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Analyst expects IoT networks to mature this year

Posted: 15 Jan 2016     Print Version  Bookmark and Share

Keywords:Analysys Mason  IoT  LoRa  M2M  NB-IoT 

Market research firm Analysys Mason has forecasted that in 2016, the market for Internet of Things (IoT) and M2M solutions will considerably mature, as some of the key issues facing operators around technology, use cases and opportunities will be resolved.

On the IoT network front, the analysts predict that the contest for worldwide dominance in LPWA networking technology will be confined to NarrowBand IoT (NB-IoT) and LoRa1.

"We expect NB-IoT and LoRa to prevail because: LoRa has significant momentum, boasting networks in five continents. The technology has backing from vendors such as Cisco and IBM and communications service providers (CSPs) such as Du, Swisscom and KPN. The weight of the established telecoms industry (including Ericsson, Huawei, Intel, Nokia, Qualcomm and Vodafone) will be enough to make NB-IoT one of the main contenders," stated the market research company.

It states that other technology options look more likely to be adopted in only a small number of countries. SIGFOX has a strong position in France and has announced a number of network deployments elsewhere, but lacks broad industrial support. Its business model may also be unattractive to many potential partners.

"Other technologies such as RPMA, which is being used by Ingenu, and Weightless SIG have not built significant momentum.

"Niche players, such as Telensa, will continue to win smart city contracts but do not have the scale of backing of LoRa or NB-IoT. Even if our prediction that NB-IoT and LoRa will prevail proves to be incorrect and other technologies succeed instead, we expect to be in a much clearer position by the end of 2016 than at the end of 2015."

Fewer connections than anticipated for IoT

Analysys Mason is forecasting that LPWA will 'only' have around 50 million connections by the end of 2016. Compared with the forecasted billions of IoT connections, this number will disappoint some. However, it shouldn't because most of the initial use cases, especially for smart city projects, are for large contracts that take years to finalise.

But the market research firm expects connection volumes to accelerate towards the end of the decade as greater clarity emerges about the technologies, ecosystems develop and more applications emerge.

Keeping 2G networks for M2M

The company's third prediction about IoT networks is that more communication service providers will publicly outline 3G network decommissioning strategies in 2016, partly because M2M is now a constraining factor on 2G network decommissioning. While some operators (for example, AT&T and Singtel) have announced plans to close their 2G networks, Telenor Group instead plans to maintain 2G and close its 3G network. The need to preserve 2G M2M connections, which account for a majority of M2M connections worldwide, is a significant constraint on fully decommissioning 2G networks. We expect more telecoms operators to follow Telenor's lead by decommissioning 3G networks before 2G.

Dominant IoT use cases

According to Analysys Mason, M2M in 2016 will be dominated by the connected car: the number of connected vehicles will accelerate to over 150 million, with the largest operators reaping the benefits. The connected car opportunity is the most attractive M2M opportunity for telecoms operators because of its massive scale (800 million connected vehicles forecasted by 2023) and the potentially high average revenue per connection (ARPC).

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