LPWAN: delayed deployment of NB-IoT and LTE-M benefits LoRa and Sigfox

Technical issues and questions of enterprises and OEMs delay the deployment of cellular LPWA network standards NB-IoT and LTE-M. Non-cellular standards, mainly LoRa and Sigfox, are expected to hold the leading share of LPWAN connections through 2024 at least – new research looks back at 2018 and ahead through 2026.
Short-term uncertainty has delayed the commercial rollout of cellular LPWA IoT solutions by 12 to 18 months and benefited Sigfox and LoRa, as both have witnessed a substantial increase in adoption from device OEMs and IoT solution vendors

The evolution of the LPWAN (low power wide area network) market remains hard to predict. LPWAN is a category of wireless IoT (Internet of Things) communication standards and solutions for IoT applications with limited data transmission needs, requiring little power, over a longer distance.

LPWAN today consists of cellular (licensed band) and non-cellular approaches. The cellular category includes NB-IoT and LTE-M, the non-cellular category LoRa, Sigfox and a range of less commonly used but often very solid options with benefits for specific use cases and industries.

Looking at the future of LPWAN technologies has proven to be hard since the early days, before cellular options existed. The number of people who believed that one or more of the current leaders wouldn’t exist anymore by now is increasing as now becomes tomorrow, next month, next year or even six years from now.

LPWAN forecast concept

The LPWAN market in flux: NB-IoT and LTE-M expected to capture over 60% of the estimated 3.6 billion LPWA network connections in…2026

The same was the case for the cellular standards: NB-IoT (narrowband IoT) and LTE-M (Long Term Evolution for Machines). Only a few years ago some mobile operators who rolled out LTE-M networks first said they would pass on NB-IoT.

Today, they offer both, simply because they had to. The whole journey towards cellular LPWAN has been one with many hurdles and issues with enough food for industry insiders to write a book on it. The specification for NB-IoT for example integrated the entirely different approaches of two industry groups with, among others Nokia, Ericsson and Intel on one hand, and Vodafone and Huawei on the other.

Anyway, the goal is not to write that book but to look at the expectations regarding LPWAN overall with a bit more attention for NB-IoT and LTE-M as ABI Research announced them early June 2019 and with quite some comments. As you can tell from the headline, deployment of NB-IoT and LTE-M and adoption have some delay while LoRa and Sigfox do well and remain in the lead.

NB-IoT and LTE-M continued to be plagued by network hardware and connectivity module issues in 2018. These ‘inherent’ problems are addressed but not over yet.

It’s not that NB-IoT and LTE-M aren’t used where they are available, it’s just that usage grows slower than anticipated due to several reasons mentioned below and that it will take at least 12 to 18 months longer before cellular LPWA network options surpass non-cellular ones in terms of connections, which brings us quite far into the next decade.

Moreover, it’s not as if all the sudden non-cellular LPWAN will disappear after give or take 2026, when NB-IoT and LTE-M are now expected to capture over 60% of the estimated 3.6 billion LPWA network connections that we’ll have by then according to ABI Research. That of course is still a long time in which many things can happen (when in 2016, merely 3 years ago, the specifications for NB-IoT, LTE-M and the lesser known cellular LPWAN standard EC-GSM-IoT were released no one expected that Huawei, one of the important players, would be where it is today, to give just one example).

NB-IoT and LTE-M in the LPWAN space

Where do we stand now with LPWAN, starting with NB-IoT and LTE-M, and what does ABI Research expect for the next years and sees as reasons and issues slowing down both?

A quick reminder: NB-IoT and LTE-M are touted as the best solutions for low power wide area networks by the industry players behind them. Both enable a large range of IoT applications with LTE-M being the best fit for non-stationary assets and the most powerful option (which also means shorter battery life, although there are good energy-saving techniques so work with a partner that knows these technologies inside-out).

NB-IoT and LTE-M deployments are still being rolled out across the globe with several countries already having one or both. Moreover, recently LTE-M roaming was activated by a group of, for now, four operators: KPN, Orange, Swisscom and AT&T.

By 2026, NB-IoT and LTE-M will capture over 60% of the 3.6 billion LPWA network connections. Of the remaining 40% share, LoRa and Sigfox will account for over 80% of the non-cellular LPWA network connections.

Yet, the two mains cellular LPWAN communication standards are far from deployed everywhere (some insiders don’t see them as responding to the typical characteristics of LPWAN by the way). However, things go fast, at least so it seems from a perspective of announcements regarding new NB-IoT and LTE-M rollouts.

The use cases for NB-IoT and LTE-M have also become clearer in the past few years, simply because now both are in use whereas three years ago they were only tested and defined by the 3GPP standards association. Use case categories for both only partially overlap. And mainly in the case of NB-IoT they also (more or less, depending on the standard) overlap with those for non-cellular options (from LPWA network ‘standards’ such as LoRa/LoRaWAN and Sigfox to less used, yet in some regions and industries more present standards, such as Wi-SUN which is a bit special and not really LPWAN).

