Berg Insight: China driving global cellular IoT adoption

20 May 2019

An “exceptional adoption” in China has lifted the global number of cellular IoT subscribers by 70% to reach 1.2 billion in 2018, says a report released by Berg Insight.

The research firm predicts that there will be 9 billion IoT devices connected to cellular networks worldwide by 2023.

China, which accounted for 63% of the global installed base in 2018, is expected to continue to be the key driver for IoT adoption, as the Chinese government is actively driving adoption as a tool for achieving domestic and economic policy goals.

“China is deploying cellular IoT technology at a monumental scale”, said Tobias Ryberg, principal analyst and author of the report.

According to data from the Chinese mobile operators, the installed base in the country increased by 124% year-on-year to reach 767 million at the end of 2018.

China has overtaken Europe and North America in penetration rate with 54.7 IoT connections per 100 inhabitants, Ryberg said.

He said the role of the government is the main explanation for why China is ahead of the rest of the world in the adoption of IoT.

“The most distinctive characteristic of the Chinese IoT market is however the way that the government is systematically using new technology to implement its vision for urban life in the 21st century,” Ryberg said.

“At the same time the private sector also implements IoT technology to improve efficiency and drive innovation.”

China has witnessed widespread adoption of connected cars, fleet management, smart metering, asset monitoring and as well as new consumer services like bike sharing.

The report also analyses the IoT business KPIs released by mobile operators in different parts of the world and found significant regional differences.

While China has the world’s highest IoT penetration rate, Europe seems to be doing a better job in terms of monetizing the IoT business.

According to the report, the monthly ARPU for cellular IoT connectivity services in China was only €0.22 ($0.25), compared to € 0.70 in Europe.

Global revenues from cellular IoT connectivity services increased by 19% in 2018 to reach €6.7 billion. The ten largest players had a combined revenue share of around 80%.

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