Is Sigfox on the Run?

Growing support for LoRa and the technologies being developed by the 3GPP is casting a long shadow over Sigfox as a viable connectivity option for Internet of Things (IoT) services that need low-power, wide-area (LPWA) capabilities.

While it would be foolish to dismiss Sigfox entirely, the French company clearly risks being marginalized in the IoT market as the world's biggest service providers throw their weight behind rival technologies.

Having completed its rollout of a nationwide LoRa network earlier this month, South Korean telco giant SK Telecom (Nasdaq: SKM) is now reported to be working on the development of a global roaming system for LoRa. According to the Korea Times, SK Telecom has already been in discussions with companies including Spanish operator Telefónica about this system, which could massively boost the appeal of LoRa by opening up new service possibilities.

What's particularly interesting about this news is that both SK Telecom and Telefónica participated in a $115 million funding round for Sigfox in early 2015. Does the recent pursuit of LoRa indicate they have lost their appetite for Sigfox?

Of course, operators frequently back more than one horse, and each may see different roles for Sigfox and LoRa. But the markets the technologies are addressing look broadly the same. And neither SK Telecom nor Telefónica appears to have done much with Sigfox so far.

LoRa has been gathering momentum in other parts of the world, too. Actility , a software company that backs LoRa, this week flagged the completion of a nationwide LoRa deployment in the Netherlands with Dutch incumbent KPN. Even more significantly, Actility has also recently teamed up with Asian hardware giant Foxconn Electronics Inc. to address opportunities in the vast Chinese market. (See IoT Startup Actility to Add 3GPP Support in 2016.)

During a conversation with Light Reading earlier this week, Actility CEO Mike Mulica became the latest industry executive to attack Sigfox. "They are a global operator and it's very difficult in their model to collaborate in the way a technology company can," he said. "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."

Like other IoT players, Mulica clearly has a vested interest in knocking the French company. Nevertheless, the attacks on Sigfox by rivals such as Ingenu , organizations backing LoRa and members of the 3GPP community, including Vodafone Group plc (NYSE: VOD), have been unusually unrestrained. (See Ingenu Revs Up IoT Rhetoric and Vodafone to 'Crush' LoRa, Sigfox With NB-IoT.)

What is even more troubling for Sigfox, however, is the mixture of criticism and stony silence from its own customers.

Last month, following a tip-off from a source close to the matter, Light Reading reported complaints made by Nigiloc, a French startup developing tracking gadgets for bicycles, about Sigfox's technology. (See Sigfox Said to Face Customer Backlash.)

"The test we have made with Sigfox for geolocation did not conform with our quality standard," said Gilbert Wilhelm, Nigiloc's CEO, in comments emailed to Light Reading. "In mobility Sigfox has important troubles [sic] for transmitting the data."

Sigfox has responded by pointing out that Nigiloc is one of its earliest customers, remains a tiny company with just a few employees and is using Sigfox in a "mobility" scenario for which it was never intended.

But this only raises further questions. For one thing, why would Nigiloc have chosen Sigfox if it had been told the technology was not entirely suitable for its needs? Citing examples of how Sigfox might co-exist with 3GPP technologies, Thomas Nicholls, Sigfox's executive vice president of communications, described a vehicle-tracking service to Light Reading. That sounds about as mobile as it gets.

Moreover, other early customers have experienced similar disappointment to Nigiloc, according to Light Reading's source. Those include Clear Channel Outdoor, an advertising company, and French insurance player MAAF. Neither would respond to requests for comment, but Sigfox did not deny they have had problems.

Sigfox did refer Light Reading to customers including Securitas Direct and cable operator Altice , with which it claims to have good working relationships. But individuals at those two organizations did not respond when approached by Light Reading. In late June, Sigfox offered to facilitate an interview with Securitas Direct, which accounts for nearly one sixth of Sigfox's business in terms of contracted connections. That interview has still not materialized.

Want to know more about the Internet of Things? Check out our dedicated IoT content channel here on Light Reading.

