@ Global CDMA Forum: How one Dutch carrier is using CDMA450 for M2M

SHANGHAI, China — It’s not every day you hear about a European operator using CDMA technology. Even rarer than that would be any mention of CDMA450, which is mostly viewed as technology option to cover vast rural areas in developing countries.
Nonetheless, CDMA450 is finding an entirely new groove in Holland, one of Europe’s most densely populated countries.
KPN (KPN) has embraced the technology as it pushes heavily into the machine-to-machine space. With a mobile voice market close to saturation in the Netherlands, many operators are searching for new sources of revenue.
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.
“There is a big dilemma in this M2M area” because it’s all about low bit rates and low speeds, he said. On average, machines connected to the network will use less than half a megabit of data per month, he added.
There is an inherent Catch-22 with M2M – long lifetimes and very low numbers, van der Hoeven said.
But “in the end it’s high margins,” he added, pegging the average revenue per user at about $6.35.
When asked if the margins are better than voice, van der Hoeven said, “When you look at the customer lifetime … it’s good business.”
KPN got its foot into the M2M space with a pair of Dutch utility companies that control 70% of the market. CDMA450 became the logical network step based on the heavy demands that utility companies were making, he 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.
KPN setup an entirely new network on CDMA450 exclusively for M2M and smart metering, van der Hoeven said.
So far the carrier has deployed 50 base stations, mostly at existing cell sites, that cover around 15% of the country and it’s also built a metering solution and data center.
CDMA450 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 plans to focus on the utilities through the remainder of 2010 and then hopes to expand its M2M business on a much larger scale.
“There still is not so much focus on M2M and M2M hardware, but a lot of suppliers are working to get that moving,” he concluded.