The LPWA market has existed for about 10 years; it’s not a new thing. The current technologies (solutions) supporting this market are fragmented and non-standardized, therefore there are shortcomings like poor reliability, poor security, high operational and maintenance costs. Furthermore, the new overlay network deployment is complex. NB-IoT (Narrowband Internet of Things) overcomes the above defects, with all the advantages like wide area ubiquitous coverage, fast upgrade of existing network, low-power consumption guaranteeing 10 year battery life, high coupling, low cost terminal, plug and play, high reliability and high carrier-class network security, unified business platform management. Initial network investment may be quite substantial and superimposed costs are very little. NB-IoT perfectly matches LPWA market requirements, enabling operators to enter this new field.
NB-IoT enables operators to operate traditional businesses such as smart metering, tracking, by virtue of ultra-low-cost ($5) modules and super connectivity (100K / Cell), also opens up more industry opportunities, for example, smart city, eHealth. NB-IoT makes it possible for more things to be connected, but also managing the commercial value of the resulting Big Data is a big task, operators can carry out cooperation with related industries, in addition to selling connections, they can also sell data.
Emerging market for low power services and applications
IoT development and growing demand for LPWA: The Internet of Things – IoT – has moved from fiction to reality. By 2020, there will be over 14 billion network-enabled devices, according to the International Energy Agency. This compares to approximately 3.2 billion people using the internet. IoT dramatically widens the internet’s scope from people-operated computers towards autonomous smart devices. Often, these devices are connected to the internet for remote diagnostics and control, leading to cost savings. In addition, innovative IoT hardware and services can generate new revenues – for example, connected glasses used for industrial applications, more efficient logistics serving new market segments, or industrial appliances sold in a per-usage business model. In many cases, business users and private users can control their IoT application through existing smartphones and tablets, through mobile applications that interact with web servers which the connected objects connect to.
Many mobile operators have set up dedicated IoT/M2M business units in order to serve the growing number of companies looking to embrace the business benefits that mobile IoT brings. Larger operators have even made acquisitions so that they can serve a wider part of the value chain and capture revenues beyond pure connectivity. As the market grows, it is becoming obvious that there are many mobile IoT use cases for which existing cellular networks are not suitable.
The reasons are simple: Coverage, battery life and device cost. First, coverage: Existing cellular networks already offer very good area coverage in mature markets. However, many potential “connected objects” are located in vast remote areas, far away from the next cellular base station. If there is coverage, it is often weak which requires the device transmitter to operate at high power, draining the battery. In addition, cellular networks are not optimized for applications that occasionally transmit small amounts of data. A battery life of several years combined with an inexpensive device cannot be realized on existing cellular standards, as they do not support the required power saving mechanisms.
The third aspect is device cost: Mobile devices working on GSM, 3G and LTE are designed for a variety of services, including mobile voice, messaging and high-speed data transmission. However, NB-IoT applications do not utilize any of this; they just require low-speed but reliable data transfer, and an appropriate level of reliability. Therefore, using cellular devices for NB-IoT applications means using devices that are too expensive for the application. Many of the NB-IoT use cases require a low device price, not just in order to have a positive business case for the service operation, but also due to practical aspects such as ease of installation or risk of theft.
In summary, there are strong market trends pointing at growing demand for NB-IoT applications, while the networks that can efficiently serve such applications are not in place yet. This whitepaper examines trends in the market for NB-IoT applications and discusses technology options that operators can choose from in order to enter this new business.
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