Expectations for IoT in 2017: Key developments in LPWA tech, connected cars and smart cities

2016 has been a busy year for telecoms operators in the Internet of Things (IoT) market, most notably in low-power, wide-area (LPWA) technologies as narrowband IoT (NB-IoT) and LTE-M (long-term evolution to 4G, machine to machine) approach full commercial deployment.Here, Analysys Mason’s analysts and consultants outline their expectations for IoT in 2017. The co-authors are David Healey, Michele Mackenzie, Tom Rebbeck and Janette Stewart.

Telecoms operators’ strategies for IoT

Telecoms operators will be under pressure to grow IoT revenues faster, possibly through acquisitions. Currently, revenue from IoT accounts for less than 1% of most operators’ total revenue. It will take until 2025 for IoT to exceed 5% of operators’ total revenue, even starting from 1% and growing by 20% per annum (assuming flat top-line revenues), which is roughly in line with current growth rates for operators’ IoT businesses.

Senior management may view this as too long a timescale and some operators may explore acquisitions or investments as a result. Verizon was one of the few operators to make bold moves in 2016, spending over USD 3 billion on its acquisitions of Fleetmatics, Telogis and some other smaller firms. Other operators may follow Verizon’s lead in 2017.

5G

IoT will become less important to 5G. Almost all presentations on 5G mention IoT, but the reverse is not true – few presentations on IoT mention 5G. IoT firms are already developing solutions and are not waiting for the launch of 5G.

Massive machine-type connectivity (in other words, IoT) has been one of the key use cases proposed for 5G, but we think this aspect will receive less attention in 2017. The focus for 5G may instead be on nearer-term use cases, such as high-speed access in the final mile, as proposed by Verizon.1 5G will need to be significantly cheaper than NB-IoT to transform IoT and this is unlikely in the near term.

NB-IoT, LoRa and other LPWA network technologies

The first truly commercial NB-IoT networks will be launched. There was a flurry of press releases on NB-IoT in Q4 2016, but no truly commercial NB-IoT networks (where customers would be charged for their usage) were launched. We expect to see the first customers paying for access to NB-IoT networks in 2017, possibly even in Q1.

However, we do not expect a significant increase in numbers until the end of the year, as more modules become available and network coverage increases. We may even see the first contracts for more than 1 million NB-IoT devices – this is certainly possible, given the interest from large gas and water utilities.

We expect to see heavy promotion of NB-IoT technology. Few outside the telecoms sector are aware of NB-IoT technology and how it can be used, and even some within the sector remain unaware. We expect to see lots of activity from both vendors (such as Huawei) and operators (such as Deutsche Telekom and Vodafone) to raise awareness of the technology among a broader audience. Developer days, hackathons, competitions and other activities, such as the release of developer starter kits, will all be used to widen access to the technology

More unlicensed LPWA and LTE-M networks will coexist in 2017. No announcements have been made on NB-IoT in the USA. AT&T and Verizon have committed to nationwide LTE-M networks and a number of companies are building LPWA networks in unlicensed bands, most notably Comcast using LoRa.

KPN in the Netherlands is also planning an LTE-M solution to complement its LoRa network. We may see this combination of unlicensed LPWA and LTE-M networks in more countries in 2017.

More fixed operators may build IoT networks. 3GPP technologies (such as NB-IoT and LTE-M) have high barriers to entry, which gives cellular operators an advantage. However, technologies in unlicensed spectrum (such as LoRa) have lower barriers to entry, which opens the market to new competition.

Fixed operators in particular have brands, customer bases and other assets to leverage, which may encourage them to compete in this market. Predominately fixed operators Comcast (USA) and Dr. Peng (China) have both recently announced LoRa networks. Further announcements from fixed players may come in 2017.

Spectrum

Spectrum needs for IoT and Radio LANs (RLANs) will increase in prominence. Spectrum requirements will receive more attention, as the industry and regulators determine how to deliver ultra-reliable, ultra-low-latency RLAN and IoT applications. The spectrum required to support particular applications, will be an important issue, and any additional requirements for both dedicated spectrum (for intelligent transport, for example) and shared spectrum will be a key debate.

Regulation

Regulators will consider increased oversight of IoT. Regulators will almost certainly take a greater interest in IoT, given its increasing importance and recent high profile DDoS attacks. However, the impact of any regulation is likely to be limited in the near term. New regulation will take time (perhaps years) to agree and implement and millions of potentially-vulnerable devices have already been deployed. Players in the IoT industry will strive to agree frameworks and self-regulate in 2017 to stem the need for imposed regulation.