These use cases can be found across all industries and IoT ‘categories’ where transmission of relatively small data packets over a longer range is needed with the differences, among others, being battery life, latency, bandwidth, support of mobile, indoor penetration capacities, energy-saving features and much more.

From smart cities, smart agriculture and the WAN part of smart metering and smart grid deployments to enterprise IoT, consumer IoT and industrial IoT: there is always a use case for LPWAN, cellular or not.

What is holding back NB-IoT and LTE-M for now as both fit in the road to 5G?

With the increase of announcements of NB-IoT and LTE-M rollouts and, more importantly, the business push and inherent benefits in working with operators, (from a business viewpoint and network management and quality viewpoint), one would expect that NB-IoT and LTE-M are close to gaining a larger share than their non-cellular friends.

With all the buzz regarding 5G one would expect this to be even more the case since NB-IoT and LTE-M are officially part of the 5G journey and will coexist with 5G: future-proofness is the resulting promise.

Given all mentioned and other factors it’s too soon for LTE-M and NB-IoT to surpass non-cellular LPWA networks as we know since a few years now (in number of connections). That’s not only because there are still deployments going on (non-cellular LPWA players aren’t everywhere either). And it’s not just because the mobile – cellular – industry reacted late to the demand for and popularity of LPWAN, even if the first-mover advantage and market presence of non-cellular players of course supports their ongoing growth (with mobile network operators often offering LoRaWAN on top of a cellular option or even two).

NB-IoT and LTE-M are part of the 5G journey and will coexist with 5G.

It also has to do with those issues and questions ABI Research points out. While it is generally expected that LoRaWAN will mainly continue to play a role in private networks and the very-long-term future of Sigfox is sometimes up for debate, for now these two leading (from a usage, coverage and deployment perspective) non-cellular wireless IoT standards for typical LPWAN use cases continue to be more broadly adopted. Yet, there comes an end to everything and in 2018, ABI Research predicted that in 2023 non-cellular LPWAN would have to cede its market share dominance to NB-IoT and LTE-M with smart meters and asset trackers driving the market.

ABI Research Principal Analyst Adarsh Krishnan comments on the LPWAN market evolutions and delayed deployment of NB-IoT and LTE-M
ABI Research Principal Analyst Adarsh Krishnan comments on the LPWAN market evolutions and delayed deployment of NB-IoT and LTE-M

However, according to the findings of the latest Low-Power Wide Area Network Market Data report from ABI Research, LoRa and Sigfox will continue to have the leading share of LPWA network connections until at least through 2024 because of those issues and questions.

Why will NB-IoT and LTE-M, according to the latest update from ABI Research (announced on June 6, 2019) have to wait until at least the end of 2024 to surpass their non-cellular friends in terms of number of LPWA network connections?

Looking at 2018 and at the questions telcos and others are dealing with this year ABI Research points out that:

  • NB-IoT and LTE-M continued to be plagued by network hardware and connectivity module issues in 2018. These ‘inherent’ problems are addressed this year, but they aren’t over yet.
  • Enterprises and OEMs delay deployment of NB-IoT and LTE-M. The reason: questions regarding eSIM/iSIM and the merging of NB-IoT and LTE-M into 5G standards.

Other reasons are more related with the LoRa and Sigfox ecosystems. It’s not as if they are sitting still either of course. Moreover, and this is also important for the future, do consider the fact that China is such a major market for LoRa as well as NB-IoT adoption. Current economic and political circumstances and the sheer size of the Chinese market and of the APAC region can quickly influence the overall picture.

LoRa has benefited from a multi-vendor ecosystem of gateway OEMs such as Multi-tech, Kerlink, Cisco, and Tektelic offering a wide array of gateway solutions which reduced network TCO for enterprises.

The APAC region accounted for 40 percent of the global LPWA connections in 2018 and was the main driver of NB-IoT in 2018 by a whopping 97 percent (!) of all NB-IoT connections which, says ABI Research, is still ‘significantly short of market expectation’. Yet, imagine: operators across the globe (including those in the US that started with LTE-M and for obvious reasons given the local cellular landscape wanted to pass on NB-IoT but now deployed anyway) have been and are rolling out NB-IoT networks but when you leave the APAC region out of the equation, combined they only accounted for 3 (three!) percent of all NB-IoT connections in 2018. Network rollout maps might look impressive with all the colored countries where NB-IoT and LTE-M are present but if you would make a map with colors based upon number of connections it would look pretty different.

The APAC region also will continue to ‘be a pivotal growth market for LPWA network technologies’ (non-cellular and cellular) says ABI Research. Next come Europe and North America.

LoRa and Sigfox: the drivers of the market and a look ahead

That still leaves the question how LoRa and Sigfox have been doing and what made them do well in 2018, on top of the challenges NB-IoT and LTE-M have encountered.

