Red Flags Surround NB-IoT

With no large-scale NB-IoT deployments, Vodafone delays its NB-IoT commercial deployments in Ireland, raising doubts about NB-IoT’s business model and/or technology. While LoRa technology continues with significant momentum in the cellular community, SIGFOX announces two deals that see its networks merge with mobile network operators (MNOs). Is the merger of proprietary and standard LPWANs the way to massive scale for the IoT?

These delays in NB-IoT rollouts extend the window of opportunity for proprietary LPWAN technologies. Verizon’s announcement on March 31 (2017) regarding the nationwide launch of its LTE-M network, which seems to have gone smoothly, further raises suspicions around the ease of launching NB-IoT—both of which are claimed to be simple software upgrades to existing infrastructure. Huawei’s agreement with Sequans for LTE-M/NB-IoT silicon also seems to cast doubts about Huawei’s own HiSilicon NB-IoT chip.

From the almost simultaneous announcements of live NB-IoT network operations by Vodafone and Deutsche Telekom back in October 2016, previously reported in the ABI Research Insight, “First Commercial NB-IoT Network Launched,” we are still waiting on large-scale rollouts of the technology.

We can count almost 50 NB-IoT announcements worldwide, with none in the U.S., and with the vast majority of those not yet in commercial operation, we can only speculate on what the reasons for this might be.

One red flag comes from Vodafone, which—along with hardware vendor Huawei—originally planned commercial NB-IoT operations in Ireland and the Netherlands in January 2017, has now delayed rollouts to the summer of 2017, according to recent reports. This raises doubts concerning the status of NB-IoT networks in Vodafone’s other markets, such as in Germany, Spain, Turkey, and Australia. We speculate that, unlike LTE-M, the deployment of an NB-IoT LPWAN may not be a simple software upgrade to existing basestations, which may be a contributing factor for the delay.

Another red flag stems from Huawei, which at MWC17 announced that it plans to build 30 commercial networks in 20 countries in 2017; yet, Huawei recently announced that it had selected Sequans to furnish its Monarch LTE-M/NB-IoT chip for a new family of IoT modules. Huawei is a leading NB-IoT chipset provider from its HiSilicon subsidiary; therefore, this announcement does nothing to alleviate our concerns surrounding NB-IoT.

This is a disappointment for Vodafone, but does it have broader implications for NB-IoT technology or business models? Although we do not claim to have the answer, we see an emerging trend of MNOs merging proprietary LPWAN technology. MNOs are merging technology such as LoRa or SIGFOX with their cellular operations as one way of covering the maximum number of use cases as an alternative to 3GPP LPWAN, or to complement these technologies. 

In 2016, Vodafone was very enthusiastic about NB-IoT, claiming that at least 80% of its network basestations could support NB-IoT after a software upgrade. The software upgrade is widely believed to be less expensive than deploying new hardware; however, opponents of NB-IoT raise the possibility that NB-IoT deployments are just as expensive as deploying proprietary technologies. Other MNOs including AT&T and Verizon in the U.S. plan to deploy LTE-M, while others, including Orange in France, SK Telecom in South Korea, and KPN in the Netherlands, all deployed commercial operations using LoRaWAN hardware integrated with their cellular networks.

Support for LoRa from cellular MNOs is very strong, with some major MNOs backing the technology. We count over 50 live LoRa networks worldwide, with the majority in commercial operations with many MNOs deciding to integrate LoRa with their cellular networks. Even cable operator Comcast in the U.S. is hopping on the LoRa bandwagon, and announced its machineQ—a LoRa technology-based trial network planned for Philadelphia and San Francisco later this year. Comcast expects a 30-city commercial deployment within the next 18 to 30 months.

On the other hand, SIGFOX, which has commercial networks live in 32 countries, has—unlike LoRa—very few instances of cellular MNO’s incorporating SIGFOX technology. Perhaps in a move to replicate the success of LoRa, SIGFOX made two recent announcements, stating its networks will merge with cellular. In February (2017), Telefónica of Spain announced a global deal with SIGFOX to offer SIGFOX LPWAN across its footprint in Spain, Germany, Mexico, Colombia, Argentina, and Brazil. Additionally, on March 27 (2017), SIGFOX operator Connected Baltics OÜ announced an agreement with Telia Estonia to integrate SIGFOX with Telia Estonia’s network.

The other major LPWAN is RPMA from Ingenu, which operates its own “Machine Network” and is present in over 29 countries according to the company. Moreover, as far as we are aware, it has made no moves to integrate its Machine Network with a cellular MNO.

NB-IoT is still in the early stages of deployment, and despite its problems at Vodafone, it remains with major backing from some of the largest MNOs in the world including China Mobile, China Telecom, and China Unicom. It also finds backing in Japan from KDDI, NTT DOCOMO, and Softbank. Additionally, in Western Europe, NB-IoT is backed by Deutsche Telekom, Telecom Italia, and Telenor. NB-IoT’s detractors remain with open questions regarding link robustness and reliability, power consumption/battery life, firmware update feasibility, and cost. On the other hand, LoRa and SIGFOX also attract their fair share of detractors including those who claim that any non-standardized LPWAN has no long-term future in the cellular industry. Also, the apparent ease with which LTE-M can be deployed may decrease the attractiveness of an NB-IoT LPWAN since LTE-M can also tackle NB-IoT use cases.

These short-term delays in NB-IoT rollouts are believed to extend the window of opportunity for proprietary LPWAN technologies. While this appears to be a disappointment for Vodafone, we must determine whether this is a red flag for the technology or not. If so, is the integration of proprietary and standard LPWAN technologies the way to rapidly scale up to meet the demands of massive IoT?

We will be watching.