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NB-IoT is Dead. Long Live NB-IoT.

December 12th, 2016 |  Published in Wireless Connectivity  |  14 Comments

As the old adage goes, “while the cat’s away, the mice will play”.  In the case of NB-IOT, “when the spec’s delayed, LPWAN will play”, which is exactly what’s happening in the Internet of Things market today.  The problem is that 3GPP (the 3rd Generation Partnership Project), the standards body which has been responsible for the 3G, 4G and 5G mobile standards, dropped the ball as far as the Internet of Things is concerned.  Seduced by the slabs of black glass which suck up both our attention and the mobile networks’ spectrum, the 3GPP engineers totally forgot to design something to replace the old 2G workhorse of GPRS, which is responsible for most of today’s machine to machine communications.  Instead, they spent all of their time designing high power, high speed, expensive variants of 4G to support an ongoing dynasty of iPhones, Galaxys and Pixels, none of which were any use for the Internet of Things.

Noticing this hole, a number of companies who had been developing proprietary, low cost, low speed, low power communication options saw an opportunity and created the Low Power WAN market.  Whilst many perceived them as a group of Emperors with no clothes, the network operators were so desperate to have something to offer for upcoming IoT applications that they started engaging with them, rolling out LPWAN infrastructure.  Whether they believed the LPWAN story, or just hoped it would fill a hole is difficult to ascertain, but no-one can deny that LPWAN is now firmly on the map, in the form of Sigfox, LoRa, Ingenu and a raft of others.  To address that challenge to their hegemony, the GSM Association (GSMA) directed the 3GPP to assemble their own suit of imperial clothing which would be called the Narrow Band Internet of Things, or NB-IoT.

This is the story of why NB-IOT was too late, why it will fail in the short term, why it will win in the long term, and why the industry will struggle to make any money from it.

NB-IoT

One of the most surprising aspects of this story is how long it took 3GPP and the network operators to realise that they had a problem.  It’s not as if they didn’t see the problem coming.  Back in 2010, Ericsson set the bar for much of the subsequent hype around the Internet of Things by making a very public prediction that by 2020 there would be 50 billion internet connected devices.  They’ve subsequently downgraded that, but very few in the industry noticed – for them, it’s very difficult to discard the prospect of “tens of billions” once it’s made its way into their business plans.  Numbers that big get attention in boardrooms, whether or not they mean anything – they just sound so good that they are assumed to be true.

What happened is that the industry became fixated with the concept of revenue today, rather than revenue tomorrow.  As users embraced smartphones, their demand for data soared.  When competing smartphone vendors made smartphone screens larger, mobile video took off, putting further pressure on the network’s capacity.  Everyone’s attention became focused on how to build enough capacity into their network to retain their users.  Instead of calling for new standards for M2M and IoT, operators started concentrating on how they could use their existing spectrum more efficiently.  There was an easy answer to this – turn off their old 2G networks and use them for 4G, which supported around 40 times as many users.  It was only as they started to do this that they belatedly realised that they were euthanising the only technology they had which would support the Internet of Things.  At which point the LPWAN industry stepped into the frame and started cutting deals.  The GSMA panicked, and directed 3GPP to embark on the path to NB-IoT.

At this stage it’s worth pointing two things out.  The first is the normal timeline for developing a new radio standard, and the second is the requirements for the majority of the projected 50 billion IoT devices.

Developing a wireless standard is a slow business.  Back in 2010 I tried to estimate the time and cost involved and came to the conclusion that it costs around a billion dollars and takes 8 – 10 years before the standard is robust and getting traction in the market.  That was for personal area networks like Bluetooth, Wi-Fi and ZigBee.  Cellular networks are more complex, so cost more and take longer.  Despite the evidence, the GSMA announced that their new NB-IoT standard would be complete and released in six months.  Six months later, they announced that it was going well and that they would release it in six months’ time.  And six months after that they put out a press release saying that the specification was complete.  We’ll come back to that in a minute.

