3GPP’s new NB-IOT standard adds much needed choice to M2M landscape

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Last week saw one of the year 2015’s most far-reaching developments in M2M connectivity, as 3GPP’s plenary meeting in Phoenix, Arizona reached a decision on the standardization of a new “NarrowBand IoT” (NB-IOT) technology. It means that there is now a common standard for rolling out and operating cellular-based Low Power Wide Area (LPWA) networks, to be included already in 3GPP Release 13. At the meeting, there were essentially two technological camps with competing alternatives – formed around Huawei and Ericsson, respectively – and it would have not been terribly surprising if things had ultimately hit a deadlock. At this point, our team at Machina Research is still gathering details on who ended up compromising on what, and how much, but the main outcome nonetheless is that things will be moving on.

This matters, for had there been no real agreement between the two camps then that would have put the cellular industry in a tight spot. “Dedicated” LPWA players such as Sigfox, Ingenu (née On-Ramp Wireless), Nwave, and LoRa Alliance have come out in force over the past year, and if the progress on a cellular-based alternative had stalled then MNOs and their suppliers would have had a rather good deal of catch-up to play in 2016. There are still various hurdles between the creation of the NB-IOT as a standard and its commercial adoption, but at least in its current form it counts as a credible near-term option for enterprises that are planning to build their IoT concept on LPWA. If the proposed alternatives had continued to evolve separately, without standardization, then would severely undermined their pioneers’ proposition – especially when it comes to aspects such as coverage availability and hardware costs.

That being said, one key point that tends to be missed in the discourse over LPWA is the fact that the relevant network technologies are by no means a uniform group with similar characteristics and target applications. There are certain overlaps, but in general NB-IOT is unlikely to address the same applications with, say, Sigfox or Nwave. It will be in more direct competition with LoRa operators – or at least the ones that have the luxury of access to some licensed spectrum – but even there some of the groups investing in LoRa may well decide to run it alongside NB-IOT, in order to fill some of the gaps in their connectivity proposition.

For enterprises, this is all good news. Greater choice means that fewer companies developing IoT solutions will be forced adapt their application concept to available network technologies, which will then lead to (a) a greater ROI for solutions that would be developed no matter what, and (b) solutions that simply would not be otherwise viable. The flipside of “choice” – fragmentation – is also an issue, but overall it tends to be exaggerated. The sheer diversity of endpoints that will constitute the Internet of Things simply necessitates rolling out far more, and more kinds of, M2M networks than many observers often realize. Over time, the connectivity layer may well re-consolidate (e.g. under 5G), but that will not become timely at least for the next 7-10 years.


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