China is the world’s largest M2M market, with 74 million connections at the end of 2014, a figure that represents almost a third of the global base. The country has become the global leader in the deployment of the Internet of Things (IoT), according to GSMA Intelligence, the research arm of the GSMA. Researchers forecast that this figure will grow to 336 million by 2020, representing a compound annual growth rate of almost 29 percent. China has benefited from proactive government support in the development of the IoT, with funding allocated as part of the country’s 12th Five-Year Development Plans and additional funding made available for research and development, the report said. The central government has also selected 202 cities, including Beijing, Guangzhou, Hangzhou and Shanghai, to pilot smart-city projects to collect, store and analyze information related to transportation, electricity, public safety and environmental factors. The report indicates that China’s mobile operators—China Mobile, China Telecom and China Unicom—are at the vanguard in the development of the IoT and are moving from a business-to-business focus to offering more sophisticated consumer-oriented propositions via partnerships with other companies such as automotive manufacturers and wearables companies.

Tarifica’s Take

We are not surprised at the results of the GSMA’s survey. China is the world’s largest mobile market (over 1.25 billion users), and the three operators have clearly invested heavily in developing IoT connectivity and leveraging their huge base to maximize the number of connections. And with the growth rate in China’s mobile market slowing steadily, it is strategically sound for the operators to seek new sources of revenue, including M2M, and to aim at expanding M2M beyond its traditional business-to-business purview and into the consumer sector. In fact, it is worth bearing in mind that the IoT is an extension of the M2M concept, broadened by the range of devices involved, and this broadening becomes possible because of the inclusion of the consumer market for systems such as connected homes and connected cars.