M2M will fail without customer involvement

Many of the operators that presented at the Mobile World Congress trade show in Barcelona, Spain, emphasised that machine-to-machine connections will be part of their plans for the future, and for a few it seemed key to diverting their businesses from becoming a "dumb pipe" player.

While mobile operators seem keen to push forward with the full support of the utility companies in deploying M2M services, the involvement of a key player in the ultimate success of this effort--the consumer--seems in danger of being ignored. With many consumers being notoriously wary of adopting new technology, the idea of having their utility meters monitored and read remotely could, at best, be met with resistance unless the benefits are totally apparent.

A new study by the marketing research firm Ovum posits that there are two critical areas where efforts to gain customer engagement must be made: early stage customer acceptance and long-term customer behavioural change.

The firm claims that utility companies have so far made inadequate efforts to convince consumers of the benefits of smart metering, while regulators and governments have done little to ensure that consumers become aware and engaged.

Ovum analyst Stuart Ravens said, "The earliest smart meter deployments are reaching completion and a raft of new deployments are starting. However it is becoming clear that the most important part of the equation--the customer--has not been paid enough attention."

The analyst claims that some attempts by eager utility suppliers have encountered "smart meter backlash" from consumers failing to comprehend why they are being forced into the change. "But the greatest danger lies in how the customer relationship with smart meters will be affected in the long-term," he said in a statement. "If consumers do not use the data from smart meters to amend their energy consumption over the long-term, smart meter projects will ultimately fail."

The notion of forcing new technology onto unwilling (or unaware) consumers has failed in the past.

The move to digital TV, where consumers were told that analogue TV would be switched off, is one example. The proposed close down of FM radio in the UK is another. Needless to say this died a quick death when residents were told their existing radios, including car radios, would be obsolete.

What was lacking from these attempts, certainly the latter, was consumer motivation. Ravens believes that regulators will need to become closely involved to structure the correct incentives to persuade consumers to adopt smart meters. Regardless of this potential pitfall, another recent study conducted by Analysys Mason claims that the number of M2M devices will grow from around 60 million in 2010, to a staggering 2.1 billion by 2020.

To be fair, these are not all smart meters, with only around 60 per cent being estimated for utility supply monitoring. The security industry is forecast to take second place with a 21 per cent share, followed by the automotive and transport sector with 13 per cent of the market.

But if this growth is to be achieved, then convincing consumers of the benefits of M2M would seem to be lagging far behind the ambitious plans for the industry. --Paul