Fact Sheet: M2M at a Glance. 1. General

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1 Fact Sheet: M2M at a Glance 1. General What is M2M? Machine-to-Machine communication denotes the automated exchange of information between terminal equipment such as machines, vehicles and containers or with a central control center. M2M solutions can be used in any sector of the economy to rationalize workflows or tap into new revenue streams. How does M2M work? M2M communication can be enabled using various network and connection technologies: Mobile communications via GSM, EDGE, UMTS, HSDPA and LTE Via an ISDN or DSL wireline connection Using other standards like Bluetooth, RFID, ZigBee, WiFi or satellite radio How often is M2M already used? According to the OECD, there are currently around five billion M2M devices worldwide. By 2020, some 50 billion of the around 60 billion devices are expected to be interconnected. What economic significance does M2M have? Forrester Research expects global revenue to increase from its present level of just below USD 4.2 billion to USD 17 billion in What are the advantages of M2M? Localization: M2M enables processes to be improved and simplified. Truck capacity utilization can be increased, freight monitored or data transferred in standardized form. Customers now know where their goods are at any given time and can plan delivery routes more efficiently. 1 / 7

2 Surveillance: M2M allows users to remotely monitor whether machines are in working order. Vending machines anywhere or machines that have failed can be automatically restarted. Monitoring: M2M permits seamless monitoring of processes, such as delivery of parcels (tracking) or frozen food (proof of an uninterrupted cold chain). This improves services for customers, strengthens their loyalty and results in higher-quality processes. Maintenance: Machines or photocopiers automatically report when their stocks are running low. They can be replenished in time and remotely maintained. 2. Application scenarios M2M solutions can be used in any sector of the economy, can rationalize workflows just about anywhere and increase productivity. The associated improvements in business processes and resultant cost savings harbor enormous potential for industry, as well as for society a potential that is far from being fully tapped. Typical examples of M2M solutions in the most important sectors: Energy: Smart meters automatically and continuously supply data on power consumption and related costs, thus creating transparency for utilities and consumers. The EU has obligated all member states to fit smart meters in around 80 percent of households by Vehicle telematics Fleet management provides logistics managers with real-time data on the position and availability of their trucks. M2M also automatically shows fuel consumption and creates a vehicle log. 2 / 7

3 Travel and logistics Vehicle/freight monitoring enables permanent surveillance of the quality of goods in containers and trucks and sends data on their position, temperature, weight and humidity. If the conditions are not optimal, the devices automatically sound an alert. Healthcare Ambient assisted living: M2M services enhance the quality of life for the elderly and establish in their own home a closely-knit information and supply network integrating family members, care services, general practitioners and hospitals. Retail and commerce Digital signage denotes the display of advertising and information using electronic tickers or digital posters. They can be changed remotely at a click of the mouse to match customers' tastes, for example. Industrial automation Real-time environment data comprises various M2M solutions, e.g. for automated irrigation and measuring precipitation or soil moisture. M2M services are also used to pinpoint a farmer's livestock. Public sector Public transport description denotes M2M solutions that provide customers with prompt information, simplify ticket services and report problems. Security Remote surveillance simplifies video monitoring because the camera image can focus on suspicious activities. Remote surveillance can be automatically linked to an alarm system. 3 / 7

4 Consumer electronics Localization is more than just navigation: It can also be used to display information on sights or restaurants en route. 3. Innovations Above all, M2M ensures that many existing applications can be used more innovatively and conveniently: Car sharing: Vehicles can be located, opened and paid for using a smartphone thanks to M2M, thus enabling flexible, low-cost and environmentally friendly use of cars. Photovoltaics: If individual modules of a solar array fail or deliver less power, it usually goes undetected. However, M2M allows an array's power to be monitored and failed modules to be repaired, thus increasing the yield at the same time. Ordering service: Ordering pizza and pasta has been possible for a long time, but M2M allows it to be done faster, more reliably and without misunderstandings. Online orders are received directly in a special M2M box. Restaurants confirm the order and the delivery time via the box and the persons placing the order receive this confirmation by text message, or online. Security: Various alarm systems, such as cameras, motion sensors or sirens, can be combined with each other quickly and easily using M2M technology. Thanks to radio technology, the individual components can be mounted flexibly on buildings or at building sites without the need for cables. Animal husbandry: Farmers are automatically notified via M2M when their cows begin to calve. That improves the chances of survival and breeding results and means less sleepless nights for farmers. 4 / 7

