Add to del.icio.us     Digg this

July 9, 2010

CDMA-450, which is viewed as a wireless technology option to cover mostly vast rural areas in developing countries, has been making a comeback, this time in Holland.

It all comes down to identifying what else people are carrying in their pockets, Gerard van der Hoeven, strategic business developer at KPN, said at last week's Global CDMA Operation and Development Forum.

“Overall, there is a big dilemma in this M2M (machine-2-machine) area, simply because it's all about low bit rates and low speeds. On average, devices connected to the wireless network will use just about 43 percent of the total data per month," said van der Hoeven.

Plus there is an inherent Catch-22 with M2M – long lifetimes and very low numbers, van der Hoeven said.

"But at the end of the day, it's high margins,” he added, pegging the ARPU (average revenue per user) at about $6.35.

Nevertheless, legacy CDMA-450 technology is rapidly getting very popular in Holland, one of Europe's most densely populated countries.

KPN has embraced the technology as it pushes heavily into the M2M segment. With a mobile voice market close to saturation in the Netherlands, many wireless operators are desperately searching for new sources of revenue.

And now they have found CDMA-450. Not that they ever lost it, however.

When asked if the profit margins are better than voice, van der Hoeven said, “When you look at the customer lifetime, it's very good business.”

KPN has setup an entirely new network on CDMA-450 exclusively for M2M and smart metering, van der Hoeven said. So far the wireless carrier has deployed about 50 base stations, mostly at existing cell sites, that cover about 15 percent of the country and it also built a metering solution and even a data center.

CDMA-450 is “a lot safer and it won't harm your existing customers,” he said, adding that smart metering and smart grid applications are best suited for this type of network. “This is a really good alternative.”

KPN actually started in the M2M space with a pair of Dutch utility companies that control about 69 percent of the whole market. CDMA450 became the logical network step based on the heavy demands that utility companies were making, van der Hoeven said.

The utilities wanted guaranteed service for at least 15 years, high security, high availability and deep indoor coverage to reach customer's metering closets, which are often placed in the center of the home throughout Holland.

Overall, KPN plans to focus on the utilities through the remainder of the year and then hopes to expand its machine-2-machine business on a much larger scale.

“But nevertheless, there's still isn't much focus on M2M and its hardware. Many suppliers are working to get that moving, however” said van der Hoeven.

Add to del.icio.us     Digg this

Source: KPN.