Or, as ABI Research Principal Analyst Adarsh Krishnan explains: “This short-term uncertainty (mentioned above) has delayed the commercial rollout of cellular LPWA IoT solutions by 12 to 18 months. But, it has also benefited Sigfox and LoRa, as both have witnessed a substantial increase in adoption from device OEMs and IoT solution vendors”.

LoRa: private networks keep growing, as does the share of LoRa devices

LoRa, which is known to grow fastest in IoT connections from private networks, continues that path and adoption grew with 75 percent.

LoRa and Sigfox will hold the leading share of LPWA networks connections at least through 2024 over cellular technologies NB-IoT and LTE-M.

The fact that LoRa networks can be deployed by enterprise customers in building their own private network and can be used by choosing an operator that offers it (so, public) as several do, certainly also in Europe, proves to be a decisive factor in the growth of LoRa adoption and the rise in LoRaWAN connections. Let’s add that there are also initiatives such as The Things Network that enable ‘makers’ to join a growing public LoRa network too.

We’ve tackled this in an interview with Tom Casaer who runs AllThingsTalk, a company that has worked and still does with several operators that offer LoRaWAN and NB-IoT and/or (soon) LTE-M in Europe with an IoT platform and services making life easy for both operators and users. Casaer also mainly believes in private networks using unlicensed spectrum as it’s easy and cheap to set up private LoRa networks without the need for a public operator. This is clearly – again – confirmed by ABI Research that further points out the fact LoRa has benefited from a multi-vendor ecosystem of gateway OEMs such as Multi-tech, Kerlink, Cisco, and Tektelic offering a wide array of gateway solutions which reduced network TCO.

ABI Research adds that, even as LoRa’s private network footprint continues to expand, connection growth in public networks will outpace private networks connecting the majority of LoRa devices by 2026. LoRa devices are also expected to have the majority share of non-cellular LPWA connections by 2026.

Sigfox: tracking and meters with high-profile projects by French companies

Sigfox had the second largest share of public LPWA network connections after NB-IoT.

While for LoRa ABI Research emphasizes the early adoption by utilities and manufacturing companies because of the flexibility in its network deployment model (both industries are advocates of private networks), the research firm points out home security, smart metering and asset tracking applications as the main drivers of growth in Sigfox connections in 2018.

By 2026, Sigfox connections will exceed 430 million end-points with significant growth coming from asset tracking applications.

As said previously, smart meters and asset trackers were also mentioned as key drivers in the growth of LPWA networks overall by ABI Research last year. In Europe, where Sigfox has the leading share of non-cellular LPWA connections, ample smart metering initiatives are ongoing in the movement towards a smart grid environment. From the perspective of asset tracking ABI Research emphasizes that Sigfox, with its Monarch service, is currently the only commercially available LPWA network solution that supports the multi-regional tracking of assets.

According to ABI Research, Sigfox saw several successful implementations from companies such as Groupe PSA, Total, Guerlain, BPW Group, Luis Vuitton (the range of suitcases that can be tracked in case of loss but aren’t for everyone’s budget) and Michelin to track assets from containers, trailers, reusable pallets, boxes, and bags. A lot of French companies indeed, just like Sigfox itself.

By 2026, Sigfox connections are expected to exceed 430 million end-points with significant growth coming from asset tracking applications per ABI Research. Sigfox still leads in Europe where its footprint is largest. However, we don’t see Sigfox being too active in several European markets and, as Tom Casaer pointed out in the before mentioned interview, as more gateways will appear in (public) non-cellular LPWA networks, noise levels will rise in unlicensed frequency bands forcing public networks to start transmitting more power with the result that battery life will go down. And battery life is key in the TCO picture and certainly still a major benefit for both non-cellular standards. Casaer expects this phenomenon to be a major challenge for Sigfox in particular.

More on the state of LPWAN

Obviously, we don’t have a crystal ball and as should be clear by now it’s not easy to predict how LPWA networks will evolve, not forgetting the fact that business drivers in the end will shape the market. If issues and questions continue to arise, NB-IoT and LTE-M might still have some challenges ahead.

Questions are driving enterprises and OEMs to delay deployment of NB-IoT and LTE-M applications, including eSIM/iSIM and the merging of NB-IoT and LTE-M into 5G standards.

Other LPWAN standards in the non-cellular space will have to continue focusing on their strengths and strike the needed partnerships to continue playing in their existing niches/regions while looking for opportunities to work with other players as some already do (e.g. Dash7 players with LoRa) or change strategy as Ingenu did with RPMA, since of the 40% share for non-cellular LPWAN connections expected by 2026, LoRa and Sigfox will account for over 80% of them according to ABI Research.

Finally, an important factor to consider: not all networks are the same even if they use the same standards. There are other elements to consider such as network management where mobile operators often perform well and have far more resources. And, as you know if you often travel, the quality of cellular networks isn’t the same everywhere either.

Far more findings, regional factors, use case and industry-specific data, recommendations, details on connections per LPWA technology and region, equipment shipment details and more in the latest Low-Power Wide Area Network Market Data from ABI Research with data from 2014 through 2026.

 

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