If LoRa is a threat, then NB-IoT and other 3GPP standards may be an even bigger one. Many cellular operators are likely to prefer technologies that use licensed airwaves to the unlicensed-spectrum alternatives of LoRa and Sigfox. They also want to use open standards, rather than proprietary technologies that drive them toward specific vendors. LoRa appears to be less proprietary than Sigfox, but neither is truly open. (See LoRa May Not Be for Long Haul at Orange.)

Sigfox could thrive by catering to the need for a much lower-cost technology than 3GPP standards will provide. It reckons the "silicon cost" of adding Sigfox to an end point will drop from about $2 to just $0.50 in the next five years, and that the equivalent cost for NB-IoT will fall from $40 to $5 over the same period. That difference will account for a huge number of business cases, according to Nicholls.

But the NB-IoT juggernaut is approaching fast. NB-IoT specifications were finally included in the 3GPP's Release 13 last month. Altair Semiconductor is expected to begin shipping NB-IoT chips in September. Actility has promised to launch a 3GPP-compatible product this year. And Vodafone plans to launch commercial NB-IoT services next year. (See Vodafone Ups IoT Stakes With 2017 Plan for NB-IoT.)

Writing off any company in such an immature market is a dangerous game. Robin Duke-Woolley, the CEO of Beecham Research, says Jasper Wireless Inc. was being dismissed as a failure back in 2008. Earlier this year, the IoT software company was bought for as much as $1.4 billion by IP equipment giant Cisco Systems Inc. (Nasdaq: CSCO).

Yet Sigfox has a lot to prove. Because it generates such little revenue from each connection, it needs huge volumes to boost sales above a reported $13.5 million last year. It refuses to say how many connections it actually supports, but is contracted to provide just 7 million globally. SK Telecom is next year aiming for 4 million LoRa connections in South Korea alone.

Clearer guidance from Sigfox on the growth of actual connections, and endorsements from some of its biggest customers, would do a lot to shore up confidence.

— Iain Morris, Circle me on Google+ Follow me on TwitterVisit my LinkedIn profile, News Editor, Light Reading

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FUWAH 7/21/2016 | 2:38:32 PM
Story Content I agree with the authors post and defense of the story content and approach.  I, for one, are following the development of each network rollouts and follow a large and quite informative take on each company and its emerging business models.

I saw no false statements here. factual commentary was put forth. Sigfox, Ingenu, LORA... they are all "pontificating" how wonderful they are and how their companies are going to be the emerging winner...sticking their chests out and roaring...

Each company out there, eventually is most likely eying an IPO... they all must watch what comes out of their mouths, if they release inaccurate or bloated forecasted information, it is the "american way" to call them into the arena with a factually based counter points......

To all of them (Sigfox-Ingenu-LORA,) if your goal is IPO...your ultimate stock and equity investors will call you out, and won't be as nice about it as Light Reading is here... to Sigfox.. get a thick skin....its only going to get worse if you don't perform to your forecasts or to the levels of reliability that is being sold into the field...

Wild West Syle Blanket Coverage Forecast and Reliability Newsreleases ultimately hit the wall if you cannot back them up to investors and customers...

Europe or US...


iainmorris 7/21/2016 | 11:46:46 AM
Re: LP WAN Thank you for your interest in Light Reading.

We are an independent organization and as such do not have any vested interests in specific technologies. We simply comment on the trends we see and raise questions where there are questions to be asked. We certainly do not have a "bee in our bonnet" about Sigfox, and we have nowhere suggested that Sigfox technology is an outright failure. But there are clearly some concerns as to whether that technology can become a global force. 

The accusations that this story is groundless and somehow cobbled together on a whim are clearly without merit. This and previous stories are based on lengthy discussions with analysts, other companies in the LPWA market and Sigfox itself, as well as input from a Sigfox customer. All of those are cited in the coverage. We have also made efforts to contact other companies working with Sigfox -- at Sigfox's own suggestion, in fact -- but have yet to hear back from the organizations approached, as noted in the article. We are open to having discussions with any customer of Sigfox that has a positive story to tell. 

Fulkrum90 7/21/2016 | 7:15:33 AM
LP WAN This is not the first time I have seen very negative articles about SIGFOX. All the previous articles were ill informed, poorly written, incorrectly investigated and unvalidated. Funnily enough all written by the same guy.


