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Can LoRa Withstand the Cellular Stampede?

Iain Morris
1/22/2019

For anyone who gets their hands dirty with low-power, wide-area networks (LPWANs), one of the big questions of the moment is whether the cellular industry's stampede into this market -- with the development and launch of the NB-IoT and LTE-M standards -- will flatten the non-cellular technologies that preceded them. Chief among those are Sigfox, which comes from the French company of the same name, and LoRa (or LoRaWAN, to give the network protocol its correct name), whose main backer remains Californian chipmaker Semtech.

A flattening was certainly what Matt Beal, Vodafone Group plc (NYSE: VOD)'s head of technology strategy, was anticipating when he spoke with Light Reading way back in April 2016. "NB-IoT will crush Sigfox and LoRa because it means there will be no need for them," he said during Vodafone's opening of a dedicated NB-IoT lab at its Newbury headquarters in the UK. With its elephantine economies of scale, and the support of the world's biggest equipment vendors and service providers, NB-IoT would supposedly give its non-cellular rivals no chance. (See Vodafone to 'Crush' LoRa, Sigfox With NB-IoT.)

Smart cities represent a big opportunity for the developers of IoT connectivity solutions.
Smart cities represent a big opportunity for the developers of IoT connectivity solutions.

So far, it has not worked out that way. Perhaps partly because of a rushed job on standards development, the cellular LPWAN technologies have not taken off in some countries as quickly as the bulls hoped. Vodafone UK, for instance, did not announce its first trial customer for NB-IoT until last September, more than two years after the technology was first standardized. In the meantime, Sigfox and LoRa have continued to land deals. (See Ericsson, Huawei Incompatibility Threatens NB-IoT – Sources and Vodafone Brings NB-IoT to UK, Starts Trial With Scottish Power.)

Set up to promote and develop LoRa technology, the LoRa Alliance this week claimed that 100 network operators worldwide are now deploying LoRa technology. Growth this year, it says, has been explosive, with the number of devices connected to LoRa networks tripling since the start of 2018. "We've grown over 60% in terms of networks," says Donna Moore, the CEO of the LoRa Alliance. "In terms of device connections, that is in the millions and growing strongly." An industry source says 80 million connections would be a "conservative" estimate of the number today.

For all the momentum, this puts LoRa far behind the roughly 1.1 billion IoT connections expected on cellular networks in 2018, according to Ericsson AB (Nasdaq: ERIC)'s most recent mobility report. Moreover, according to the Global Mobile Suppliers Association (GSA), as many as 116 operators were deploying NB-IoT networks in August last year, with 47 then investing in LTE-M. (See IoT Boom Won't Pay Off for Mobile Operators.)

Cellular IoT Connections Per Region (Billions)
Source: Ericsson.
Source: Ericsson.

Yet NB-IoT and LTE-M would account for only a share of these cellular connections. Many are still provided using old-fashioned (and often sub-optimal) 2G and 3G technologies. In its mobility report issued in November 2017, just a few months after NB-IoT standardization, Ericsson estimated there would be around 500 million cellular IoT connections at the end of 2017. GPRS, a 2G technology, would account for most of these, it said.

Since then, a government push in China has been responsible for most of the NB-IoT growth. That endorsement seems partly an effort to support Huawei Technologies Co. Ltd. given the Chinese equipment giant's investment in NB-IoT. China Mobile, a telco building a nationwide NB-IoT network, served 384 million IoT connections at the end of September, although it is unclear whether all of these were based on NB-IoT. Take out China and the gap between cellular and LoRa might not be so extreme. (See China Mobile Sees NB-IoT Boom as Profits Rise.)

There are several reasons for an investor, and especially one outside the telecom industry, to prefer LoRa to cellular. One, perhaps, is LoRa's reliance on unlicensed spectrum. "Whenever you look at licensed spectrum, who are the people who can afford to pay? It is the big operators," says Ali Hosseini, the CEO of SenRa, an Indian operator building a LoRa network. "LoRaWAN, being more of an open community technology, allows anyone to throw up a private network without taking on astronomical fees and getting approvals from the government and so forth."

Next page: The LoRa sweet spot

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iainmorris
iainmorris
1/23/2019 | 6:10:18 AM
Re: Definitions
Thanks for the info, Alex. Will make sure to check out the research.
RethinkAlex
RethinkAlex
1/23/2019 | 5:33:43 AM
Definitions
Hi Iain. Important to note that the billion "IoT connections" that Ericsson predicted does not equal Cat-M or Cat-NB, and includes a heap of stuff that runs on the older protocols. However, I'm pretty sure that when it says "cellular IoT" we can it on its word that those are Cat-M and Cat-NB. I've seen some confusion in some outlets, resulting from that terminology.

 

Also, we have LoRa at around 40mn actual devices this year, but very quickly rising to around 540mn in 2023 - although that's not total devices, rather just our view on the key use cases. If you're interested, you can take a look here - https://rethinkresearch.biz/report/key-lpwan-use-cases-forecast-to-2023/
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