Why the consumer IoT is stuck in the slow lane

A slow start for NB-IoT and LTE-M

For telcos around the world, the Internet of Things (IoT) has long represented one of the most promising growth opportunities. Yet for most telcos, the IoT still only accounts for a low single digit percentage of their overall revenue. One of the stumbling blocks has been relatively low demand for IoT solutions in the consumer market. This report considers why that is and whether low cost connectivity technologies specifically-designed for the IoT (such as NB-IoT and LTE-M) will ultimately change this dynamic.

NB-IoT and LTE-M are often referred to as Massive IoT technologies because they are designed to support large numbers of connections, which periodically transmit small amounts of data. They can be distinguished from broadband IoT connections, which carry more demanding applications, such as video content, and critical IoT connections that need to be always available and ultra-reliable.

The initial standards for both technologies were completed by 3GPP in 2016, but adoption has been relatively modest. This report considers the key B2C and B2B2C use cases for Massive IoT technologies and the prospects for widespread adoption. It also outlines how NB-IoT and LTE-M are evolving and the implications for telcos’ strategies.

This builds on previous STL Partners’ research, including LPWA: Which way to go for IoT? and Can telcos create a compelling smart home?. The LPWA report explained why IoT networks need to be considered across multiple generations, including coverage, reliability, power consumption, range and bandwidth. Cellular technologies tend to be best suited to wide area applications for which very reliable connectivity is required (see Figure below).

IoT networks should be considered across multiple dimensions

IoT-networks-disruptive-analysis-stl-2021
Source: Disruptive Analysis

 

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The smart home report outlined how consumers could use both cellular and short-range connectivity to bolster security, improve energy efficiency, charge electric cars and increasingly automate appliances. One of the biggest underlying drivers in the smart home sector is peace of mind – householders want to protect their properties and their assets, as rising population growth and inequality fuels fear of crime.

That report contended that householders might be prepared to pay for a simple and integrated way to monitor and remotely control all their assets, from door locks and televisions to solar panels and vehicles.  Ideally, a dashboard would show the status and location of everything an individual cares about. Such a dashboard could show the energy usage and running cost of each appliance in real-time, giving householders fingertip control over their possessions. They could use the resulting information to help them source appropriate insurance and utility supply.

Indeed, STL Partners believes telcos have a broad opportunity to help coordinate better use of the world’s resources and assets, as outlined in the report: The Coordination Age: A third age of telecoms. Reliable and ubiquitous connectivity is a key enabler of the emerging sharing economy in which people use digital technologies to easily rent the use of assets, such as properties and vehicles, to others. The data collected by connected appliances and sensors could be used to help safeguard a property against misuse and source appropriate insurance covering third party rentals.

Do consumers need Massive IoT?

Whereas some IoT applications, such as connected security cameras and drones, require high-speed and very responsive connectivity, most do not. Connected devices that are designed to collect and relay small amounts of data, such as location, temperature, power consumption or movement, don’t need a high-speed connection.

To support these devices, the cellular industry has developed two key technologies – LTE-M (LTE for Machines, sometimes referred to as Cat M) and NB-IoT (Narrowband IoT). In theory, they can be deployed through a straightforward upgrade to existing LTE base stations. Although these technologies don’t offer the capacity, throughput or responsiveness of conventional LTE, they do support the low power wide area connectivity required for what is known as Massive IoT – the deployment of large numbers of low cost sensors and actuators.

For mobile operators, the deployment of NB-IoT and LTE-M can be quite straightforward. If they have relatively modern LTE base stations, then NB-IoT can be enabled via a software upgrade. If their existing LTE network is reasonably dense, there is no need to deploy additional sites – NB-IoT, and to a lesser extent LTE-M, are designed to penetrate deep inside buildings. Still, individual base stations may need to be optimised on a site-by-site basis to ensure that they get the full benefit of NB-IoT’s low power levels, according to a report by The Mobile Network, which notes that operators also need to invest in systems that can provide third parties with visibility and control of IoT devices, usage and costs.

There are a number of potential use cases for Massive IoT in the consumer market:

  • Asset tracking: pets, bikes, scooters, vehicles, keys, wallets, passport, phones, laptops, tablets etc.
  • Vulnerable persontracking: children and the elderly
  • Health wearables: wristbands, smart watches
  • Metering and monitoring: power, water, garden,
  • Alarms and security: smoke alarms, carbon monoxide, intrusion
  • Digital homes: automation of temperature and lighting in line with occupancy

In the rest of this report we consider the key drivers and barriers to take-up of NB-IoT and LTE-M for these consumer use cases.

Table of Contents

  • Executive Summary
  • Introduction
  • Do consumers need Massive IoT?
    • The role of eSIMs
    • Takeaways
  • Market trends
    • IoT revenues: Small, but growing
  • Consumer use cases for cellular IoT
    • Amazon’s consumer IoT play
    • Asset tracking: Demand is growing
    • Connecting e-bikes and scooters
    • Slow progress in healthcare
    • Smart metering gains momentum
    • Supporting micro-generation and storage
    • Digital buildings: A regulatory play?
    • Managing household appliances
  • Technological advances
    • Network coverage
  • Conclusions: Strategic implications for telcos

 

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LPWA: Which way to go for IoT?

Introduction: Why is LPWA important?

The Internet of Things (IoT) space is huge and incredibly diverse. It spans everything from remote-control of commercial drones, to consumer wearables, in-building sensors and smart electricity metering. It has the potential to improve cities’ safety, industrial productivity and enhance human health and welfare. Each area has its own characteristics in terms of connectivity, management, platform and security requirements.

