Registered users can unlock up to five pieces of premium content each month.
World’s First Two Nationwide NB-IoT Networks |
NEWS |
In July 2017, Korea Telecom (KT) and LG Uplus launched the world’s first nationwide NB-IoT network in South Korea. This is immediately followed by M1 launch of their nationwide NB-IoT network in Singapore. This means the world’s first two NB-IoT networks are in Asia Pacific.
These announcements are intriguing in two aspects. First, the largest operator in both countries, SK Telecom and Singtel, are left out of the picture. And second, where is China?
NB-IoT Becomes A Differentiating Factor for Smaller Telcos |
IMPACT |
ABI Research has on many occasions highlighted the challenges of NB-IoT deployment (here and here). SK Telecom, which is leading in South Korea’s transition to 5G, had chosen in December 2016 to focus on LTE-M and LoRa. The focus on LTE-M is very similar to the decisions by the major U.S. carriers, as SK Telecom looks to target the market for IoT devices that require more bandwidth and throughput, as well as VoLTE support, leaving LoRa to handle less sophisticated IoT devices. Singtel, on the other hand, immediately responded to the M1 launch by announcing its LTE-M and NB-IoT network rollout on the same day as M1 announcement. Better late than never.
The more intriguing question is the absence of China in all of these announcements. Before this, China was making all the right noises. SDN and NFV deployment in China had been going well, with all three major carriers joining ONAP and running trials and tests in OPNFV. The government was actively formulating policies and publishing whitepapers around Made In China 2025 and Internet Plus. These initiatives are targeted at making China as a smart industrial base, from manufacturing to utility and finance. These sectors are usually dominated by state-owned enterprises that are traditional and slow in technology adoption, and the government aims to change operational efficiency by introducing the lessons it learned from the success of IT and the telecom industry, especially through wireless connectivity and IoT. A whopping US$180 billion investment was announced in June 2017 in the effort to create the world’s largest 5G network.
At the same time, China Mobile is the world’s largest IoT company with over 100 million connections at the end of 2016. China is also at the forefront of NB-IoT standardization in 3GPP, led by Huawei and ZTE. However, when it comes to NB-IoT nationwide networks, China seems to be losing steam.
More Questions |
COMMENTARY |
There is no doubt that China’s massive geographical size is slowing down the speed of deployment. In May 2017, The Ministry of Industry and Information Technology (MIIT) announced its target for NB-IoT, namely 400,000 cell sites with NB-IoT connectivity and a total of 20 million NB-IoT connections by the end of 2017. Considering China currently has 5.6 million cell sites nationwide, 400,000 cell sites mean less than 10% of China’s cell sites support NB-IoT at the moment. Despite the relatively cheap cost of upgrading (estimated to be US$10,000 per site), the sheer number of cell sites that require upgrades will hamper NB-IoT deployment, especially in the rural areas.
In addition, China Mobile is facing challenges in substituting its existing GPRS network with NB-IoT. The telco faced regulatory restriction in refarming its existing 2G network and does not carry any FDD LTE licenses, which restricted its ability to deploy commercial NB-IoT. The matter seemed to be resolved in June 2017, when MITT announced that telcos without a FDD LTE license could still proceed with NB-IoT deployment, but the damage was already done. Furthermore, China Unicom announced its NB-IoT deployment on 900 MHz and 1800 MHz spectrum, with 900 MHz dedicated to rural areas, but the financially constrained telco focused its deployment in Shanghai and the dual spectrum deployment has slowed down the deployment speed.
Interestingly, like South Korea and Singapore, the smallest Chinese telco is the most aggressive when it comes to NB-IoT deployment. China Telecom currently has 320,000 cell sites that support NB-IoT. The telco is using 800 MHz for NB-IoT, benefiting from not having to support any legacy 2G networks. The telco has reached strategic partnership with many enterprises; a citywide smart water meter deployment in Shenzhen is going commercial by the end of 2017. However, the decision by China Telecom to deploy NB-IoT on 800 MHz means all three carriers are likely to use different spectrum bands for NB-IoT applications, showing no intent for collaboration and no economies of scale.