NB-IoT Interoperability a Problem, but It's Being Fixed – Sequans CEONB-IoT Interoperability a Problem, but It's Being Fixed – Sequans CEO

The boss of European chipmaker Sequans has confirmed that interoperability between Ericsson and Huawei remains a problem in the NB-IoT market but says he expects this to be fixed in the next few months. (See Ericsson, Huawei incompatibility threatens NB-IoT – sources.)Georges Karam, the CEO of Paris-based Sequans, said problems could be traced back to Huawei's original launch of technology based on the expertise of Neul, a small UK-based connectivity specialist it acquired in 2014. (See Huawei Spends $25M on Neul's IoT Smarts.)While this technology was promoted as NB-IoT, it has not been "100% compliant" with the 3GPP's NB-IoT standard and has required modification, according to Karam."The system was working within Huawei… but if you put a Huawei device in the path of Ericsson, then definitely you are going to get issues at the beginning," he told Light Reading. "I don't think it is a major problem and I think it will be fixed over the coming quarter."Sequans Communications has emerged as one of the main players in the market for chips based on LTE-M and NB-IoT, the cellular standards developed to support devices like smart meters that require low power and low data rate connectivity.It is supplying chips for use in Verizon's nationwide LTE-M network and counts Ericsson AB (Nasdaq: ERIC) and Huawei Technologies Co. Ltd. as technology partners. (See Verizon Takes IoT Network Nationwide.)Both vendors previously denied knowledge of interoperability problems when approached by Light Reading.UK-based Vodafone Group plc (NYSE: VOD), the biggest telco proponent of NB-IoT, last week slammed reporting about interoperability problems as "misinformation." (See NB-IoT Interoperability Problems? 'Misinformation,' Says Vodafone.)Various sources besides Sequans have now flagged NB-IoT interoperability as a problem, but Karam's is the perhaps most authoritative voice given his company's role in the ecosystem.His take on the issue validates what Light Reading has heard from other industry experts.Want to know more about the Internet of Things? Check out our dedicated IoT content channel here on Light Reading.Nick Hunn, the chief technology officer of WiFore Consulting, has said that Ericsson's approach to NB-IoT was to produce a "cut down, lower power variant of 4G" and that Huawei went for more of a "clean sheet" version based heavily on Neul's technology.But he has described the 3GPP's efforts to resolve these differences as a "fudge" and says they have led to firmware complications for module makers such as Telit.The 3rd Generation Partnership Project (3GPP) did not respond to queries from Light Reading about the interoperability issue, while Telit declined to comment.French software player Actility has also drawn attention to NB-IoT interoperability problems, as have US service provider Aeris Communications Inc. and Ingenu, a San Diego-based company whose proprietary technology is targeting the same opportunities as LTE-M and NB-IoT. (See NB-IoT Gets Insecurity Complex, Ingenu Seeks Funding to Support Growth and Ingenu Revs Up IoT Rhetoric.)Rivals such as Ingenu clearly have a vested interest in knocking NB-IoT, however, and most analysts, including Hunn, share Karam's view that NB-IoT will eventually overcome its problems.Karam says the growth of the NB-IoT ecosystem will help because there will be more companies that are able to correlate technical data and agree on the right "interpretation" of the technology.But he also suggests that "mistakes" in NB-IoT could have resulted from the rush to develop the standard in response to the challenge from Sigfox and LoRa, two unlicensed-spectrum technologies that have already made some headway in the market.Tom Rebbeck, a director at the Analysys Mason market research business, says the GSM Association was originally "dismissive" of any need for the cellular industry to develop a low-power, wide-area (LPWA) technology. "Then within a year they had turned around because they saw the momentum behind Sigfox and LoRa," he says.Next page: Sibling rivalrySibling rivalry