I would like to know why this guy has such a bee in his bonnet bout SIGFOX. 


As a system integrator tasked with finding solutions to headaches. Customers dont give a damn what flavour technology it is. They have a headache and will pay to get rid of it. They dont want to hear about how we do it. As SIGFOX is the only commercial LP WA network here in Ireland then I will be using it. Cheap product, cheap solution. Very happy customer. Nothing else matters. 
FUWAH 7/20/2016 | 10:28:09 AM
Unimpressed with US Sigfox Rollout Generally, the US (North American) rollout of deployed based stations and promised network capabilities thus far appears to have been unimpressive, and significantly below expectations and newsreleased statements from the company.

San Francisco and NYC aside, announcements promising 10 cities, and 100 cities deployed and covered by 2016 will completely fall short as the company is deep into Q3 and have not announced any further cities or confirmed the achivement goals set forth as forecasted.

Time will tell. End of Quarter, and End of Year goals and excpected reporting results to investors cannot be overstated when the proof ultimately hits the reporting spreadsheet reality that most likely is forthcoming.
FabienPG12 7/18/2016 | 8:48:45 AM
Tweet Tweet When you see the LoRa Alliance and Senet tweeting out this article, their true colors shine through. All this petty stuff won't even rise to the level of a footnote once LTE-M1 and NB-IOT gain momentum. 


The LoRa Alliance, Sigfox, Senet, etc. should pivot now, like Actility has. No one will be able to say they didn't see it coming. 
CTOandBu53037 7/18/2016 | 5:07:44 AM
In two words: Sigfox works I've just seen this article over Linkedin and I had to setup an account just to comment about how biased against Sigfox this text is. I've been personally working with Sigfox since 2013 as CTO in an IoT device developper company and I can only talk you from the perspective of my own experience, and today Sigfox is the only IoT technology seamlessly running out of the box with quite a great coverage quality.

Yes, we do know that in low network densified areas, driving at high speeds, Sigfox is not the most convenient technology, but we're talking here of what, 1% of the potential use cases? even less that than I think. We have shipped Sigfox enabled devices to more that 10 countries in 4 continents and all of them worked as the got them out of the box. We've installed devices in trees, lamps, containers, underground, farms, annimals, ships... and everytime we had a flawless behavior. 

I've been reading about LoRa for a long time. We know it, and we do have a base station and a few modules as it seemed that the big LoRa boom was around the corner, but till now requests about LoRa enabled products is far less that Sigfox ones, this is a fact. Of course LoRa has some advantages over Sigfox, as Sigfox has over LoRa, but this is not only a competition about technical details. It is in part, and the stakes are high, and there's a lot of discussion about this, but it's also about user experience, coverage, readiness... and Sigfox is winning in all these areas. 

I find the article quite agressive against Sigfox. All technologies have their flaws, but this article is only focusing on one side flaws!
kjsing 7/16/2016 | 9:36:52 AM
Cost disparity Does the cost comparison mentioned in the article include network subscription or is it just the node cost? A 10x cost difference over the next 5 years seems excessively high for NB-IoT to make a real impact. Especially if you start to multiply it by the millions. This leaves a lot of room open for investors to boost cheaper alternatives.
brooks7 7/15/2016 | 5:14:09 PM
Re: Geography Carol,

I thought of Wimax but the big issue always is that network building is a massively capital intensive business.  If you are going to invest in a technology, it better be something you are sure about.


cnwedit 7/15/2016 | 2:34:11 PM
Re: Geography This reminds me a bit of what Clearwire was doing with WiMAX - they were a bit ahead of the market but not early enough to gain momentum, ahead of WiFi and LTE. 
inkstainedwretch 7/15/2016 | 1:18:32 PM
Geography Mari is spot on.

Also, SigFox's other challenge is geographical. It's choices are a) blanket vast areas so that it can attract customers by boasting about its coverage, which requires capex that might never lead to adequate ROI, b) try to attract customers and then provide coverage for their needs, which is risky because without a steady influx of customers it will fail to gain critical mass, or c) try to do both, potentially compounding the risks of a) and b).

--Brian Santo
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