LPWA Network Technologies Outlook for 2019

In 2018, network technologies witnessed significant growth in building public network infrastructure. While the Sigfox and Long Range Wide Area Network (LoRaWAN) networks were commercially available through large-scale network deployments in more than 40 countries, telcos have globally launched more than 77 Narrowband-Internet of Things (NB-IoT) and Long-Term Evolution-Category M1 (LTE-M) networks. Low-Power Wide Area (LPWA) networks added nearly 48 million new connection in 2018, with proprietary technologies accounting for over half of the market share, followed by LoRaWAN with 25% of the total LPWAN connections. Some end of 2018 highlights include:

• The LoRa Alliance introduced new enhancements to the LoRaWAN protocol to standardize Over-the-Air (OTA) firmware updates for end devices.
• During the annual Sigfox Connect event, Sigfox announced a number of new technology innovations, such as Bubbles, a beacon-based indoor location services, and the Atlas Wi-Fi service that is covered in another ABI Insight.
• On November 22, 2018, Deutsche Telekom announced plans to introduce LTE-M networks in 2019 to complement its NB-IoT network.
• On December 17, 2018, Qualcomm introduced a new LTE modem supporting global multimode LTE category M1 (eMTC) and NB2 (NB-IoT), as well as 2G/Enhanced General Packet Radio Service (E-GPRS) connectivity. Solutions based on the new 9205 LTE modem are expected to be commercially available from Gemalto, Quectel, Telit, and other cellular module vendors in 2019.
• Cellular module Original Equipment Manufacturers (OEMs) have released LTE-M and NB-IoT modules supporting multi-bands that can operate globally. On November 27, 2018, u-blox announced multi-band NB-IoT module SARA-N3 that can operate globally on any NB-IoT network. The module includes the u-blox Firmware‑Over‑the‑Air (uFOTA) client/server solution.

Sigfox: Sigfox’s network footprint continues to expand outside of its stronghold in Western Europe to countries in Asia-Pacific, Latin America, and North America. In January 2018, Sigfox signed a strategic agreement with a proposed investment of €300 million from the Chengdu High-tech Industrial Zone to deploy Sigfox networks in 20 cities after trials in 2018. During 1Q 2019, Sigfox will make an announcement about network deployments in China and India. As the Sigfox ecosystem continues to grow, end-to-end solutions targeting enterprise customers have brought initial adoption from customers that include Airbus, Total, Nestle, and Michelin. Furthermore, its Bubbles service, set to launch in 2Q 2019 will help Sigfox diversify and enter new vertical markets and IoT use cases. As an LPWA network technology, Sigfox is the most mature in the market, however, its adoption has grown at a relatively much lower pace than its competitors. At the end of 2017, Sigfox claimed to have 2.5 million endpoint connections, which had grown to 3.8 million connections by October 2018. Sigfox’s connections grew by 34% Year-on-Year (YoY) until October 2018, but fell short of Sigfox’s own target of 6 million connections by the end of 2018.

LoRaWAN: According to Semtech, more than 200,000 LoRaWAN gateways will be deployed by early 2019 in more than 70 countries. LoRaWAN emerged in 2018 as a leading LPWA network technology, garnering support from a fast-growing IoT ecosystem. According to ABI Research’s estimates, by the end of 2018, Semtech shipped more than 57 million LoRa Integrated Circuits (ICs) and will witness a 26% YoY growth in IC shipments in 2019. During the last few years, LoRaWAN technology has witnessed increasing fragmentation, with regional variations in the technology implementation. For example, in China, one of the biggest markets for LoRa chipsets, the China LoRa Application Alliance (CLAA), has developed its own LoRa protocol by modifying the LoRaWAN protocol to meet its domestic network security requirements. Similarly, private networks deployments have also witnessed significant adoption of LoRa Phy, running proprietary protocols to meet specific applications’ network requirements. However, as the LoRaWAN footprint continues to expand, higher costs associated with building and maintaining proprietary solutions are expected to be less appealing to end users. Similarly, the Collaborative Location Service (COLLOS) platform from Semtech has received lukewarm response from its ecosystem, with many early adopters of LoRaWAN developing their own location solution, such as Kerlink’s Wanesy Geolocation services or EveryNet’s proprietary geolocation suite.

