 2020 and placed the Internet of Everything market at $4.6 trillion for the public sector and $14.4 trillion for the private sector by 2020.
 
Network providers are determined to grab a large piece of this pie but doubters say that they may not have the agility and innovativeness to dominate in this market, which will most likely be won by specialized mobile virtual network providers and over-the-top players.
 
Telefónica which is making a serious bet on machine to machine (M2M) services, creating both local and dedicated teams to evangelise M2M in its 23-country footprint. This it plans to do through 3 lines of action: global connectivity, e2e solutions and innovation and development, Carlos Morales, global managing director for M2M at Telefónica Digital told the audience at MWC 2014. Investment start-ups like Wayra and nifty proprietary solutions are one way Telefónica is working to bring the fruits of innovation and development directly into the market.
 
Trusted partners are an approach both Telefónicaand its German counterpart, Deutsche Telekom, are adopting in the vertical areas such as transport, health, utilities, security, smart cities and smart home to create e2e solutions.
 
But while Telefónicaenvisions verticals such as retail, industrial, utilities, security and transport, where already 9 million m2m connections have been created, Telekom has abandoned the silo approach in favour of a horizontal one, building a cross-cutting enablement and management platform for as many as 700 different partners it has identified in the vertical markets, according to Jürgen Hase, who heads Telekom’s M2M Competence Centre.
 
AT&T has built up expertise in IoT solutions and connected devices at its M2M Foundry in Plano, Texas through prototyping, customer collaborations and hackathons, and Chris Hill, senior vice president for advanced solutions at AT&T Business solutions reports that 16.3 million devices have so far been connected almost anywhere in the world with SIMs. Hill told Telecom Tiger that AT&T intends to license its knowledge of M2M, especially in domains of industrial production and logistics.
 
In preparation for a world that is becoming more instrumented, more interconnected and more intelligent, vendors like IBM have recognized that value is shifting for its telco customers from traditional denominators like fixed and mobile voice and broadband, SMS and value added services to new revenue sources: including mobile to mobile, content and apps, advertising, cloud and other information and communication technologies.  IBM forecasts that by 2020, these new revenue sources will account for 9% of telcos’ intakes from the current 3.2%.
 
At the same time, it recognizes that connectivity will actually be a small part of the value from M2M. Winning strategies will focus on improved business value: new revenue models, lower costs and improved client experience. “Telcos need commitment and focus and dedicated resources for this domain,” says Bob Fox, Global Industry Leader for Telecommunications, Media and Entertainment for IBM.
 
Telcos, while recognizing the threat of OTTs in providing connected homes and enterprise solutions, counter that OTTs do not give service level agreements and may not be equipped for mission critical implementations such as where critical national infrastructure is involved.
 
This is where the network providers of today could fail or rise to meet this growing opportunity.