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Verizon's Acquisition of Hughes Telematics is Indicative of Machine-to-Machine Market Shift

by Andrew Brown | Jun 04, 2012

Verizon’s planned acquisition of major telematics provider Hughes Telematics is indicative of the continued shift in the M2M value chain as providers look to increase their capabilities to deliver value added services. Typically, carriers prefer to partner in vertical M2M segments rather than acquiring system integrators or value-added resellers. However, where there is a major opportunity in a particular segment, Tier 1 carriers will acquire additional expertise, IP and consequently customers to build on their connectivity and wholesale M2M services. Many Tier 1 carriers also have enterprise managed services capabilities and adding value added service providers in a specific segment can get them closer to offering an end-to-end solution.

In January, Verizon acquired the remaining 50% of nPhase, its joint venture for the M2M business it formed with Qualcomm in 2009/ nPhase provisioning and back-end M2M systems combined with Verizon's sales force and distribution channel was envisaged as making it easier and faster for companies to get their M2M devices running on Verizon's network.

With the acquisition of Hughes, Verizon gains access to OEM telematics, as well as fully fledged M2M fleet and mHealth solutions through two Hughes subsidiaries:

1) Networkfleet, Inc. offers remote vehicle diagnostics, GPS tracking and emissions monitoring system for wireless fleet vehicle management

2) Lifecomm offers mobile personal emergency response services through wearable lightweight device with one-touch access to emergency assistance.

Verizon is stating its firm intention to compete aggressively in the M2M market and this will reinforce Verizon’s leadership position in the North American telematics market. Nevertheless, the M2M landscape will remain very competitive. AT&T remains very strong and Sprint has carved out a market in smart metering and utilities.

What is certain is that 2012 will continue to be an exciting year in the M2M market with more mergers and acquisitions to come!

 

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