IoT Finally Gets What it Needs
By some estimates, there will be more than 20 billion Internet of Things (IoT) devices in use by 2020. As impressive as that might be, it’s possible that the amount would be even greater today if the lack of two things hadn’t limited the viability of some IoT applications:
- A low-power cellular technology, which is key for IoT applications where the device can’t be charged regularly or ever again once it’s installed.
- A low-cost cellular technology, which is key because the IoT market is notoriously price-sensitive.
These limitations persisted throughout IoT’s history because cellular operators and vendors were focused on handsets and other devices for the burgeoning consumer and business markets. Those markets have significantly different needs and wants compared to IoT. One example is an insatiable appetite for speed. By comparison, the vast majority of IoT applications work fine at 2G and 3G speeds.
As the consumer and business markets became saturated, the cellular industry was forced to look for new opportunities. That quest forced it to finally get serious about meeting IoT’s unique power and cost requirements. One result is low-power wide-area (LPWA) cellular technologies, a new category that includes several competing proprietary and standards-based technologies:
- LoRa, a proprietary technology developed by Semtech.
- Random Phase Multiple Access (RPMA), a proprietary technology from On-RampWireless.
- Ultra Narrow Band (UNB), SigFox’s proprietary technology.
- Extended Coverage GSM (EC-GSM), based on the 2G GSM standard, enabling it to benefit from GSM’s two-decade descent down the cost curve.
- LTE Machine Type (LTE-M), which uses the LTE standard but adds features to reduce power consumption and device complexity.
- Narrow Band (NB) IoT, also based on LTE, but with few other details available because standards work began only in October 2015.
Cellular Needs LPWA to Compete with Wi-Fi
IoT needs LPWA to live up to its potential. But cellular needs LPWA just as much in order to avoid to maximize revenue from IoT. Without LPWA, mobile operators risk ceding a lot of the IoT opportunity to non-cellular alternatives.
Arguably the biggest threat is Wi-Fi, partly because its chipsets are so inexpensive and partly because its indoor coverage often is superior to cellular’s. The second reason helps explain why many LPWA technologies are designed to maximize coverage: It’s not just to provide the kind of reliable connection that many IoT applications require. It’s also to help fend off Wi-Fi when those applications are indoors.
Earlier this tear, the WiFi Alliance launched HaLow brand for 802.11ah sub-GHz WiFi. HaLow uses the 900 MHz band, which provides better indoor coverage. For our analysis of HaLow, see www.wi-fi360.com/wifi-alliance-launches-halow-brand-for-802-11ah-sub-ghz-wifi.
A Crowded Field
LoRa, RPMA and UNB all use unlicensed spectrum, which could be a concern for IoT customers who perceive licensed spectrum as better able to provide the quality of service and reliability that their applications require. But LoRa, RPMA and UNB could be attractive to IoT customers that want a commercial LPWA solution now because as proprietary technologies, they don’t have to spend years going through standardization and interoperability testing before they can hit the market. Potential downsides to using a proprietary technology include a limited ecosystem, a dependence on that vendor to innovate and the possibility that the vendor could go out of business or be acquired.
The advantages of EC-GSM, LTE-M and NB-IoT include using licensed spectrum and piggybacking on the 3GPP family of technologies, which has and will continue to have the world’s largest ecosystem in terms of operators, vendors and coverage. Their major downside is time to market: EC-GSM could make its commercial debut as early as Q3 2016. LTE-M could follow sometime in 2017. NB-IoT is so new that commercial products probably won’t arrive until after 2017.
LTE-M Has a Competitive Edge
These are among the factors that operators, vendors and their investors, as well as IoT customers, should consider when deciding which LPWA technology to use. At this point, the safest bet is LTE-M because it leverages LTE, which virtually every operator and vendor is either using or planning to use. Although 3GPP is already developing a 5G standard, it continues to upgrade LTE, most recently with LTE-Advanced Pro. This continued standards work on LTE, along with the significant amount of operators worldwide that are still in the midst of deploying LTE, means that LTE-M will be able to ride its coattails deep into the next decade. This longevity is particularly attractive for IoT customers whose devices typically remain in service for five to 10 years.
LTE-M also benefits from LTE’s development and refinement of features related to security, latency and roaming. These capabilities are attractive for many IoT customers. For example, global roaming that includes fallback to 3G in areas where LTE isn’t yet available is ideal for IoT applications such as tracking shipping containers. Meanwhile, low latency is ideal for IoT applications that need voice, video or both, such as connected cars and telemedicine.
Yet another benefit of LTE-M is that it’s designed to coexist with other LTE technologies and their users. For example, LTE-M gives operators the ability to give IoT traffic lower priority when it comes to spectrum and network resources so other customers get better performance. This capability should help make LTE-M attractive to mobile operators because it helps them focus on higher-revenue, higher-margin business and consumer customers. That in turn would benefit IoT customers if it means operators can afford to cut IoT tariffs, which is another factor that’s held back the market.