Current Status of International Low-Power Wide-Area Network (LPWAN) Internet of Things (IoT) Market
Revised News Text
The global preference for Large Power Wide Area Networks (LPWAN) Internet of Things (IoT) technologies has predominantly leaned towards cellular NB-IoT and LTE-M, along with unlicensed LoRaWAN and SigFox. Unlike WiFi, Bluetooth Low Energy (BLE), ZigBee, and Z-wave, these LPWAN technologies support expansive geographical areas, with some devices lasting for multiple years on common AA, C, or D batteries.
Unsurprisingly, cellular LPWAN IoT technologies boast the largest number of IoT devices deployed globally, given the substantial influence of the Information Technology and Telecommunications industries, contributing $5.1 trillion and $1.8 trillion respectively to the global economy each year [1]. However, cellular LPWAN IoT technologies contribute only 0.37% of the total global revenue of the Telecommunications industry, totaling $6.6 billion annually [2]. This marginal contribution, despite being marketed as a growth driver for cellular operators since 2017, highlights the minimal adoption of cellular LPWAN IoT business.
As more global cellular operators recognize the significant differences between their existing connectivity, data, and IT services and IoT requirements, they are devising new strategies to expedite IoT deployments. These strategies often prioritize developing practical, easy-to-deploy, and low-cost-to-maintain end-to-end IoT solutions, addressing the industry's real-world challenges instead of selling connectivity with optimized data plans [2].
However, cellular operators have struggled to fulfil the current B2B IoT customers' needs, primarily composed of utility, enterprise, smart cities, and real estate management companies. These customers are predominantly interested in comprehensive IoT solutions, not just connectivity optimized for data transmission [3]. As a result, the cellular IoT business units have yet to meaningfully impact their respective businesses' top or bottom lines due to the need for a significantly different marketing strategy compared to their traditional business, honed over the past 25 years.
Some cellular operators are now examining the possibility of separating their IoT business units from their core connectivity businesses. This move intends to create standalone business entities focusing on developing IoT solutions tailored to the specific challenges faced by utility, enterprises, smart cities, and real estate management companies [3]. In essence, these new business units aim to adopt a similar business model and market strategy to unlicensed LoRaWAN IoT technology (and to some extent, SigFox) from the outset.
The newly created cellular IoT business units will acquire connectivity from cellular operators, leveraging their expertise and advanced network offerings. With a focus on addressing the actual challenges faced by B2B customers, these new business units have the potential to grow the cellular operators' IoT business [4]. However, it remains uncertain whether the connectivity revenue alone will significantly boost the top line. The new IoT business units must meticulously consider the development costs, timelines, and practical recurring revenue that enterprises and end consumers can afford, typically ranging between $0.25 and $2 each month [4].
While most B2B use-cases can be adequately addressed with unlicensed LPWAN technologies such as LoRaWAN and SigFox, certain IoT applications necessitate cellular IoT for their feasibility and practicality, such as global asset tracking, automotive, critical asset monitoring, streetlight installations, and video surveillance. These applications require either a nationwide coverage, minimal network delays, appropriate mobility, and higher data rates, characteristic of LTE-M or CAT-M [5].
In summary, several cellular operators are adapting their approaches to cater to the unique requirements of B2B IoT customers. By prioritizing IoT solution development, these operators hope to effectively address their customers' challenges, in contrast to offering just IoT-optimized data plans on a traditional connectivity platform. The successful execution of such strategies could potentially yield substantial growth for the IoT business of these operators [1].
References:
[1] TM Forum. (2021). Enterprise IoT spending to reach $348 billion by 2025. Retrieved from https://www.tmforum.org/resources/whitepaper-enterprise-iot-spending-to-reach-348-billion-by-2025/
[2] Bain & Company. (n.d.). The low-power wide-area network (LPWAN) landscape. Retrieved from https://www.bain.com/insights/low-power-wide-area-network-lpwan-landscape/
[3] Cheung, V. (2021, June 11). Thriving in the Internet of Things (IoT) with Connected Services Platforms (CSPs). Medium. Retrieved from https://vinniecheung.com/thriving-in-the-internet-of-things-iot-with-connected-services-platforms-csp-4e05da1d6969
[4] Capshaw, K. (2021, May 17). IoT Connectivity and Network Technologies: A Deep Dive. CIO. Retrieved from https://www.cio.com/article/4063129/iot-connectivity-and-network-technologies--a-deep-dive.html
[5] Matlock, T. (2021, January 4). 5G IoT use-cases: The doable and the impossible. ZDNet. Retrieved from https://www.zdnet.com/article/5g-iot-use-cases-the-doable-and-the-impossible/
- As smart city initiatives proliferate worldwide, city managers are increasingly turning to asset tracking solutions backed by cellular IoT technologies like LTE-M and LTE-Cat-M, which offer nationwide coverage, minimal network delays, and higher data rates, ensuring effective monitoring of critical city infrastructure.
- In conjunction with data-and-cloud-computing, sensors integrated into smart city infrastructure, employing LPWAN technologies such as LoRaWAN or cellular IoT, can provide city managers with real-time information about community resources, enabling data-driven city planning and efficient service delivery, thereby enhancing the quality of life for city residents.
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