Berg Insight: Europe lags as M2M shifts from 2G to 3G and LTE

The proportion of machine-to-machine (M2M) connections over 3G and LTE technologies will more than double in the five years to 2018, as the industry begins moving away from traditional 2G connectivity.

Berg Insight predicts that the share of cellular M2M connections to HSPA and LTE networks will grow from under 20 per cent in 2013 to 50 per cent in 2018. The firm states the transition has been spurred by the phasing out of 2G services in some countries, which means the shift to 3G M2M connectivity is already underway.

Berg Insight also noted that the shift to 3G services will gather place as more 3G and LTE devices become available, and the research company expects deployments of the latter devices to overtake 2G units in 2017.

Europe will lag in the broader technology transition, however, due to a slower adoption rate of 3G and LTE technologies in the region, and plans for 2G that "generally extend well beyond 2020 in most countries." The U.S., in contrast, will be a leader in the shift from 2G to 3G/LTE, with Berg Insight predicting the majority of M2M hardware sold in the country in 2014 will be 3G and LTE kit. In Asia Pacific, "3G is already the standard", the company states.

Tobias Ryberg, senior analyst at Berg Insight, said the shift to 3G and LTE connections is being driven by "a general trend towards higher data consumption for most traditional M2M applications," and development of connected cars that "require mobile broadband connectivity."

Berg Insight previously forecast the number of all M2M connections will hit 213.9 million in 2014, a rise of 21 per cent over 2013. Western Europe is currently among the leading markets in terms of the number of connections, the company said.

The company tipped the number of connections to grow at a CAGR of 22.9 per cent over the next five years, to reach 599.7 million in 2019.

For more:
- see this Berg Insight announcement

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