The second thing we need to look at is what a standard for wireless IoT connectivity needs to do?  Most IoT devices will be quite taciturn.  They will measure data and events and send that data a few times each day.  They’re not going to be streaming video or having lengthy conversations because they’re battery powered.  If they’re going to run for several years on a small battery or some energy harvesting power supply, all they can manage is a few messages each day.  Sigfox understand this and make it evident in their data plans.  They’re not talking about hundreds of Megabytes like the cellular industry, but as little as 14 messages of 12 bytes each day.  That’s about the same as a single SMS message.  To put it another way, most IoT applications make text messaging look bloated.

It’s not at all clear that the GSMA understand this.  In a recent Mobile Broadband Forum meeting, the GSMA and other operators kept on implying that IoT devices need data rates of tens or hundreds of kilobits per second.  That is definitely what network operators want to sell, but it’s not what IoT devices need.  If we’re going to get to billions of device, connectivity and silicon needs to be cheap.  Cheaper and simpler than GPRS was.  The cellular industry has never taken on board that fact that the reason we don’t already have billions of IoT devices is that even GPRS is too expensive.  Trying to make NB-IoT more complex than GPRS is not going to kickstart the IoT era.  What we need is a standard which will let companies make a chip that costs around a dollar in high volume.

That’s not where the cellular chip industry has been going.  In the early days of 2G, networks operated at two different frequencies, with relatively simple radio modulation. That meant that chips were moderately simple.  Over time, the GPRS modules which are used in most current IoT devices have fallen in price to around $7.  However, as the desire for more bandwidth has grown, 3G and 4G chips have become much more complex.  Moore’s law has helped to prevent them becoming exorbitant, but each new release of the standards has to support a growing number of frequency bands (we’re up from 2 to over 70), as well as all of the different protocols in the previous standards which have gone before it.  Developing these is prohibitively expensive.  As a result, 3G modules cost around $20 and 4G modules $35. The growing complexity, which requires immensely complex protocol stacks to complement the chips, has benefitted a very few silicon suppliers, who have largely destroyed the competition.  Qualcomm dominates, with Mediatek taking most of the rest of the market.  The business model for both is to sell billions of chips to a small number of high volume manufacturers who have deep technical competence to integrate these into their products.  That is very different to the model needed to support tens of thousands of IoT manufacturers who need $1 comms chips which they can just drop into their products.

nbiot-cost

You can see this contradiction in the NB-IoT standard which has recently been released.  There were two industry groupings with radically different approaches.  The traditional one, led by Nokia and Ericsson, proposed what is essentially a cut down, lower power variant of 4G.  The key feature of this is that it is capable of working with other 4G devices in the same spectrum, so it can easily be slotted into existing networks.  However, to do that it needed to retain a fair degree of radio complexity to be aware of other 4G traffic.  That has two consequences.  It meant the chip was much more complex because it had to be able to identify what was going on around it, hence it’s still expensive.  It also made it more difficult to make it very low power.

The alternative approach, led by Huawei and Vodafone was for a “clean sheet“ approach.  This was a solution which did not have the intelligence to coexist with 4G networks, but required operators to set aside a small amount of spectrum for it, (which could be a guard band), specifically reserved for IoT traffic.  As the chips didn’t need to be aware of any other 4G traffic, they could be much simpler and hence much cheaper.  It’s a cleaner approach, but one which goes against the traditional network approach of making complex hardware which can work on any band around the world.  Network operators typically prefer the complex hardware approach, as it passes the problem of global interoperability onto the chip and protocol stack companies.  Whatever the operators do with their networks, regardless of the frequency bands they own, things just work.  But it raises the cost of hardware.

This “clean sheet” approach grew out of the Weightless standard.  Neul – a Cambridge start-up helped developed Weightless as a new radio and protocol for use in TV Whitespace.  That failed to get traction, but the company was acquired by Huawei and the technology repurposed to work in the licensed spectrum that’s used for LTE.  Because it does not have the baggage of backward compatibility, there’s a fair chance that the silicon could get down to the $1 mark.

