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Maximizing M2M Business Opportunity with GSM Radio Networks

| October 26, 2011

Author: Peter Zimmermann,
Head of Global Services, M2M Solution Management ,
Nokia Siemens Networks (NSN)

GSM provides an economically reasonable connectivity solution for machine-to-machine (M2M) applications,  and it also opens up the migration path to 3G and LTE for more broadband and real-time critical M2M services. However, using GSM as a vehicle for M2M applications results in a surge in GSM traffic that could threaten network performance unless steps are taken to mitigate any impact, argues Peter Zimmermann, head of Global Services M2M solution management at Nokia Siemens Networks.


When it comes to estimating the potential of the M2M marketplace, figures vary wildly between 50 billion and 1 trillion connected devices by 2020. Although this huge variation has provoked skepticism about the actual numbers, there is no real doubt that there’s a massively increasing demand for connecting devices to networks.

M2M technologies are very diverse, but at their heart they all use a device to capture an event that is relayed by a network to an application that turns it into useful information. Demand for M2M applications such as energy monitoring is already growing rapidly across all these sectors of industry, and this will be matched in future by a second wave of growth as consumers catch on to the potential of M2M for managing everything from their entertainment systems to the food in their fridges.

Connectivity underpins everything

Communications service providers (CSPs) are of course central players in the M2M value chain, which remains fragmented and complex. A wide range of specialist skills are needed to deliver an end-to-end M2M solution and many CSPs are actively building partnerships in areas such as devices, networks, applications, business processes and with channel partners.

At the same time, they should not ignore the expertise they have built up in connectivity, since smart object connectivity – for example, for smart meters, onboard units and medical devices – underpins any M2M service.

Many observers see GSM as the natural vehicle to meet the growing need for M2M connectivity. By 2015, GSM subscriptions supporting M2M applications are expected to reach 1 billion, while data calls and signaling load are expected to rise by more than tenfold*. This increase in the use of GSM networks to support automated communication between devices and applications will make signaling capacity, traffic management and Quality of Service (QoS) significant issues for CSPs.

Promoting reliability and growth

It is essential to prevent networks from becoming overloaded with traffic, avoiding network congestion and supporting M2M reliability and growth.

The network demands imposed by each device using an M2M application are typically minute compared to those of many data-hungry smart devices (person-to-machine) applications. Nevertheless, M2M applications create both additional information and – perhaps even more importantly – a major additional signaling load on the network.

In mass-M2M applications such as smart metering, for example, the additional monthly payload is typically less than 1 Megabyte per subscriber device. Similarly, in fleet management applications, the monthly transaction payload associated with keeping track of a vehicle several times per minute will typically add up to around 200 MB.

In both cases, the key issues are the huge number of small transactions loading both signaling and traffic channels and the overall data volumes from multiple devices.

Since M2M data transactions are expected to grow more than ten times over the next few years, signaling could become a big issue for CSPs. The Nokia Siemens Networks M2M software suite reduces signaling load by up to 70%.  This can reduce the operating costs significantly compared to other solutions.

Innovative features

The M2M software suite for GSM is based on a precise paging feature invented by Nokia Siemens Networks. This innovation efficiently reduces the amount of signaling information between M2M mobile stations and base transceiver stations. As a result, GSM operators with M2M service businesses don’t require additional carrier units or new base station sites to accommodate more M2M users.

M2M applications vary significantly in how critical and time-sensitive the information is. For example, it may be vital for security and health-related information to get through right away, while a lower priority could be given to routine metering information without impairing overall performance. It is therefore important to offer priority class-based Quality of Service (QoS) to prioritize urgent M2M transactions. This approach also enables CSPs to manage less critical loads during peak hours, which helps to maintain the quality of service for other data users, making the network more robust against the surge of M2M traffic.

An additional Smart Resource Adaptation (SRA) feature in the M2M suite enables up to five times more M2M subscriptions over the same network by allocating radio resources according to need instead of the traditional allocation according to device capability (multi slot class).

M2M can be a low-ARPU environment and calls for advanced solutions that can deliver low-cost operation across multiple applications and industries. It’s also a fast-moving market that demands an agile approach to research and development.

The communications industry is on the verge of wide-scale adoption of M2M across utilities; smart grid; transportation and automotive; logistics; security and surveillance as well as retail and vending. This will have a profound impact on networks in the same way that the arrival of smartphones forced many CSPs to re-examine their traffic management strategies. M2M applications can provide enormous benefits, but only if CSPs take the necessary steps to mitigate the impact of extra traffic in the networks. Including GSM into the M2M equation can help them continue to deliver a smooth, high-quality experience to all their network customers.

* Nokia Siemens Networks estimate.


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