That makes sense Prabhakar but it isn't the way M2M currently operates - the operators currently make the majority of their money from those simple connections as the report shows.
Managing this change from connection-based income to service-based income is one of the things that will actually slow down the adoption of IoT - it's also why some of the large companies such as Intel are focussing on the gateway technologies - these do include the SIM card that is the heart of the charging model for the operators and allows the operator to deliver a hybrid where they can still charge for the connection, albeit to the gateway.
Then the operator wants to charge for the service that handles the data from all those sensors too, probably using a private cloud. The open, WiFI-based, public cloud, service model is a direct threat to the established revenue stream of those operators and hence the focus on the hybrid model. How service providsers can make money out of the IoT has yet to be proven though, which is another reason why the oeprators are moving more slowly.
Pure M2M connectivity is meaningless and hence no sunstantial revenues can be expected from such services.
The real money makers will be thos ewho provide solutions based upon the M2M connectivity. and such solutions could be anything that one can imagine. So innovators have a great chance here to offer new services , new applications .
For example a washing machine company could have a centraslise service to monitor the service parameters of all the machines it has sold worldwide, collect data of their performance, failures etc .
A courier company could have automated tracking of their goods in transit as the goods themselves will be transmitting their location information.
So with M2M, new players will come onto the horizon with new apps and services .