These two approaches are essentially incompatible, and it was interesting to speculate how 3GPP would resolve the difference between them.  Hence I was intrigued to see the resulting specification when it was published.  When you start to read it, you can see how they managed to get it out so quickly.  Instead of trying to find a compromise, it includes both the Huawei / Vodafone and Ericsson / Nokia / Intel options, so it is entirely up the chip vendor and network operator to decide which they support.  That means that a user or manufacturer has absolutely no idea of whether an NB-IoT product they make will work on any particular NB-IoT network.   It’s as if the acronym should really be Nobody Believes the Internet of Things.

It’s a fudge, where the specification group has produced some pieces of paper to meet a deadline and then passed everything over to a PR department which is taking the post-truth approach to promoting the technology.  It would be nice to think that the specification group had realised that this first release was just a PR exercise and were working on harmonising the two conflicting proposals, but it seems they’re ignoring that and looking at adding location features instead, presumably because LoRa is offering that, and they don’t want to be left behind again.  In other words, bells and whistles are more important to them than making NB-IoT work.

Making it work appears to be left to market forces.  Vodafone is trumpeting the first commercial NB-IoT network.  At the same time, Sonera, in Finland is announcing the first commerical NB-IoT trial.  Although that may seem confusing, there is no contradiction here.  Both are telling the truth, as Vodafone is using Huawei’s NB-IoT, which is totally different for the Nokia NB-IoT which Sonera is using.  Nobody knows which variant will win.  The key player in this could end up being Huawei.  They have a captive silicon supplier in Hisilicon, which should help them get to the $1 chip price point.  If they could persuade the Chinese Government to deploy hundreds of millions of devices in the country, this could make it the de facto standard.  Nokia, Ericsson and Intel are unlikely to concede without a struggle, but with a higher cost and the lack of scale that a Government backed deployment in China could provide, they may struggle to gain momentum.

Unfortunately, this type of commercial battle generally doesn’t help the market.  Without global compatibility, manufacturers will be loath to adopt the technology, as they have no idea whether it will work in any target market.  That reduces volumes, which keeps chip costs high.  It also delays all of the important things like developing test equipment and compliance programs which are vital to develop a robust network, which further undermines confidence.  To survive, NB-IoT needs to be a single low cost, globally interoperable standard.  In its current form, NB-IoT is dead.

While it goes through its death throes, the LPWAN suppliers will make mischief.

Sigfox is being aggressive in pricing, both for modules and data contracts.  They recently announced that modules will be available for just $3 in 2017 and already have data plans with charges as low as $1.50 per year.  They also desperately need to get the number of connections up, so will probably offer even lower costs in the near future.  The company has raised over $300 million in funding and is aiming for an IPO in 2018.  However, they feel that they need to get above 100 million active devices to persuade the market to support a decent valuation.  So their investors will be putting pressure on them to get more connections made as soon as possible, potentially commoditising the IoT connectivity market in an attempt to buy market share from their rivals.

LoRa is a more distributed community, with multiple vendors providing parts of the ecosystem.  However, LoRa has a significant difference from other LPWAN offerings, which could be important.  It is the fact that anyone can buy a gateway and set up their own network.  A crowdfunded initiative – the Things Network, has designed modules and gateways and persuaded the electronics distributor Farnell / Element14 to sell them in the same way they sell Raspberry Pis.  For those who don’t know it, the Raspberry Pi is a highly effective embedded computing board.  Originally designed to help teach coding in schools, it has been adopted by the maker community as the basis for thousands of projects and products.  Farnell have recently announced that they have shipped their ten millionth Raspberry Pi.

The Things Network / Farnell initiative is relevant, as they will be selling LoRa gateways for €250.  In other words, for €250, anyone can become an Internet of Things network operator covering a radius of around 5km.  The Things Network – a development community attempting to build a global LoRa network, is providing compatibility layers behind that which will stitch many of these gateways together.  Costs will probably be slightly higher than Sigfox, but this will appeal to an open source community, with the innovation benefits that brings to an emerging technology.