Connected car

We expect to hear much more about V2X and network connectivity for autonomous vehicles. Most autonomous vehicle announcements in 2016 (such as those from Google, Tesla, Uber and car manufacturers) have focused on the vehicle as an independent entity that is driven using a combination of on-board sensors and, in some cases, highly detailed maps.

We expect to hear much more in 2017 about how the overall transport system can be improved by real-time information from vehicle to vehicle (V2V), vehicle to infrastructure (V2I) and other types of vehicle communication (V2X). Much of this remains uncertain – the benefits, business case, and technology are works in progress. However, we will see developments in 2017 as operators and network vendors attempt to answer these questions, as Vodafone3 and others have already begun doing.

Smart energy

More utilities will embrace ‘energy transition’ fundamentals and adopt new operational and service models, supported by new technology. Advances in technology have fundamentally changed the economics of providing energy and are disrupting the historical model for distribution through development of the distribution service operator or ‘on-demand utility’ model. We expect more utilities to embrace this new model in 2017.

Smart cities

There will be an increased focus on investment models to support the implementation of city-wide energy efficiency systems. Cities represent 78% of global energy demand at present, placing the smart-city concept at the heart of the climate change agenda.

The UN projects that an investment of USD 53 trillion in city infrastructure and operations is necessary by 2035 to achieve the COP 21 objective of holding global average temperature increases below 2°C above pre-industrial levels. New investment models will be critical in transitioning from trials to full-scale smart city operations and we expect this area to attract much attention in 2017.

The co-authors of this blog are David Healey, Michele Mackenzie, Tom Rebbeck and Janette Stewart of Analysys Mason

Comment on this article below or via Twitter: @IoTNow_ OR @jcIoTnow

RECENT ARTICLES

Get a US$50 Amazon voucher for sharing your IoT brand knowledge

Posted on: March 28, 2024

We want to know what you know about the IoT space. Just 3 minutes could earn you a US$50 Amazon digital gift card!

Read more

Enhance EV charging performance with cellular connectivity

Posted on: March 28, 2024

Electric vehicles (EVs) are steadily growing their market share at the expense of internal combustion engine vehicles. The growth is fuelled by several factors. Perhaps most importantly, prices for EVs have started to drop as competition in the industry is intensifying. New players and models are emerging, prompting several established EV makers to lower their

Read more
FEATURED IoT STORIES

What is IoT? A Beginner’s Guide

Posted on: April 5, 2023

What is IoT? IoT, or the Internet of Things, refers to the connection of everyday objects, or “things,” to the internet, allowing them to collect, transmit, and share data. This interconnected network of devices transforms previously “dumb” objects, such as toasters or security cameras, into smart devices that can interact with each other and their

Read more

The IoT Adoption Boom – Everything You Need to Know

Posted on: September 28, 2022

In an age when we seem to go through technology boom after technology boom, it’s hard to imagine one sticking out. However, IoT adoption, or the Internet of Things adoption, is leading the charge to dominate the next decade’s discussion around business IT. Below, we’ll discuss the current boom, what’s driving it, where it’s going,

Read more

9 IoT applications that will change everything

Posted on: September 1, 2021

Whether you are a future-minded CEO, tech-driven CEO or IT leader, you’ve come across the term IoT before. It’s often used alongside superlatives regarding how it will revolutionize the way you work, play, and live. But is it just another buzzword, or is it the as-promised technological holy grail? The truth is that Internet of

Read more

Which IoT Platform 2021? IoT Now Enterprise Buyers’ Guide

Posted on: August 30, 2021

There are several different parts in a complete IoT solution, all of which must work together to get the result needed, write IoT Now Enterprise Buyers’ Guide – Which IoT Platform 2021? authors Robin Duke-Woolley, the CEO and Bill Ingle, a senior analyst, at Beecham Research. Figure 1 shows these parts and, although not all

Read more

CAT-M1 vs NB-IoT – examining the real differences

Posted on: June 21, 2021

As industry players look to provide the next generation of IoT connectivity, two different standards have emerged under release 13 of 3GPP – CAT-M1 and NB-IoT.

Read more

IoT and home automation: What does the future hold?

Posted on: June 10, 2020

Once a dream, home automation using iot is slowly but steadily becoming a part of daily lives around the world. In fact, it is believed that the global market for smart home automation will reach $40 billion by 2020.

Read more

5 challenges still facing the Internet of Things

Posted on: June 3, 2020

The Internet of Things (IoT) has quickly become a huge part of how people live, communicate and do business. All around the world, web-enabled devices are turning our world into a more switched-on place to live.

Read more