The history of cellular low power WAN (LPWAN) technologies has been one of confusion and firefighting. The kind of connectivity required by machine-to-machine applications – low power, often low bit-rate – was mainly confined to GSM, and specifications in the 4G standards were left fallow and unimplemented.
Then the signs of an emerging Internet of Things refocused attention on the need for a more advanced cellular M2M network – to provide greater functionality than GSM; to allow operators, eventually, to sunset 2G networks; and to fend off the new challenge from LPWANs in unlicensed spectrum, such as LoRa and Sigfox, which could be used to challenge the MNOs in a market that suddenly looked attractive again.
This led to the existing 4G-based M2M spec, LTE Cat-1, being dusted off and two new standards being agreed – LTE Cat-M and NB-IoT. The former has higher speeds and power levels than the latter, which is targeted squarely at applications like asset tracking and monitoring, the heartland of Sigfox.
The emergence of three 4G M2M options in short order has proved confusing for operators. Some have prioritized just one, according to their most important use cases; others aim to support both the new ones but have largely skipped over Cat-1; still more, especially in emerging markets, are making do with Cat-1 for now and seeing how the market pans out in terms of Cat-M, NB-IoT and future 5G-IoT standards.
And some operators which have kept their options open now feel it is time to rationalize their networks. This seems to be the case in Japan, where NTT Docomo has become the first major operator actually to turn off a commercial 4G LPWAN. The company will switch off its NB-IoT network after a year of commercial operation. It will keep its Cat-1 and LTE-M services running but said in a statement that, “in light of the current business environment, we have decided to stop providing this communication system in order to concentrate management resources”.
This presumably points to NB-IoT being the least commercially successful of the three. Although all are supported on existing LTE infrastructure through software upgrades to the main base stations, they have their own particular management techniques, applications and device ecosystems, so there clearly has to be a decent revenue stream to justify maintaining that for all three.
Matt Hatton, partner at Transforma Insights, told FierceWireless that NB-IoT has proved to be more expensive and complex to run than advertised, and “the super-cheap data plans that seem to be dominating everyone’s thinking in IoT, of a dollar or two a year, just don’t generate enough money to justify the trouble and expense of NB-IoT upgrades, at least not at today’s volumes.”
In Japan as elsewhere, cellular IoT use cases and revenues have been far slower to grow than expected a few years ago, making it even harder to justify a multi-technology approach. The use of LTE-M for some of the country’s roll-outs of smart meters – a core use case for NB-IoT – suggests that the differentiation offered by the lower-power standard is not great enough when LTE-M is in the picture too.
Cat-1 has proved useful for migrating M2M business from 2G and 3G networks. These were switched off at an early stage in the 4G era, as is the way in Japan, by contrast with Europe, where many MNOs plan to keep a small piece of their GSM networks active indefinitely to avoid the headache of migrating users on M2M contracts to new platforms.
Meanwhile, LTE-M is growing quite strongly in Japan, where it is offered by Docomo, KDDI and Softbank. Each has announced significant contracts based on this network. For instance, KDDI supports the national gas smart meter program on LTE-M.
In the short term, then, NB-IoT seems to be redundant where operators have built out LTE-M, although there are growing numbers of MNOs which are deploying both. These include China Telecom, and the three biggest operators in the USA, a market where the initial focus was on LTE-M, while in Europe there was more attention to NB-IoT.
In Japan itself, Softbank not only has LTE-M and NB-IoT running in parallel, but also has a LoRaWAN network, and says each system supports different use cases.
While the complexity of operating multiple M2M networks should not be underestimated, NTT Docomo is incurring one important risk by moving to LTE-M alone. That standard is a ‘dead end’ which will not have a 5G successor, while NB-IoT, as the true narrowband technology with the ultra-low power consumption, will be the basis of 5G-IoT in Releases 16 and 17. Even a lightly-used NB-IoT network could help an operator migrate to 5G-IoT more easily, and with greater experience of how the platform works.
Docomo may return to NB-IoT at a later stage, when (and if) it sees massive-scale IoT use cases becoming a reality. Or it may decide to be an early adopter of 5G-IoT, as soon as that is commercially ready, which would fit with its normal pattern of being a first mover in new radio technologies.
That may be a long way off. The actual standards will be ready next year, but with LTE-M and NB-IoT networks being so new, it is unlikely there will be significant MNO appetite to migrate to 5G-IoT for some years, unless they see new use cases emerging that really require the 5G capabilities.