Telit Communications has announced that it has completed the acquisition of GlobalConect, a company that provides cellular M2M connectivity services. Earlier this year Telit, which develops and manufactures wireless M2M modules, bought Motorola’s (News - Alert) portfolio, thereby underpinning its position as the world’s third largest supplier. However, the ability to offer customers an integrated module-connectivity product is a significant development since it reflects an accelerating trend within the telecommunications industry.

The average value chain is fragmented as it involves four to five different vendors and this can be confusing to the market, particularly new prospects. Which vendor should they contact when they go shopping for a solution? We have therefore witnessed telco’s making acquisitions and alliances, e.g. on July 7 TeliaSonera announced that it has joined the M2M communications alliance set up by France Telecom’s Orange (News - Alert) and Deutsche Telekom earlier this year.

The regular role of a telco in the value chain is simply that of a bit pipe, so one can question the added value they bring to a solution. In this case Orange has an established position in the M2M space via Orange Business Services, which DT and TeliaSonera (News - Alert) will presumably leverage. However, by cutting out the need for prospects to contact a telco, which can be a time-consuming, bureaucratic process, Telit now has an enhanced offer that makes a lot of sense. Module vendors work with a small army of application developers – a key player in the value chain – Telit has full control over the underlying technologies in its products. 

Oozi Cats, CEO of Telit said, “Adding wireless connectivity to our offering is an important factor for Telit’s continued growth and success. Our customers expect superior M2M solutions from one source and with the acquisition of GlobalConect we will now be in a position to address their needs more comprehensively.”

Dan Amir, CEO and founder of GlobalConect, is joining Telit to lead the company’s connectivity activities.

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