The energy vertical is a primary driver machine-to-machine (M2M) services  growth in Europe, said Yankee Group analyst John Keough. The Yankee Group forecasts subscriber information module  volumes will almost triple from 23 million in 2011 to 61 million in 2015, driven in large part by automatic meter reading and home automation applications, with demand driven by government “smart grid” initiatives. 

European investments in smart grid technologies will reach $80.3 billion between 2010 and 2020, according to Pike Research (News - Alert). Smart meter deployments will hit 240 million in the same time period. 

It isn’t quite so clear the energy vertical in the United States will be so robust. “Europe is much more top-down and policy driven, with carbon reduction as the key driver,” said Jesse Berst, Smart Grid News chief analyst. “If you want to predict progress in the U.S., take the temperature of consumers and regulators. To predict it in Europe, gauge the national and regional policymakers.”

The other complication is that some mobile carriers, and the GSM Association, seem to aggregate “connected devices” such as tablets with other M2M products and sales volume. 

The GSMA (News - Alert) includes devices such as connected iPads and other media tablets in the “M2M” category. 

Some tier-one service providers also include connected devices such as picture frames, personal navigation devices in the category. Some would say M2M really is intended to describe a service where a sensor communicates with a server, and not instances where a human user is using a relatively non-traditional mobile device. 

There also seems to be growing resistance to use of smart meters on the part of U.S. consumers. Some might also question the ultimate value of meters designed to allow consumers to monitor their energy use. 

Two scientific papers published in the September 2010 issue of the publication “Building Research and Information” showed the technology alone is not enough to deliver significant domestic energy savings. 

One of the studies found that a reduction in energy demand “did not flow naturally from improved billing information.” The study found that initial savings in electricity consumption of 7.8 percent after four months could not be sustained in the medium to long term.

“Participants who kept the monitor did not manage to sustain their electricity savings any better than those without a monitor,” they said.

One suspects much of the early U.S. growth will come in the connected devices area, and not the sensor to server market that many of us consider the actual M2M opportunity.

Smart grids are a significant part of the effort to achieve a low-carbon Europe by 2050, meaning dramatic reductions in greenhouse gas emissions and the almost complete elimination of fossil fuels from its energy portfolio.

Transmission upgrades will be the biggest chunk of Europe's smart grid spending into 2020, representing 37 percent of total investments, followed by smart meters, distribution automation and substation automation, says Eric Woods, Pike Research senior analyst. 

Vodafone (News - Alert) manages the most SIMs in its European footprint, with an estimated total SIM number just over 5.9 million, says Keough.  Orange reported two million SIMs. Aside from energy, Orange is focusing its M2M efforts on five other key markets: consumer devices, health care, vehicle-related services (fleet telematics, e-toll and e-call), and supply chain and logistics. Telefónica focuses on several key verticals, including mobile payments (ATMs, vending machines, kiosks, point of sale terminals), connected energy, fleet management and mobile health.

Want to learn more about M2M technologies? Then be sure to check out the M2M Evolution conference, collocated with TMC’s (News - Alert) ITEXPO West 2011, taking place Sept. 13-15, 2011, in Austin, Texas. The M2M Evolution Conference is for those industry professionals interested in capitalizing on a rapidly growing segment of the telecom industry. The M2M Evolution Conference embraces the any-to-any strategy of the Internet today. Co-sponsored by TMC Partner Crossfire Media, it showcases the solutions, and examines the data strategies and technological requirements that enterprises and carriers need to capitalize on a market segment that is estimated to grow to $300 Billion in the year ahead. To register, click here.

Gary Kim (News - Alert) is a contributing editor for TMCnet. To read more of Gary’s articles, please visit his columnist page.

Edited by Jennifer Russell