Telecom operators’ return on investment from their IoT business will face big challenges from low cost unlicensed alternatives to cellular technologies such as NB-IoT and LTE-M.
Some companies are opting for unlicensed spectrum in order to follow a cost effective roll out strategy to win M2M customers. Companies are offering M2M services cost-effectively using unlicenced spectrum without spending on spectrum or radio development.
Telecom operators need costly spectrum to launch IoT cellular technologies such as NB-IoT and LTE-M. Juniper Research said service revenues from unlicenced low power connections will be 102 percent higher than those over their cellular counterparts by 2022.
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Juniper Research said the total number of connections leveraging an unlicenced spectrum to deliver low power M2M connectivity will approach 400 million by 2022. Connections using these technologies, such as Sigfox, LoRa and Ingenu, will rise from an estimated 50 million by the end of 2018, representing total growth of 736 percent.
Analyst firm Berg Insight says China Mobile has 200 million cellular IoT connections at the end of 2017.
“Chinese mobile operators achieved volume growth in 2017, driven by accelerating uptake of cellular IoT in the domestic market,” says Tobias Ryberg, Senior Analyst at Berg Insight and author of the report.
The strategy of mobile operators should be focused at setting cellular low power M2M prices accordingly, highlighting their superior capabilities and network reach over unlicenced connections to justify their higher subscription price and module cost.
Sam Barker of Juniper Research said: “Unlicenced spectrum M2M service providers must focus on rapid expansion of their networks’ coverage in order to offer the same breadth of services that can be offered by network operators.”
Cellular low power M2M connections will approach 100 million by 2022. Higher data rates and ubiquitous coverage of these cellular networks will accelerate smart city deployments, forecasting that low power cellular smart city connections will grow at an average annual growth rate of 313 percent over the next 4 years.
Sensors must leverage low power cellular networks if they require a data connection for reliable OTA (over the air) updates and IP-based communication. Long range capabilities of cellular low power networks, geographical coverage and high data rates will be a key differentiator from unlicenced spectrum networks.
Berg Insight says that the ten global mobile operator groups have a combined market share of 76 percent in cellular IoT. The top players reported a combined active base of 407 million cellular IoT connections at the end of H1-2017.
China Mobile, Vodafone Group, China Unicom, AT&T, China Telecom, Deutsche Telecom, Softbank / Sprint, Verizon, Telefonica and Telenor are the top IoT driven telecom operators.
Baburajan K
