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LTE & M2M: The Odd Couple?

Heavy Lifting Analyst Notes
Heavy Lifting Analyst Notes
Heavy Lifting Analyst Notes

Is it too soon to begin thinking about using Long Term Evolution (LTE) for machine-to-machine (M2M) applications? After all, most operators have barely begun building their LTE networks, and the technology is still new enough that it carries a hefty price premium over incumbents such as GPRS and CDMA 1X. And that's not even getting into the LTE's speeds, which are far more than most M2M applications need – now or ever.

So some people might be surprised to hear that a few M2M users are already requesting LTE. "I had one today where the customer wanted to run 19.2 [kbit/s] across it, but he was demanding 4G," says an executive at a router vendor that targets applications such as smart grids, ATMs, telemedicine and transportation.

The vendor says these requests are due partly to operators charging the same rates for 2G, 2.5G, 3G and 4G plans: "Why would you want a four cylinder if you can have a V8 for the same price?"

Often the motivation is "future proofing," both from a technological and market opportunity perspective. That's one key finding in the new Heavy Reading 4G/LTE Insider, "LTE for M2M: The Long-Term Opportunity Begins Now."

Residential security is one example. Those systems often remain deployed for a decade or longer, so continuing to use GPRS in new installations runs the risk of having to replace panel modules in four years. At the same time, LTE's speeds enable the possibility of upselling customers on high-bandwidth services that have yet to be developed.

Of course, operators won't shut off their legacy networks simultaneously. So, in theory, M2M users could switch from one legacy network to another operator's legacy network to postpone the cost of upgrading to 3G or 4G. T-Mobile, for example, wants to capitalize on AT&T's GPRS sunset in 2017.

"There's a strong future for 2G with us," says Rusty Lhamon, T-Mobile USA director of M2M. "In M2M, we see this something that's expanding as we look at some of our competitors sunsetting their 2G networks, and they're looking for a soft spot to land."

To make LTE attractive to more M2M users, some mobile operators and vendors are exploring the possibility of stripping down modules to support only one or two LTE bands. Another proposal would produce LTE modules that have lower throughput capabilities and thus lower cost – a plus in a market that's notoriously price-sensitive.

Many operators and vendors also hope that a diversity of both patent holders and chipset makers will help drive down LTE module costs. "The number of LTE chipset providers is much greater than 3G or even GPRS chipset providers," says one major module vendor. "It's more than Broadcom, Qualcomm and Intel."

The bottom line: Don't be surprised to find LTE coming soon to a device near you – and not just in the form of a tablet or smartphone. — Tim Kridel, Contributing Analyst, 4G/LTE Insider

This report,"LTE for M2M: The Long-Term Opportunity Begins Now," is available as part of an annual subscription (6 issues per year) to Heavy Reading 4G/LTE Insider, priced at $1,595. Individual reports are available for $900. To subscribe, please visit: www.heavyreading.com/4glte.

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