IoT Startup Actility to Add 3GPP Support in 2016
Internet of Things (IoT) software company Actility plans to launch a product that will support 3GPP-based technology this year, Light Reading has learned.
The French startup has so far dedicated its efforts to the rollout of networks based on LoRa, a low-power, wide-area network (LPWAN) technology that uses unlicensed spectrum, but has always insisted it is "agnostic" when it comes to connectivity options.
Actility 's Thingpark platform essentially provides OSS and BSS functionality for IoT deployments and could be used to support networks based on 3GPP standards and running over licensed spectrum as soon as next year, according to Mike Mulica, who joined Actility as CEO in May.
NB-IoT, a cellular-industry answer to LPWA, was recently included in the 3GPP's Release 13 and has received strong backing from the UK's Vodafone Group plc (NYSE: VOD), which plans to launch NB-IoT networks in 2017. (See Vodafone Ups IoT Stakes With 2017 Plan for NB-IoT and Vodafone to 'Crush' LoRa, Sigfox With NB-IoT.)
That raises the prospect of a tie-up between Vodafone and Actility, which supplies its Thingpark platform to a number of cellular operators that have been relying on LoRa to address IoT demands.
But Mulica was quick to play down any expectations about the commercial availability of 3GPP-based services. "We'll have a product this year but I don't think there will be anything to connect -- that will happen sometime in 2017," he told Light Reading. "We'll have a product if someone wants to steal a march but I don't think the ecosystem will start that quickly."
One issue is whether 3GPP technologies will be able to match up to LoRa on cost. "Some operators think the 3GPP cost structure may be limiting in terms of driving costs down," says Mulica. "SK Telecom probably won't go with LTE-M [another 3GPP standard] but will try to drive down LoRa costs."
South Korea's biggest telco, SK Telecom (Nasdaq: SKM), has made a big commitment to LoRa technology as part of its IoT strategy, claiming to have completed the nationwide rollout of a LoRa network earlier this month, although an executive from SK Telecom previously told Light Reading "the jury is out" on a whole range of LPWA technologies. (See SK Telecom Completes Nationwide LoRa Network Rollout for IoT and SK Telecom, Telkom Indonesia Unite on IoT.)
That includes Sigfox , an LPWA technology developed by the French company of the same name, which has recently taken flak from rivals, analysts and one of its own customers. (See Sigfox Said to Face Customer Backlash.)
Mulica is dismissive of the Sigfox challenge. "They are a global operator and it's very difficult in their model to collaborate in the way a technology company can," he says. "They are at the control point of the value chain: If you are a vendor and want to work with them, they have to figure out how much value they want to share and it becomes a hard conversation."
By contrast, he expects 3GPP standards will eventually become a "big event" in the IoT industry, explaining Actility's desire to support both LoRa and 3GPP technologies.
Big IoT ambitions
After raising $25 million in funding this time last year from investors including KPN Telecom NV (NYSE: KPN), Orange (NYSE: FTE) and Swisscom AG (NYSE: SCM) (bringing the total it has so far raised to $35 million), Actility drew up an investment plan at the start of this year. But Mulica says the spending on 3GPP -- while "not insignificant" -- has not eaten heavily into available funds because Actility's platform technology was originally designed with radio protocols besides LoRa ultimately in mind.
"What our money has been going into is the build-out of networks and sales and marketing activities," he says.
Actility is now working with about 15 telecom operators globally, seven of which have already deployed national networks. Earlier today, it flagged the completion of a nationwide LoRa deployment in the Netherlands with investor and Dutch incumbent KPN: The plan is to address requirements in vertical markets ranging from agriculture to healthcare.
The energy sector is another critical area for the company, which has formed partnerships with a number of utilities launching smart energy services.
Last week, Actility also announced the formation of a potentially game-changing joint venture in China with Asian hardware giant Foxconn Electronics Inc. "We think this can be a great entry point into industrial China and we can be a full system service provider, doing both hardware and software, whereas normally we just do software," says Mulica.
While Actility seems unlikely to pursue similar arrangements in other parts of the world, the tie-up appeared to make sense in the vast Chinese market because of Foxconn's local importance as a major supplier of what Mulica calls "super-low-cost" hardware. "We'll be able to innovate with them really quickly and think we can drive really low-cost solutions into the market," he says.
In the meantime, Actility's earnings appear to be growing faster than expected. During an interview last year, former CEO and founder Olivier Hersent -- who now occupies the role of chief technology officer -- told Light Reading that Actility would generate about €5 million ($5.5 million) in revenues in 2015, grow that amount three-fold this year and become profitable in early 2017. Mulica would not divulge any specific earnings details but said the numbers would be "north" of Hersent's guidance. (See Telcos Invest in IoT Tech Startup.)
Actility generates revenues from operators on a recurring, pay-as-you-grow basis. Although its priorities are to enlarge its global footprint and add connections through operator partners, the company sees a huge opportunity to "monetize" the data being aggregated by its platform technology.
"There are lots of valuable decisions that can be taken if you have the data," says Mulica. "One decision might save you thousands of dollars while a subscription is generating only a few dollars per month."
Mulica previously worked for organizations including Phone.com, Openwave Systems Inc. (Nasdaq: OPWV), Syncronoss and Real Networks and says he was recruited as Actility's CEO because of his commercial experience in the wireless and Internet markets.
— Iain Morris, , News Editor, Light Reading