Prepaid data roaming solutions could have a significant impact on the machine-to-machine (M2M) market in Africa.
This is according to Kees Snijders, MD of Flickswitch, who notes the introduction of a prepaid data roaming solution by Vodacom will drive the growth of M2M market.
According to a Markets and Markets report, the market size of global M2M connections is expected to reach $35.16 billion by 2020, at a compound annual growth rate of 11.57% between 2015 and 2020. The market was valued at $17.18 billion in 2014.
The migration to 3G and 4G networks worldwide, different regulatory mandates by the government, and standardisation of Internet Protocol version 6 are some of the key reasons for the growth of this technology, it adds.
The Vodafone M2M Barometer report, says that more than a quarter of all companies worldwide are now using M2M, up from 12% when Vodafone first launched the report in 2013.
In South Africa this number is even higher than the global average, with 35% of companies stating that they have implemented M2M projects, it says.
He points out while Vodacom is not the first operator to go the prepaid data roaming route, it reflects the need to provide companies who are reliant on M2M solutions, including vehicle telemetry, with a more cost-effective offering.
By virtue of the fact that Vodacom is now the first operator covering South Africa and its neighbouring countries with a prepaid data roaming option, the impact on fleet management could be significant, says Snijders.
According to Wipro, telecoms will see transportation and consumer services as driving growth in the near term, with retail, finance and manufacturing offering emerging opportunities.
"In this sector, the bulk of the traffic is confined to South Africa and its neighbours. By now having a prepaid solution that can fill this gap means companies can more effectively run their telemetry and similar services."
"The key driver of prepaid M2M market growth is that there are simply no surprises with prepaid - you get what you pay for. With post-paid, you run the risk of overspending," says Snijders.
Post-paid require lengthy contracts and the user is subject to credit approval, Snijders notes, adding the user can consume services at will, depending on any prior maximum soft limit agreed with the service provider, he adds.
Snijders believes that these kinds of roaming solutions have been on the cards for a long time.
This could herald the way companies approach their M2M strategies, says Snijders, adding business and telemetry market segments have been ripe for these kinds of solutions for a while.
This can be used as a foundation to provide companies across various vertical industries with an option that can better be budgeted for, he adds.
For example, there is nothing stopping a truck driver from taking a SIM card out of a telemetry device and using it to surf the Web, says Snijders.
This could result in a massive financial implication for the organisation given the high costs of mobile roaming data, he adds. With a prepaid SIM, these costs are managed as the driver can only consume the fixed amount of data loaded on the device, notes Snijders.
"No matter how you look at it though, roaming is an expensive value proposition. However, in going the prepaid route, operators are looking to diversify their offerings and providing business with more cost-effective, long-term solutions."
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