Will T-Mobile's NB-IoT Undercut Verizon and AT&T’s LTE-M Offerings?

T-Mobile USA, has announced that, as of July 19, 2018, its Narrowband Internet of Things (NB-IoT) rollout in the United States has complete population coverage. T-Mobile claims the network covers 2.1 million square miles and almost 320 million people through a combination of new hardware to older basebands and software upgrades to new basestations. T-Mobile has certified modules from u-blox and Quectel Wireless Solutions that are based on chipsets from Qualcomm.

In early 2018, T-Mobile introduced NB-IoT connectivity and modules at US$6/year for 12 MB and US$5 per module. The u-blox SARA‑R410M‑02B is a compact NB-IoT module offered for US$5 for orders over 20,000 units. It has also introduced a pay-per-use data plan at US$.50 cents/month, which includes 1 MB of Long-Term Evolution (LTE) data. T-Mobile’s NB-IoT solution is less than 1/8^th and 1/10^th the cost of similar IoT plans offered by AT&T and Verizon on their LTE-M networks, priced at US$45/year and US$60/year, respectively. T-Mobile is currently the first telco in the region to have deployed a NB-IoT network with nationwide population coverage but will see competition from Dish Network, which has earmarked US$1 billion for its NB-IoT network rollout for the next two years. Verizon and AT&T have also committed to roll out NB-IoT networks in Q4 2018 and Q1 2019, respectively. T-Mobile with its NB-IoT networks not only competes with Verizon and AT&T but also emerging cable Multiple System Operators (MSOs) such as Comcast (Foresight) and Cox that are building LoRaWAN infrastructure to offer IoT services.

Verizon has acquired IoT vertical solution companies offering smart street lighting, asset tracking, and telematics, and it is integrating them to offer end-to-end IoT solutions. AT&T’s approach has been focused on building its strengths in the IoT stack through partnerships with Original Equipment Manufacturers (OEMs) and solution vendors integrating with its connectivity platform. T-Mobile, similar to AT&T, has developed solutions in collaboration with vertical solution providers offering IoT solutions as a service. For example, in Q3 2017, T-Mobile announced SyncUP FLEET, a low-cost fleet management solution at US$15/month in collaboration with Geotab.

Some of the key growth areas for massive IoT vertical applications, in other words, those deploying large numbers of endpoints, are as follows:

• Smart metering assets both for energy and water utilities. For another foresight highlighting the opportunities in smart metering, see Will Utilities Continue to Deploy Private Networks and Ignore Public LPWA Networks? (IN-5157).
• Smart street lighting. As U.S. cities continue to replace traditional street lights with energy efficient Light-Emitting Diode (LED) street lights, adoption of NEMA socket provides the connection for control cell and the luminaire, allowing for potential retrofit solutions for smart street lighting. For more details on smart street lighting, see the ABI Research foresight Analyzing the Market Adoption of LED Streetlights versus Smart Streetlights (IN-5107).
• Asset tracking applications that provide geolocation services to non-powered assets are another key growth area for cellular Low-Power Wide-Area (LPWA) technologies and will account for 70% of all endpoint connections by the end of 2023.

IoT adoption in the Business-to-Business (B2B) market will be largely driven by availability of turnkey solutions that can address key pain points in an enterprise. In the near term, IoT solutions that bring together tightly integrated hardware, connectivity, and software will witness wider adoption. Although low cost of implementation is not a prerequisite, it is a strong incentive that will drive initial adoption of massive IoT applications.

Even as NB-IoT benefits from support from multiple Mobile Network Operators (MNOs) in North America, LTE for Machines (LTE-M) will be the dominant LPWA network technology due to its early commercial availability of networks and strong backing of module vendors, hardware OEMs, and software platform vendors. LTE-M will significantly benefit from migration off of 2G/3G network connections as telcos sunset these networks. LTE-M will also witness significant adoption in asset tracking applications that require more continuous geolocation tracking services. According to ABI Research’s latest report on LPWA network technologies (MD-LPWA-104) in North America, LTE-M endpoint connections will be more than 2.5 times those of NB-IoT connections by the end of 2023.