Turkcell broke with telecoms market tradition on Wednesday and predicted that not only will it see overall revenue growth from the machine-to-machine (M2M) space, but that ARPUs will increase as well over the coming years.
The Turkish mobile operator expects to have 6 million M2M connections on its network by 2017, up from 1.4 million at present, Ethem Eldem, corporate mobility services director at Turkcell, explained to conference attendees at Broadband World Forum in Amsterdam. It also expects average monthly revenue per connection to reach €4 by that date, up from around €2 recently.
"Still there's a huge potential," said Eldem. "We have enough numbers to make a fortune out of this."
ARPUs for the parts of an M2M service that are core to the operators are very small, such as the connectivity piece, for example. However, in certain key segments Turkcell is setting itself up as a one-stop-shop for its customers, coordinating with partners and generating higher returns.
An energy solution it provides generates €12 per month, rather than €2 or less, Eldem said. In addition to charging the customer €1.50-€2 for the connectivity, it also provides monitoring and analysis services for €3 each and the devices piece for €4.
That way, Turkcell is "owning the whole value chain," even though most of those elements are provided by partners, Eldem said.
With market regulations on energy usage leading to big businesses paying fines that account for as much as 15% of their energy bills, there is a strong market for this type of smart energy and monitoring solution in Turkey, Eldem explained. "[It provides] a huge saving monthly for them on their bills," he said.
Similarly, Turkcell can bill €8 per month for its fleet management solution, including €1 for vehicle tracking and €1.50 for location and messaging services. The latter provides "another way of increasing our ARPUs," Eldem said. With a single bill for those services, "we charge more with better ARPU."
And there are bigger ARPUs to come.
LTE is due to launch in Turkey in 2016 and will bring with it the ability for M2M operators to provide more to their customers, including better service level agreements, Eldem said. "There will be extra ARPUs from that," he predicted.
In addition, "we are considering M2M alliances" to gain an advantage in roaming, he said. Look out for an announcement on that later this year or in 2014.