Your browser is not supported. Please update it.

24 July 2015

Verizon’s Q2 shows strength of IoT, certifies LTE Cat 1 Sequans module

Posting total consolidated Q2 revenues of $32.2bn, up 2.4% year on year, Verizon’s portfolio looks pretty healthy – offsetting falling service revenues with an increase in equipment revenues driven by its adoption of installment payment options. While its direct IoT revenues are a fraction of total revenue, at $165m, the company is on track to blow past its $500m forecast for 2015.

In the first two quarters, Verizon has scored $320m in IoT revenue, which include its vehicular telematics products. For the total wireless division itself, which excludes its FiOS and new AOL divisions, total revenue hit $22.6bn for Q2, up 5.3% year on year. Verizon Wireless reports an operating income margin of 34%.

In terms of its network composition, Verizon Wireless had 1.1m net additions in Q2, standing at 109.5m retail connections (up 4.7% year on year), and 103.7m retail postpaid connections (up 5.2% from Q2 2014). Given that 4G LTE devices now account for 87% of total wireless data traffic, Verizon notes that total wireless traffic over LTE has essentially doubled in the past year.

Because of this surging demand, Verizon is pressing ahead with its network densification plans, which will add small cells for additional outdoor coverage, and distributed antenna systems (DAS) nodes for better indoor coverage. Improving the quality of its network will be key for Verizon in addressing the decline in its enterprise revenue, down 6% to $3.22bn, as business customers have much stricter demands in terms of coverage and QoS than a consumer – after all, a consumer can move around a home to find a better signal, while a smart meter can’t.

Key to its IoT ambitions are the modules that will be powering those devices. This week, Verizon has certified Sequans’ new Calliope LTE Cat 1 LTE for use on its network. Launched in partnership with Gemalto, the new module is the first commercially available LTE Cat 1 unit that

“There is tremendous momentum developing around the availability of CAT 1 LTE technology,” said Georges Karam, Sequans CEO. “This is evident from the selection of Calliope by premier module makers such as Gemalto for their CAT 1 module designs. Our CAT 1 Calliope chipset is low cost, low power, and ideal for numerous M2M and IoT devices that don’t require the high throughput of currently available CAT 3 and 4 solutions, yet CAT 1 devices can co-exist with all higher category devices. This was proven in our recent CAT 1 network and device trial with Verizon and Ericsson. Calliope makes it possible to have affordable LTE-connected M2M and IoT devices today, without waiting for future evolutions of the LTE standard and major network upgrades.”

Verizon also certified a surface-mountable LGA (land grid array) module based on the Calliope chipset, called the VZ120Q, which also includes RF support for the LTE bands 4 and 13 – for non-traditional devices that require extra or redundant capacity/coverage.

Away from Sequans and LTE, Verizon has also launched a 4G USB aimed at IoT applications, this time in partnership with Novatel Wireless. Based on Novatel’s U620L mobile WiFi (MiFi) hotspot, the USB dongle aims to offer basic LTE connectivity in a driverless configuration (so that it is more readily plug and play).

The dongle makes use of Verizon’s Remote Device Configuration tool, to issue OTA updates and diagnostics, with Novatel saying that the dongle is ideal for connecting vending machines, POS kiosks and digital signage, as well as industrial automation applications. It isn’t especially cheap, but is currently available for free (after a mail-in rebate) on a $20 monthly two-year contract.

“What we’ve done here is bring the convenience of USB connectivity into the entire IoT world,” said John Carney, EVP, sales and marketing, Novatel Wireless. “By packing in key features of the MiFi technology platform, the robust MiFi U620L is attractive not only for the consumer looking for reliable, fast connectivity, but also for an enterprise in need of a simple, plug-and-play solution that can monitor and collect data from a remote machine or a government agency looking to deploy secure connectivity in the field.”

Mcity connected car testbed:

Verizon is also one of 15 businesses that have begun using the University of Michigan’s Mcity autonomous car testbed – an artificial city driving environment that spans some 32 acres of land. While Verizon’s main interest here is providing the cellular data connection that will power the IVI (in-vehicle infotainment) systems of newer cars and aftermarket head units, it also has a strong interest in the cellular connectivity that will backhaul telematics and locational data to insurers, OEMS and third-party apps.

Aside from the cars themselves, there are also data backhaul opportunities for an MNO like Verizon in linking the vehicular infrastructure that will augment these self-driving cars – especially so in smart cities, where additional devices might use a cellular connection for the high-bandwidth communications (like video) that won’t be able to be carried on the low-power networks such as Sigfox, LoRa or Weightless that we expect to emerge in smart cities.

An alternative path for this traffic is, of course, over cellular’s current nemesis WiFi – which would be installed as part of a city WiFi deployment or as the backbone of a wider sensor network that needs to backhaul its data to a cloud installation. In these architectures, Verizon might struggle to compete with WiFi due to the fact that WiFi is much cheaper once installation is paid for than the ongoing monthly costs associated with cellular

Verizon’s main rival AT&T has also announced in its latest results that nearly half of its 2.1m quarterly subscriber additions were attributed to new connected car packages – which use cellular backhaul to turn cars into WiFi hotspots.