LPWA shows rapid growth, NB-IoT leads the pack
Many IoT applications do not require significant bandwidth or ultra-low latency to function effectively. As the world pivots to 5G, low power solutions are rapidly evolving to meet the needs of IoT. The 4G LTE standard has evolved to support the low power needs of IoT applications, including Cat 0 and Cat 1, but in 3GPP Release 13 standard, specific versions of LTE were defined that allowed for secure, low power use of LTE for IoT applications, namely LTE M and Narrowband IoT (NB‑IoT). Both are LPWA technologies that operate in licensed spectrum and were developed to meet the obvious industry need and gap that had been filled with unlicensed white space ISM band technologies.
Figure 1: 4G and 5G Roadmap, including licensed LPWAN
Source: Vodafone
There are now over 104 NB-IoT Networks and over 52 LTE M networks and the number is growing all the time. 60 of the NB-IoT networks are in Europe, while 32 are in Asia, with China in particular leading the licensed low-power charge, while the number of networks in other regions continues to show expansion.
Figure 2: LPWA Connections Forecast by Technology
Source: Strategy Analytics IoT Strategies
There are a number of reasons why mobile operators and OEMs have placed their bets on NB-IoT. Importantly, NB-IoT uses existing cellular infrastructure and standards-driven development via 3GPP.It provides improved indoor coverage, high sensitivity, ultra-low device cost ($2 in China and sub $5 elsewhere which brings it below 2G devices at scale), long battery life, improved network capacity, mobility and speed. 3GPP Release 14 has enhanced many of these features further, especially the mobility, speed, and power saving features.
NB-IoT pivotal in network migration from 2G and 3G and towards 5G
One of the most important aspects of NB-IoT is the role it will play in network migration, not only from 2G and 3G networks, many of which are going to be shut down over the coming years (see Figure 3), but also the fact that it is an ITU-endorsed 5G standard and will form the bedrock of mMTC (massive Machine Type Communications) with 5G NR.
As such, infrastructure vendors, mobile operators, OEMs and customers are able to invest in technology that has guaranteed longevity and no chance of obsolescence.
Figure 3: 2G and 3G Current and Planned Network Closures
Globally there remains a significant installed base of 2G devices; in 2019 alone, a quarter of all modules shipped were 2G devices-many of these in China where low power application needs have been significant, but this is shifting rapidly to NB-IoT devices, Not only is NB-IoT superior technologically to 2G, at the same or lower cost, as we have discussed, but it will play an integral role in the wireless foundation network. Mobile operators should make the transition sooner rather than later, as IoT device lifecycles are significantly longer than in B2C markets and the cost to make the changes to the network later will be costly and considerably more disruptive.
NB-IoT is also covered by 5G and will naturally become the technology of choice for mMTC in 5G. 5G NR (New Radio) is designed to support diverse deployment models. It is likely that from the start of 5G NR, the 3GPP will allow NB-IoT transmissions to be placed directly into the 5G NR frequency band, which requires core network RAN support. With cellular networks already in place, we believe the opportunity for these technologies are significant. The market will gradually pivot to 5G by 2026-2027. NB-IoT will see migration into the 5G standard, which positions it extremely well as a “future-proof” technology.
3GPP Release 14 enhancements enable push into new application categories
A number of use cases have emerged for NB-IoT for applications with low cost and low bandwidth application needs. Improvements in 3GPP Release 14 to coverage, battery life, speed, and mobility, as well as mainstream chipset support from major vendors such as Qualcomm, Unisoc, Hisilicon and Mediatek, have enabled the technology to push into additional categories. 3GPP Release 14 now handles power management, mobility, and throughput more effectively, which is vital for supporting security updates via FOTA for power-constrained devices.
The main category supported by NB-IoT remains smart metering. China Telecom for example already has 20 million water meters and 26 million gas meters running on the technology, while outside China there are 2 million gas meters in Italy, 10 million electricity meters in Saudi Arabia and over 2 million in Spain and South Korea. UK water utility Yorkshire Water is in the final stages of an NB-IoT and AI pilot with BT to connect almost 4,000 acoustic, flow, pressure, and water quality monitors to manage leaks and interruptions in the water network in the north of England, while Vodafone and SES Water have entered into a 10 year deal to cut water leakage by 15% over the next five years and pave the way for more than halving it by 2045.
In addition, NB-IoT is also well suited to a number of sensor-based applications, including smart parking, noise and pollution monitoring, waste management, and smart traffic monitoring. Environmental applications like measuring soil moisture, temperature and humidity levels are also optimally suited. 3GPP Release 14 improvements to the NB-IoT standard have opened up a range of new applications that leverage the improved mobility, power saving and coverage improvements. these include Other applications include cold chain vehicle and commercial cold storage, which can leverage improved signal penetration in complex environments and battery life which can last from 6 months to 2 years. Tracking applications such as commercial assets (logistics), pet/people tracking and vehicle tracking are also now viable with the Release 14 improvements, which create new service opportunities in areas such as insurance.
NB-IoT creates new benefits and facilitates new “shared service” models
While the application use cases highlighted will be familiar to many, one of the most interesting developments around NB-IoT is that it has now reached a price point and maturity to embed in a multitude of appliances to drive a new shared service model ecosystem.
Figure 4: Haier Smart Campus Architecture
Source: Haier
This is the approach that Chinese industrial conglomerate Haier is taking. Haier has been adding IoT capabilities into its products since 2015, but the capabilities offered by NB-IoT are opening up new opportunities in terms of shared service models. For example, the company has deployed the first 5G NB-IoT smart AC (Air Conditioning) system to over 1,500 campuses in China, a model it has taken to Thailand where it is recording similar success as part of a service sharing ecosystem.
By embedding NB-IoT into all its products and managing them via its platform (in conjunction with Huawei and China Telecom), it is enabling widespread deployment of its products, minimal cloud management costs for institutions and affordable pay-as-you-go options for users. In the absence of this model, it is likely much of this infrastructure would not be deployed, given the high capital cost to install and manage. The shared service model is also creating additional benefits, with the creation of 3000 new service positions and 2000 installation jobs as part of its air conditioning business.
There are also significant environmental benefits to understanding usage behaviour and enabling centralised control functions, with annual reductions of 25 million kW according to Haier. It also offers the opportunity to expand into other products on a pay-as-you-use basis (see Figure 4). Moreover, by using NB-IoT, ahead of technologies like 2G or Wi-Fi, the company claims reliable connectivity has improved from 18% with Wi-Fi, to 99.5% with NB-IoT. We expect to see more IoT shared service models gain continued traction in coming years given the mutual benefits to all participants in the ecosystem and obvious environmental and societal benefits from this appro