5 4. New business models M2M not only allows companies to streamline existing processes, it also opens up whole new fields of application. Call-a-bike offerings: Bikes equipped with mobile communications technology send information to a central server. From localization to payment, the entire service runs virtually automatically. Localization as a means of preventing theft: Small M2M devices reveal the precise position of individuals, vehicles and animals to their owners at any time on demand. ecall emergency call system: All new cars sold in the EU from 2015 onward must be equipped with the emergency call system ecall. In the event of an accident, the vehicles send the GPS coordinates for the scene of the accident to the emergency services. The EU Commission expects ecall to reduce the number of deaths in road accidents by 2,500 a year. Home automation: Thanks to M2M, consumers can turn the heating and electrical appliances on and off remotely and check whether all their windows are closed using a smartphone. Telemedicine: Vital parameters of patients with chronic diseases can be monitored well via M2M. Patients can measure their blood pressure, blood sugar levels or heart activity at home. The results are then transmitted automatically and securely, and only the attending doctor has permanent access to them. Patients thus save the need to visit the doctor and enhance their quality of life. 5 / 7

6 5. How it works How does M2M work via mobile communications? Mobile communications is the key technology for M2M because it enables full-coverage transmission and remote control. Every machine in a networked M2M system has a radio module with a SIM card or SIM chip. The choice of variant depends on the M2M applications and application areas. SIM card: A conventional SIM (subscriber identification module) card such as is common in mobile phones is used in many applications. It is suitable for meeting M2M requirements under everyday conditions. M2M form factor (MFF) SIM: This SIM chip is smaller and more robust than the conventional SIM card. It has a longer service life, is corrosion-resistant and can also be used in ambiences subject to extreme temperature fluctuations. It can also be installed automatically and firmly soldered to the communications module, which means that there is less risk of it failing and also protects it ideally against being stolen. M2M rates: Every M2M application has a different use profile: Whereas an alarm system sends just a few bytes a month at the regional level, a machine monitored remotely worldwide sends and receives many megabytes in the same period of time. So that customers always obtain the best service for the best price, Deutsche Telekom has created an extremely variable M2M rates portfolio. Telekom and the customer jointly define which rate is best suited to the requirements for each application. M2M Service Portal Customers can use the M2M Service Portal of Deutsche Telekom to administer their M2M application worldwide, i.e. order, activate, deactivate or immobilize cards. Moreover, users have an overview of all the connections and costs and can see, for example, whether the connection is active and in what networks their M2M cards are currently roaming. Thresholds for example for the volume of data transferred or costs can be defined by means of individually 6 / 7

7 adjustable limits. The system issues an alarm if they are reached. Thanks to an XML SOAP interface, the monitoring and activation functions can also be integrated easily into other applications or systems. Security and connection to the company network Users can access their M2M solution using static and dynamic IP addresses and transfer data by means of virtual private networks (VPNs), thus ensuring secure protection against unauthorized access. Service level agreements Diverse service offerings are commonplace in the IT world and Telekom also provides them for M2M. They include a multilingual, round-the-clock customer hotline, reporting, monitoring and alerting or support in setup, commissioning and migration. All the offerings are available worldwide. Is M2M also possible over the fixed network? Stationary use of M2M applications is also possible for example on factory grounds or in a plant. The data is transferred over the traditional wireline infrastructure, such as ISDN, DSL and Ethernet. M2M is suitable as a backup solution for all machine communication systems based on the fixed network. Contact: Deutsche Telekom AG Corporate Communications Phone: +49 (0)228/ medien@telekom.de 7 / 7