NB-IoT technology could end up with a smaller market than its backers were originally targeting because of unexpected competition from the higher-bandwidth LTE-M standard, according to a leading chipmaker.
Eran Eshed, the co-founder and vice president of sales and marketing for Israel's Altair, says there has been growing momentum behind LTE-M in the immediate absence of NB-IoT, which is still "very far" from mass-market readiness.
Both technologies are intended to provide a cellular answer to the low-power, wide area (LPWA) network technologies that have sprung up in the last few years.
Based on unlicensed spectrum, LPWA technologies like Sigfox and LoRa are used to provide connectivity for devices like smart meters that transmit small bursts of data traffic and may be in the field for a long time.
Originally dismissive of the LPWA threat, the cellular industry changed its tune when it saw the growing interest in Sigfox among companies looking for a more "narrowband" option than cellular could offer, say analysts.
LTE-M supports higher-bandwidth connections than NB-IoT and for that reason has been criticized as a poor substitute in many scenarios.
But Eshed reckons the performance characteristics between the two cellular technologies have turned out to be negligible. He says operators are now opting for LTE-M because NB-IoT has a more immature ecosystem and remains harder to introduce into an existing 4G network.
"The perception that LTE-M was too 'broadbandish' to compete with Sigfox and LoRa is what created the original momentum behind NB-IoT," he tells Light Reading. "But since NB-IoT was ratified about a year ago it has become clear that the differences between LTE-M and NB-IoT are not significant at all in terms of performance, cost and power consumption."
Others have similarly suggested that interest in LTE-M could impede the adoption of NB-IoT. Tom Rebbeck, a research director with the Analysys Mason consulting group, earlier this year said LTE-M's global momentum could pose a threat to NB-IoT. Georges Karam, the CEO of Altair rival Sequans, shares Eshed's view that LTE-M and NB-IoT are not as different as some commentators have made out. (See Could LTE-M Torpedo NB-IoT? and NB-IoT Interoperability a Problem, but It's Being Fixed – Sequans CEO.)
"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," said Karam during an interview with Light Reading last month. "If they can, NB-IoT will have more problems."
While Altair Semiconductor develops dual-mode chips that support both LTE-M and NB-IoT, Eshed thinks it will be another year before NB-IoT networks are supporting services in a meaningful way. "The fact is that the ecosystem is absolutely not there," he says.
Too much bother
The hassle of deploying NB-IoT could also be off-putting to operators, according to Eshed. "NB-IoT requires the deployment of new infrastructure and the installation of a new core network," he says. "LTE-M is much simpler -- you just update the RAN [radio access network] with software and you are done."
The difficulty of integrating NB-IoT is a direct result of paring back the technology to make it as low cost as possible, says the Altair executive. "Being able to reduce costs to support something like NB-IoT is a result of removing features from the definition of the standard," he explains. "In the case of NB-IoT, reducing the cost has a cost."
France's Orange (NYSE: FTE) hinted that LTE-M was more straightforward upgrade than NB-IoT during discussions with Light Reading earlier this year. It is currently using a combination of LTE-M and LoRa to support machine-based connectivity services. (See Eurobites: Orange Bangs the Drum for LTE-M and LoRa May Not Be for Long Haul at Orange.)
Industry sources including Sequans Communications have said there are also NB-IoT interoperability problems between Huawei Technologies Co. Ltd. and Ericsson AB (Nasdaq: ERIC), the world's two biggest network equipment suppliers, although Karam does not regard these problems as a major hurdle and reckons they will soon be overcome. (See Ericsson, Huawei incompatibility threatens NB-IoT – sources.)
Despite his apparent misgivings, Eshed denies he is being "negative" about NB-IoT and does not agree that demand for LTE-M could finish it off. "There will be use cases that do lend themselves more to NB-IoT," he says.
Nevertheless, nearly all chip vendors, including rivals Qualcomm Inc. (Nasdaq: QCOM) and Sequans, are now hedging their bets, he says, and developing dual-mode products that support both LTE-M and NB-IoT. "The only company developing an NB-IoT-only chip is Huawei," says Ershed.
Altair was last year taken over by Japan's Sony Corp. (NYSE: SNE) in a $212 million deal that has allowed it to combine its cellular expertise with Sony's other semiconductor capabilities.
"The idea was to build a platform that would be more than just a cellular connectivity solution or imaging or GPS," says Eshed. "Altair fits nicely into that as the long-range connectivity piece."
The company's latest "1250" integrated circuit includes GPS as well as NB-IoT and LTE-M connectivity and "opens a very significant competitive gap" with Altair's rivals, claims Eshed.
"We can support any band combination between 700MHz and 2.2GHz just by software configuration and that is truly disruptive," he says. "The security features in the chip mean that vendors can easily provision and manage devices… and it's all about half the size of a Sequans module and much lower power."
— Iain Morris, , News Editor, Light Reading