This briefing report focuses on “narrowband”, long-distance IoT connectivity – typically applications which operate at speeds of 1Mbit/s or less, and perhaps only transmit a few kilobytes per day. That contrasts with the high-speed, low-latency connections IoT connections that people reference for wearables like AR headsets, or those streaming real-time telemetry and cloud-access, from complex devices like robots or huge arrays of sensors.

It is frequently said that connectivity represents only a small percentage of the overall revenue and value opportunity around IoT. Yet while that is, objectively, true, it ignores the anchoring and potential “pull-through” on other layers, especially for LPWA and narrowband access, where optimisation for power consumption and coverage is critical for many use-cases. Provision of connectivity to a device or application gives the provider (or owner) a head-start on exploiting the entire solution stack, for example in terms of collection of operational data for machine-learning and analytics.

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Against that backdrop, it is understandable why telcos and their vendors and industry bodies are putting so much attention on IoT-centric networking. That encompasses everything from 5G headline use-cases about ultra-low latency connections, through to the desire to manage smart homes and cities’ infrastructure, or very simple sensors.

It is already clear that no one single technology – or even two or three – can cover everything to do with IoT. There are too many dimensions – between 5 and 10 important ones can be identified (see page 19 of the report) – which leads to a vast set of combinations. No vendor, and no operator, will be able to optimally cover everything, while for any given problem there is likely to be an overlap of “reasonable” solutions.

An important part of the mix, which STL Partners has considered before in 2016 is for low-power, wide-area LPWA connectivity. This is envisaged to connect many of the “billions” of endpoints which are widely anticipated – inexpensive sensors, actuators, personal devices, tags and other gadgets – and especially those spread over large distances (think 100s of metres, up to 10s of kilometres or more).

Typical LPWA / narrowband applications

In particular, LPWA focuses on low-bandwidth products, rather than those needing enough speed for video or rich telemetry to/from the cloud. Most, but not all, LPWA applications are fairly tolerant of delay/latency – temperature sensors or street-lights don’t need millisecond response times – but security may still be very important.

They need to be simple to deploy, inexpensive, energy-efficient, low-maintenance and use radio technology suitable for hard-to-reach locations. Most of the new LPWA networks can connect many end devices via a single base station, usually over a long (1-10km) distance. This brings trade-offs, however: slower data transmission rates and less-frequent updates/messages.

  • New cycle-sharing services, where the bikes don’t need special racks, but have remote-controlled padlocks and can be left/picked-up (and tracked) anywhere in an urban area.
  • Smart electricity/gas meters for homes – which may be in basements, or wherever the pipes/wires enter the building.
  • Asset-tracking, such as attaching beacons to expensive tools on large sites.
  • Smart lighting systems for cities, where lamp-posts can be switched on remotely – but also house sensors (e.g. for weather or traffic) which report back data to a central system.
  • Supply-chain management, such as monitoring of shipments of pharmaceuticals from manufacture to dispensary.

Shared bicycles’ locks have requirements for mobility & long battery life

LPWA applications

Key LPWA technologies & deployments

There are currently four main LPWA technologies that dominate IoT deployments and discussion: SigFox, LoRaWAN, NB-IoT and LTE-M (sometimes called LTE Cat-M1). There are also a number of other less-prominent solutions, which can be important for certain niches. Various hybrids and combinations are possible as well – plus many short-range solutions like Wi-Fi, ZigBee and Bluetooth, which are outside the main scope of discussion here.

The main four include two that are endorsed by the mobile industry “establishment”, as they are 3GPP standards that fit into the broader 4G family. In most cases, they are intended to work in dedicated (licensed) spectrum bands, typical for most mobile networks. The cellular LPWA variants include:

LTE-M: This is essentially a de-tuned, cheaper, lower-power version of “normal” LTE. It can also support VoLTE voice communications. It is focused on mid-range speeds of up to 1Mbit/s. An earlier version of LTE designed for M2M was called LTE-Cat1, although it is not in widespread use.

NB-IoT: This is 3GPP’s first attempt at an ultra-low power, long battery-life standard. The NB stands for Narrowband, meaning below 100kbit/s data speeds, and often considerably less than that. This means can fit into quite small slices of spectrum.

EC-GSM: As well LTE-M and NB-IoT, 3GPP is also working on a more-modern version of 2G connectivity, especially suitable for countries or rural regions which do not yet have 4G coverage, yet need an improved version of GPRS M2M, for low-power applications like agriculture. It has had little traction so far.

5G “Massive” MTC: One of the main promised use-cases of 5G networks is for ultra-dense, low- power IoT networks – potentially tens of thousands of nodes per cell, or even more. This is commonly referred to as “massive IoT” or MTC (machine-type communications). While there may be evolution of NB-IoT towards that (e.g. NB-IoT2), the full 5G version is only likely to emerge in 2020 or beyond.

Outside of the “mainstream” cellular-industry IoT connectivity technologies created by 3GPP, there is a wide variety of other options. Some of these have been created by individual vendors which retain core rights to the IPR, while others have been standardised by other IT/networking bodies such as IEEE. Mostly, they work in unlicensed spectrum – which makes them cheaper to deploy (especially in limited areas), but risks interference.

Table of Contents

  • Executive Summary
  • Introduction: Why is LPWA important?
  • Typical LPWA / narrowband applications
  • Key LPWA technologies & deployment
  • Status and deployments
  • LoRa / LoRaWAN
  • SigFox
  • Strategic considerations
  • Multiple dimensions determine the “best” LPWA for each use
  • LPWA delivery models: Service, private, solution or other?
  • Spectrum considerations
  • IoT developers and ecosystem
  • Hybrid and multiple networks
  • Conclusions and recommendations
  • Vertical solutions?
  • Conclusions

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