Nevertheless, as far as both Rebbeck and Karam are concerned, the real challenge to NB-IoT comes from LTE-M. (See Could LTE-M Torpedo NB-IoT?)Backed heavily by US operators AT&T Inc. (NYSE: T) and Verizon Communications Inc. (NYSE: VZ), that standard has more recently secured a commitment from France's Orange (NYSE: FTE) and is also finding a role in some Asian markets.While it supports faster connection speeds and is costlier than NB-IoT, the differences between the two standards are not extreme, says the Sequans CEO.Some big operators have turned to LTE-M because it has a more developed ecosystem and can address a broader range of opportunities than NB-IoT, he argues. And that means that module prices are falling quickly."The percentage split between LTE-M and NB-IoT will depend on whether carriers are happy about LTE-M volumes in the first year of deployment and can shrink down the cost," he says. "If they can, NB-IoT will have more problems."Karam thinks module costs for LTE-M could ultimately fall to about $7 per unit and that NB-IoT prices could eventually drop to just below $5 per unit.Sigfox has boasted that its modules cost about $2 each but Karam says that comparisons of this nature are not fair because the cellular devices incorporate features that are missing from the unlicensed-spectrum technologies."The 3GPP technologies will on paper be a bit more expensive if you do an apples-to-apples comparison, but if you were to add security and management and other layers to LoRa then it would become comparable on cost to 3GPP," he says. "This is why there is so much confusion -- the chips don't do the same things."Want to know more about 4G LTE? Check out our dedicated 4G LTE content channel here on Light Reading.If the appeal of LTE-M does constrain the opportunity for NB-IoT, then much hangs on developments in the vast Chinese market and the connectivity strategy of leading operator China Mobile Ltd. (NYSE: CHL).Publicly, the company has pushed NB-IoT rather than LTE-M, but the former technology would not work in its TDD (time division duplex) spectrum, says Karam.To make use of NB-IoT, China Mobile would need access to FDD (frequency division duplex) frequencies, he explains.While TDD runs all communications over a single block of "unpaired" spectrum, FDD uses one channel for the uplink and another for the downlink."They have not been 100% clear on this," says Karam. "They are still saying we need NB-IoT but they realize that in the meantime they don't have the frequencies and the only thing they can use is LTE-M."Given the support that LTE-M already enjoys in North America, a major commitment to the technology by an Asian heavyweight like China Mobile would "make the case harder for NB-IoT" as the globally preferred cellular standard, according to Rebbeck.Next page: Squaring up to QualcommSquaring up to Qualcomm

Sequans claims to be the first company to have developed a chip that supports both LTE-M and NB-IoT communications.Branded Monarch, that device was certified for use on Verizon's network at the start of this year, and Sequans is now engaged with other Tier 1 operators plotting their LPWA strategies, including AT&T, Orange, Vodafone, KDDI Corp. and SoftBank Corp.Sequans has a huge rival in the form of Qualcomm Inc. (Nasdaq: QCOM), but Karam insists that his company's products come with big advantages on cost and power and that Qualcomm has basically just repurposed its older technology.Other competitors include Intel Corp. (Nasdaq: INTC), which is expected to launch chips later this year, and an Israeli player called Altair Semiconductor that was acquired by Japanese electronics giant Sony Corp. (NYSE: SNE) in early 2016.Sequans is currently working on a next-generation device called the Monarch SX that will have the same modem but feature an ARM processor. Another product in the pipeline is a chip optimized for "NB-IoT only," says Karam."We think we are in good shape to capture a big market share and this is quite a sticky market because it is all about running businesses for a very long time," he says. "We are excited about the growth potential."Originally a WiMax player, Sequans dramatically shifted its focus to LTE in 2012 when WiMax ran into problems.It works exclusively on "single mode" LTE products and derives most of its revenues from chips used in a range of broadband devices, including home and mobile routers and USB dongles.After the change in strategy, revenues crashed in 2013, falling by 38% to $13.7 million. But they have risen impressively in each of the last three years and were up 40% in 2016, to $45.6 million.The company is still reporting annual losses but these narrowed from $27.4 million in 2015 to about $24.8 million last year.Karam has led the company since it was founded in 2003.— Iain Morris,  , News Editor, Light Reading