Jun 19, 2014

LTE to spur IoT?

A few years ago, it was standard practice to associate M2M with low data rate characteristics that could be served using 2G networks. In fact, there was quite an uproar when some operators started to announce 2G network shut-down plans. Ignoring the economics of operating cellular networks, some industry commentators also talked of retaining a portion of 2G spectrum for M2M devices.

Recently, a representative[1] from Google reiterated the special characteristics (low bandwidth and inexpensive) of IoT applications and the need for a brand new network. Over the past few years, several initiatives have been launched to address the potentially massive, low data and low power requirement segment of the M2M/IoT market; Neul and SigFox are two examples that spring to mind.

It was therefore interesting to hear of a development that has been working its way through the 3GPP standards process. LTE, traditionally associated with high data-rate mobile services, is now being engineered to address M2M/IoT applications. This is not a case of data-intensive video surveillance or digital display applications but the use of LTE in moderate data rate, low cost and long battery life scenarios.

At its recent Analyst and Developer Conference, Sierra Wireless described its efforts in piloting the standardization of LTE-M (as it is referred to) over the past three years. The company also described certain design goals for LTE-M and how these are being achieved:

Design for low-mobility situations (e.g. in homes or ‘places’) means that less onerous link-budget specifications can be used to deliver throughput rates of up to 1Mbps, significantly improving in-building coverage.

An explicit goal of the standards activity is to reduce the bill-of-material costs. Sierra Wireless claimed that the long run cost trajectory for LTE-M should approach the current cost profile for 2G modems. Interestingly, a report [2] published through Cambridge Wireless echoes this message. The co-authors of this report (A Choice of Future m2m Access Technologies for Mobile Network Operators) includes mobile network operators and technology vendors. It notes that module pricing should target levels of $5/unit and lower in the long run.

By adapting the connectivity duty cycle, the connected device service life should be extended to 5 years from a standard battery power source. Should these objectives be met, the scope to apply LTE-M for IoT-like applications is projected to expand the addressable market quite considerably. Using market analyst projections, the authors of the “Future m2m Access Technologies” report consider that the addressable market could be expanded considerably through substitution and market expansion effects as illustrated below.



If this is indeed the case, LTE-M would appear to have far-reaching implications for connected device OEMs as they decide on their connectivity technology strategy. Should they adopt present-day, low data rate and long service-life solutions? Is there a time-to-market issue that forces a near term adoption of a hybrid solution based on short-range wireless technologies (e.g. Bluetooth, Wi-Fi etc.) allied to wide-area connectivity (fixed, mobile)? What are the commercial implications of anticipating a technology migration when LTE-M becomes available (sometime after 2017 before high-volume economics lead to long-run cost targets being achieved)?

For all its investment in the standardization process, Sierra Wireless also has a challenge. It has to find a way to differentiate itself competitively once the LTE-M market takes off.

Finally, are the advocates for a brand new network for the IoT correct? That’s debatable and it would be prudent not to ignore this piece of history. Barely five years ago, there was quite a marketing push by Clearwire in the USA for a network to handle high data-rate applications for an emerging class of connected devices. Very little of this materialized. The underlying technology did not generate the scale economics or the innovation necessary to deliver significantly low-cost components globally.


[1] Google Exec: Internet of Things Requires ‘Brand New Network’ (June 2014) - http://www.lightreading.com/iot/google-exec-internet-of-things-requires-brand-new-network/d/d-id/709381 

[2]  A Choice of Future m2m Access Technologies for Mobile Network Operators (March 2014) - http://www.cambridgewireless.co.uk/news/article/default.aspx?objid=46213

2 comments:

  1. 13 July 2015 update

    The vendor community is investing greater efforts into LTE-M for IoT applications.

    Link to SK Telecom and Ericsson cooperation:

    http://www.koreaittimes.com/story/51748/sk-telecom-joins-lora-alliance-promote-internet-small-things

    In June (2015), SK Telecom entered into a Memorandum of Understanding (MOU) with Ericsson, a global leading provider of telecommunications solutions and services, to collaborate on the development of LTE-based Machine Type Communications (or LTE MTC) technologies and its related business.

    Link to Huawei initiative:

    http://telecoms.com/431321/huawei-china-unicom-serve-up-cellular-iot-with-smart-parking/

    Chinese institutions China Unicom Shanghai, China Unicom Research Institute and kit vendor Huawei have developed a collaborative partnership to develop a pilot of cellular IoT (CIoT).

    Based on Huawei’s “4.5G” LTE service for machine to machine communications (LTE-M), the carrier has rolled out a trial mode of what it refers to as “Smart Parking”, and claims it to be the first commercial application of commercial LTE-based cellular IoT.

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  2. 8 Nov 2016 Update

    Sigfox undercuts AT&T, others with $2 IoT module

    Sigfox aims to undercut its rivals in the emerging IoT market with the introduction of “ultra-low cost” modules that start at $2 each.

    The French firm said it had simplified the requirements for the new chipsets, enabling it to offer them at “a historical low.” The modules are available in Europe, the Middle East and Africa for $2 each, and in Asia and the Americas for $3 each.

    Indeed, Sigfox’s new chipsets appear to be significantly less expensive than some other modules on the market in these early days of the IoT. AT&T recently outlined plans to launch LTE M modules for as little as $5 each, and chips for other Low Power Wide Area (LPWA) networks are often in the range of $5 to $10.

    Sigfox boasted that its new modules are as much as 20 times cheaper than LTE-enabled modules and five times less expensive than other competing technologies.

    http://www.fiercewireless.com/wireless/sigfox-undercuts-at-t-others-2-iot-module

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