IoT Strategies

Can Mobile Operators Catch Rival LPWA Network Operators?

The market is increasingly awash with low-power, wide-area networking (LPWA) technologies. Many of these are proprietary and small scale, but there are also several that have started to gain significant market traction. Further, there is a set of others that show significant potential: collectively these include the non-3GPP technologies provided by Ingenu, LoRaWAN, Sigfox, Weightless-P; and the 3GPP standards-based technologies EC-GSM-IoT, LTE Cat-M and NB-IoT.

A clear dividing line is whether or not an LPWA technology is designed to use spectrum bands licensed for the operation of public networks, or whether it is based on a non 3GPP standard and designed to be deployed in spectrum bands anyone can use. The technologies falling into the latter group have a clear march on the 3GPP-based technologies. They are widely available in the market now. Networks are being rolled out rapidly all around the world. Services are being delivered, and they are low in cost.

The 3GPP-based alternatives are following behind, with services expected to arrive in many markets in the next 18 to 24 months, and with some early infrastructure projects already underway. (Deutsche Telekom, for instance, has just announced the deployment of NB-IoT capability in its network and will start demonstrating applications very soon.) As might be expected, the 3GPP-based technologies are backed by the mobile operators with the licenses enabling them to deliver services in spectrum bands that they exclusively manage. This should give them a significant advantage in terms of ability to guarantee performance and availability.

However, many initial Internet of Things (IoT) applications will require very modest connectivity, and will be associated with very low (if any) revenue directly attributable to device connection. So while there are expected to be billions of devices -- 26 billion of them by 2020 according to Ericsson's latest forecast -- there is a question mark over whether customers will wait for 3GPP services that might be more expensive, when existing technologies will often meet their needs (for now at least).

Much will depend upon the pricing models adopted by network operators. AT&T's recent announcement that it will offer 1GB of connectivity (and 500 SMS messages) across up to a thousand devices for $25 is a case in point. It has broken away from the previous telecom model of charging a fee per device. There are not many IoT applications that will support those traditional pricing structures, even for costs as low as $1 to $2 per connected device per month. Some can be imagined, but for the large majority of use cases -- and that includes most industrial, health, energy or even connected car applications -- there are very few enterprises or consumers that will spend that kind of money. Meanwhile, AT&T's service (which also has tariff options catering to higher data traffic requirements or greater numbers of devices) enables mass connectivity, with the capacity available to use at any time within 12 months for a very low cost per device. This sort of tariff package will be needed to unseat non-3GPP LPWA rivals once 3GPP-based LPWA networks become available.

Heavy Reading's latest report, "Low-Power, Wide-Area Networking: Opportunities & Options," looks at seven LPWA technologies that are leading candidates for the construction of public LPWA networks. Each of these technologies has different characteristics -- some of a fundamental nature, others more subtle. All the differences are important because they influence the performance of the networks and their ability to meet the requirements of different IoT applications. The report considers the types of IoT applications that might be served by LPWA technologies deployed as public networks, it compares the technical capabilities of the various technologies and the network deployment implications. It reviews market traction of each technology and profiles 13 organizations that are providing (or developing) LPWA solutions for customers.

— Simon Sherrington, Contributing Analyst, Heavy Reading

Joe Stanganelli 10/17/2016 | 4:21:59 PM
Stats At this point, I am gradually becoming increasingly of the mind that speculation on these matters has reached the point of diminishing returns because of all of the contradictory forecasts and predictions (and actual facts) related to where IoT will be in 2020.

Considering we still have major IPv6 issues to resolve, among many other things, I think at this point the smart money is on covering/hedging multiple bets and gradually discarding likely "losers" for IoT connectivity competition.  The stats aren't worth worrying about so much.
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