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One of the most important IoT developments in 2017 – and one we expect to hear plenty of news about at the upcoming Mobile World Congress – will be the first commercial deployments of new licensed spectrum LPWA technologies NB-IoT and LTE-MTC Cat M1 (LTE-M). Combined with the ongoing deployment of unlicensed spectrum LPWA network technologies such as Sigfox (which is now targeting 66 countries for deployment) and LoRa, they should open up IoT opportunities in a host of new industries and use cases.

The potential advantage of LPWA networks for "mass deployment" IoT in some sectors seems clear-cut, based on the promise of low-cost IoT devices with long battery life that can enable IoT deployments on a much wider scale. But take-up of LPWA technologies operating in unlicensed spectrum has been relatively slow to date. The finalization of three cellular-based LPWA standards – NB-IoT, LTE-M, and EC-GSM – by the 3GPP body in June 2016 has led to an acceleration in the number of pilots and deployment announcements from mobile operators across the world. Standardization should ultimately lead to lower costs for NB-IoT and LTE-M modules and devices. EC-GSM is finding fewest supporters thus far and may ultimately have limited reach.

Likely early use cases for both licensed and unlicensed spectrum LPWA technologies include low-cost, long-life IoT solutions for utilities, m-health, smart homes and buildings, and smart cities.

Mobile operators, unsurprisingly, are touting the security aspects of using licensed spectrum for LPWA. Unlike the unlicensed spectrum LPWA technologies, deploying NB-IoT and LTE-M can (at least in some cases) be quick and straightforward for MNOs that are already operating LTE networks, as they can often deploy cellular LPWA network services through a software upgrade to their existing cellular infrastructure.

NB-IoT is the most likely of the cellular LPWA technologies to dominate in the connectivity race (see Figure 1). European operators, led by Vodafone, have been big supporters of the technology, and Vodafone is planning a commercial NB-IoT launch in four European markets in 1Q17, following successful trials in Spain. Many Asian MNOs are also favoring NB-IoT. Huawei, a strong proponent of the technology, has capitalized on its presence in Asia to pull in operator support for the standard. A number of operators in Asia-Pacific's major M2M markets (e.g. Japan, South Korea, Australia, and China) are already working on the commercialization of NB-IoT and conducting large-scale field trials.

However, LTE-M is finding good traction in the North American market and among some Asian operators. AT&T trialed the technology in San Francisco in November 2016, in partnership with Ericsson, Qualcomm, and Sierra Wireless (among others), working with several end-user organizations to test out metering and retail applications. The operator has announced plans to "commercialize LTE-M technology" in 2017. Verizon has announced similar plans. In Asia, Korea Telecom has a live LTE-M network, while Softbank and Telstra are planning deployments.

KPN is the only European operator so far to opt for LTE-M, having recently completed a trial. It has announced that it plans to have LTE-M operational on its network by the end of 2017, along with its existing LoRa and M2M IoT options.

Ovum still sees opportunities for unlicensed spectrum LPWA, particularly for service providers that do not already operate mobile networks as well as for private networks and in "campus-type" environments. There are also indications that some MNOs are looking to offer both licensed and unlicensed spectrum LPWA IoT services. A number of telcos are trialing or deploying multiple LPWA technologies. Orange, for example, has already set up a LoRa network covering much of France and it trialed EC-GSM in 2016. South Korea's SK Telecom, which has stated its support for LTE-M, has deployed a LoRa network and is investing directly in Sigfox. Some service providers may look to offer unlicensed spectrum LPWA connectivity via MVNOs to not detract value or focus from their cellular-based IoT offerings.

Given the wide range of use cases the IoT will need to address, diversity of solutions and technologies is going to remain a characteristic of this market for the time being. Supporting these solutions and technologies will be a core capability requirement for both service providers and platform developers. Diversified IoT technology plans will become standard practice for leading network operators, and LPWA offerings will be a key element of this. And as they take forward their LPWA plans, market players should also bear in mind the potential for inexpensive, hyper-low-bandwidth LPWA-based IoT solutions to enable (or indeed force) the development of new disruptive business models, for both providers and end-user organizations.

Straight Talk is a weekly briefing from the desk of the Chief Research Officer. To receive this newsletter by email, please contact us.

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