LPWA-LTE: Standardized in 3GPP release 13 (LTE advanced pro), NB-IoT and LTE-M have witnessed network deployments in more than 40 countries. Since the standardization in July 2016, cellular LPWA technologies have witnessed significant growth in network deployments, but have severely lacked in adoption among device OEMs. This has largely been attributed to changes in NB-IoT and LTE-M software stacks. As a result, technology vendors have not been able to guarantee the requiredService Level Agreements (SLAs), subsequently leading to low adoption of the technology. At the end of 2018, cellular LPWA accounted for 7.8 million connections, of which NB-IoT connections accounted for two-thirds of the total. In 2019, the number of telcos that support both LTE-M and NB-IoT networks is expected to increase and cellular modules supporting multi-mode LTE-M and NB-IOT with 2G/3G fallback will be a popular implementation format. Cellular LPWA network technologies—NB-IoT and LTE-M—are expected to evolve as part of 5G. However, considering the challenges the technologies have faced, there are discussions on a clean slate approach for massive IoT applications within the 5G specification. Although NB-IoT and LTE-M implementations have been achieved through software upgrades, telcos have invested significant Capital Expenditure (CAPEX) in their networks and have yet to see any significant returns on investment.

Other Proprietary Technologies:These include other non-cellular LPWA connectivity technologies from solution providers, including Ingenu, Weightless SIG, Sensus, Aclara, and LoJack. Application-specific and customized LPWA network technologies will continue to witness growth, especially in private or enterprise networks. Proprietary LPWA technology in 2018 accounted for nearly two-thirds of the overall LPWA market and it will witness 28% YoY growth in 2019, largely driven by continued adoption in the smart metering market.

LPWA network technologies are best suited for massive IoT applications, which require sending small packets of data infrequently and securely, with the lowest possible power consumption. While the growth trajectory for LPWA is very good, its adoption will be even better if the collected data are used for more than simple threshold monitoring, but rather for full integration into business workflows and the associated applications. For example, an early driver for smart metering implementations by utilities focused on the benefits of IoT data for meter-to-cash functions, primarily usage-based billing, that would improve customer engagements and reduce customer churn rates. This “closed loop” use of IoT data enables businesses to fully benefit from their IoT solutions. However, roadblocks remain for closed-loop implementation of IoT data, particularly in the industrial markets.

1) Sensorization and Data Cleanliness: LWPA technologies can have some of the biggest impacts on legacy industrial equipment, which is either deep inside buildings, underground, or in remote areas. However, this equipment is either not sensorized or digitized for data extraction, or it operates using proprietary protocols requiring extensive cleansing and normalization. As in any new technology adoption, there is not enough confidence in the data and insights derived from Operational Technology (OT) devices, and in most cases, they are still being validated. Processing unstructured data from OT devices is still in the early stages of development, but as the technology matures, IoT data analytics will be trusted to make business decisions.

2) Data Silos and Information Technology (IT) Integration:Many businesses, but particularly industrial markets, operate in a very siloed fashion at many levels: organizationally, work processes, data storage, etc. For these reasons, IoT solutions will often be deployed in a siloed fashion based on proprietary solutions customized to the specific use case. This approach ultimately stifles IoT data integration, reducing the flow of information and value creation to the rest of the business.

3) Complexity in Scale:The increasing number of connected devices means that the volume of data collected is increasing exponentially. Processing data in a timely manner will be the key to connecting insights from intelligent devices and delivering action based on the context and quality of the data. The challenge with LPWA deployments is integrating data streams from the vast breadth of connections. This issue is not common today, but in a market expected to grow by 100X over the next 5 years, it is an issue needing attention, particularly as the need for real-time advanced analytics increases as markets mature. Edge computing, machine learning, and artificial intelligence will be most impactful on the IoT—to efficientlymanage IoT devices and enable scale.

By 2023, ABI Research estimates that LPWA connections will reach 1.15 billion. However, most LPWA-enabled IoT solutions will be deployed in applications like smart metering, smart cities, condition-based monitoring, and asset tracking. ABI Research believes that overcoming some of the obstacles discussed will accelerate the growth of LPWA network technologies, particularly in industrial markets, and enable greater value for business workflows. In 2018, utilities started integrating data from connected devices to improve field service management, including scheduling maintenance work orders, locating fleet vehicles, and dispatching personnel to better manage and improve SLAs. As artificial Intelligence and machine learning algorithms become more mature, data-rich IoT verticals are likely to witness early successes in closing the loop and driving scale.