NB-IOT

The Internet of Things – IoT – has moved from fiction to reality. By 2020, there will be over 14 billion network-enabled devices, according to the International Energy Agency. This compares to approximately 3.2 billion people using the internet. IoT dramatically widens the internet’s scope from people-operated computers towards autonomous smart devices. Often, these devices are connected to the internet for remote diagnostics & control, leading to cost savings. In addition, innovative IoT hardware & services can generate new revenues – for example, connected glasses used for industrial applications, more efficient logistics serving new market segments, or industrial appliances sold in a per-usage business model. In many cases, business users & private users can control their IoT application through existing smartphones and tablets, through mobile applications that interact with web servers which the connected objects connect to. Many mobile operators have set up dedicated IoT/M2M business units in order to serve the growing number of companies looking to embrace the business benefits that mobile IoT brings. Larger operators have even made acquisitions so that they can serve a wider part of the value chain and capture revenues beyond pure connectivity. As the market grows, it is becoming obvious that there are many mobile IoT use cases for which existing cellular networks are not suitable. The reasons are simple: Coverage, battery life and device cost. First, coverage: Existing cellular networks already offer very good area coverage in mature markets. However, many potential “connected objects” are located in vast remote areas, far away from the next cellular base station. If there is coverage, it is often weak which requires the device transmitter to operate at high power, draining the battery. In addition, cellular networks are not optimized for applications that occasionally transmit small amounts of data. A battery life of several years combined with an inexpensive device cannot be realized on existing cellular standards, as they do not support the required power saving mechanisms. 3 Huawei’s business case analytics is designed to evaluate the NB-IoT business for specific industries, countries or regions. Based on our deep country-specific research which includes social and demographic data evaluation, we have modeled how the adoption rates for different NB-IoT applications will develop during the next five years. Our forecasts are based on use cases; distinct NB-IoT applications that will often be deployed in more than one industry. The model currently includes over fifty use cases, covering many service categories such as: • Smart metering (electricity, gas and water) • Facility management services • Intruder alarms & fire alarms for homes & commercial properties • Connected personal appliances measuring health parameters • Tracking of persons, animals or objects • Smart city infrastructure such as street lamps or dustbins • Connected industrial appliances such as welding machines or air compressors. The third aspect is device cost: Mobile devices working on GSM, 3G and LTE are designed for a variety of services, including mobile voice, messaging and high-speed data transmission. However, NB-IoT applications do not utilize any of this; they just require low-speed but reliable data transfer, and an appropriate level of reliability. Therefore, using cellular devices for NBIoT applications means using devices that are too expensive for the application. Many of the NB-IoT use cases require a low device price, not just in order to have a positive business case for the service operation, but also due to practical aspects such as ease of installation or risk of theft. In summary, there are strong market trends pointing at growing demand for NB-IoT applications, while the networks that can efficiently serve such applications are not in place yet. This whitepaper examines trends in the market for NB-IoT applications and discusses technology options that operators can choose from in order to enter this new business.