Sigfox USA’s filing for Chapter 7 bankruptcy protection, owing almost $150m in unsecured debt, followed rapidly from the earlier receivership of Sigfox SA in France, after a court application for ‘redressement judiciaire’ on January 26 2022. Although the two events were not legally connected, the USA bankruptcy was the direct consequence of Sigfox SA terminating the contracts of 45 US staff.
This brings to a head the unravelling of the French-born Sigfox group after an ambitious attempt to become a major global player in wireless IoT connectivity that saw its eponymous technology ranked consistently among the big four in low power WAN (LPWAN), along with the two cellular options, NB-IoT and LTE-M, plus LoRa.
The company’s operations and technology will now be broken up with the US and French organizations likely to end up in different hands as receivers raise money to offset the debts. In the USA, assets have been valued at $85m, well below what had been hoped earlier, so will pay off little more than half the liabilities.
The actions there will not interfere with the pending sale of French assets, for which at least nine companies have entered the bidding. These include Singapore-based IoT firm UnaBiz as an early frontrunner, as well as several operators that had specialized in running Sigfox LPWAN networks, such as Heliot Europe and iWire.
There had been speculation that Semtech, owner of the rival LoRa, would enter the running almost as a spoiler, but in the event it did not. However, one member of the LoRa camp, French network provider Actility, did join the bidders.
Sigfox, or its remnants, will live on in different hands, but will no longer constitute the single coherent force it was, or promised to be. The other three contenders will be strengthened as a result, especially LoRa as the remaining non-cellular option, which provides an LPWAN platform for service providers without access to cellular spectrum or LTE infrastructure. However, LoRa has been feeling the heat from the cellular variants as some operators seek to align their strategies for IoT with other mobile services under 5G.
It is significant, therefore, that Orange has just reiterated its support for LoRaWAN, the name for networks running LoRa, in France until at least 2027, according to the operator. It says it still regards LoRA as as superior to the two cellular candidates, NB-IoT and LTE-M, for applications involving large numbers of battery-powered IoT devices. Orange’s statement was prompted by the recent move by rival operator Bouygues Telecom to shut down its LoRaWAN network in France after 2024, and Bouygues has stopped selling new LoRaWAN services already, instead offering the cellular variants.
The signals so far are that LoRa may bolstered somewhat by the demise of Sigfox, which could help it maintain its LPWAN market share even while the cellular options forge ahead. There are, though, some complications, resulting in part from geopolitical tensions. The lower performing cellular option, NB-IoT, has been adopted at massive scale in China, with well over 100m connections there now. As Wireless Watch reported in January 2022, NB-IoT is considered in the USA almost to carry a ‘made in China’ label, because Huawei had a big hand in its early development.
As a result, ever since May 2019, when the Commerce Department placed Huawei and many affiliates on a list of firms deemed to threaten national security, some US IoT deployments have switched from NB-IoT to LTE-M as the alternative cellular LPWAN option.
This is possible because LTE-M can accommodate almost all IoT use cases enabled by NB-IoT. LTE-M supports far higher bit-rates, up to 4Mbps downlink and 7Mbps uplink in the latest version, compared with 127Kbps down and 159Kbps up for NB-IoT. The latter has slightly greater penetration and is more power-efficient, but only for those applications generating small amounts of data.
LoRa could also benefit from this trend, given that, like NB-IoT, it was designed for power-efficient, low bit-rate operations at longer range than LTE-M.
As for Sigfox, its demise in the USA and France, in particular, resulted from failure to establish critical mass. In the USA and Europe, the strategy was to start building infrastructure itself and then sell on to a private operator to accumulate scale and gain traction once the seed had germinated. This struggled against financial headwinds in the USA and France, leading to being placed in receivership by the Toulouse commercial court at the end of January 2022, being given six months to put its financial house in order by finding a buyer for the assets and technology.
Yet Sigfox had confounded expectations in its first few years after founding in 2010 to become one of the big four LPWAN wireless technologies, before running into financial difficulties associated with overstretch and over-ambition. Sigfox blamed the worsening financial problems on a slower-than-expected adoption cycle for its technology worsened by the Covid-19 pandemic and associated component shortages.
But the problems were already apparent before the pandemic, brought on partly by the maturation and advance of the two cellular options, combined with the success of LoRa in key sectors. Sigfox had earlier exploited its window of opportunity when LoRa was the principal competitor, but that closed as the cellular industry increasingly got behind LTE-M and NB-IoT.
The networks do, though, have prospects of carrying on intact in markets where branded operations were more firmly established, as in Dubai through iWire, parts of Latin America through WND, Poland with Citymesh, Singapore with UnaBiz, and Iberia with Cellnex. All these entities are independent and in better financial health, which is also the case with Heliot in northern Europe. However, depending on how the various sales pan out elsewhere, some of those original Sigfox houses may migrate to alternative LPWAN variants.