There are issues about scaling.  Tech hotspots like Cambridge, Amsterdam and Berlin could each have over a thousand LoRa gateways by Christmas 2017, which could make or break the technology.  It will be an interesting experiment.  It may also give Ingenu an opportunity, as they’ve been in the game longer and appear to have a more robust technology in terms of scalability.  But they’ve not achieved the same traction in the minds of IoT developers yet.

This brings us to the important part, which is what this means for network operators?  Other than Vodafone, who have firmly nailed their colours onto the NB-IoT mast, most operators are hedging their bets by flirting with at least one proprietary LPWAN option.  However, in order to get critical mass, contract prices are racing to the bottom.  SK telecom is down to $0.30 per month and Sigfox’s pricing will probably push that down to below $2 a year in the near future.  That’s a long way away from the $50- $200 that operators get from their current M2M contracts.

At $2 a year, 20 billion devices will contribute around 4% of current global mobile subscription revenues.  That is probably less than network operators currently make from their GPRS subscriptions, yet it will replace much of that revenue.  In other words, by supporting 20 billion IoT devices, the network operators will probably be making less money.   Let me emphasise that point.  The IoT opportunity of tens of billions of connected devices could reduce mobile operator revenue, not increase it.

Many mobile operators seem to think that they will make money from other parts of the IoT value chain, like cloud services or data analytics, but there is little indication that they’re well positioned for that.  Amazon, Google and a host of others are already there.  In the next few years, the volume in deployments will probably be using the LPWAN standards of Sigfox and LoRa.  The developers who choose them will naturally turn to Amazon and Google, giving them the opportunity to further refine their IoT offerings.  I’ll cover this in more detail in a future article.

Despite the present debacle over NB-IoT, the developers at 3GPP are bright – they will eventually get a specification out which meets the industry’s requirements, whether that’s driven by market forces winning out or technical decisions.  However, my guess is that it may not be before 2023, as that’s how long wireless standards take.  Which gives the different LPWAN standards plenty of time to play, and time for the cloud and analytics providers to shake out, settle down and start some serious customer acquisition.

The great thing about 3GPP standards is that they’re dead easy to roll out.  In most cases they’re simply a software upgrade for the base stations.  So it won’t take long to go from a final standard to global availability.  At which point most IoT manufacturers will probably migrate to it, signalling the end of the short-lived LPWAN era.  Of course, most of the LPWAN players and their investors are looking for shorter term returns, so they may already have disappeared.  Even five years is a long time in a venture funded world.

What will be missing in the future NB-IoT world will be the hoped-for revenue.  The years of LPWAN competition will have driven any profits out of NB-IoT, leaving the operators as pipes.  It will also have established other players higher up in the value chain who can cream off what profit there is to be made.  A future variant of NB-IoT will come to life and dominate as the connectivity standard for IoT, not least because as volumes grow, the licensed spectrum that operators own will offer a Quality of Service that is missing from the LPWAN offerings.  It will also provide the certainty that manufacturers are desperate for, which is that the network will be a stable solution which is available for fifteen to twenty years.  NB-IoT will wipe out any remaining alternatives, but it will not be the IoT pot of gold that many in the industry believe.

There is a final sting in the tail of this story, which is that for years we have been striving to develop low power, wide area connectivity which will enable a sensor battery life of ten years or more.  The irony is that we now have a set of different LPWAN options which look as if they do support a ten year battery life, but it’s unlikely that any of them will still be operating in ten years’ time.  In other words, battery life now exceeds network life.

One wonders how we got to this point?  There is little good news for an equipment manufacturer, who is faced with the prospect that whatever connectivity solution they choose today, it will probably disappear within the next ten years.  In other words, their product obsolescence is in the hands of their choice of network operator.  But that’s the problem when you forget your King is dying and everyone spends their time running around backing pretenders to the throne.  Be careful what you wish for.  NB-IoT is dead.  Long live NB-IoT.

14 comments ↓

#1 Joe joe on 12.13.16 at 4:35 pm

Overall a well written article though one may not agree to all the arguments.

The article has couple of mistakes like Sigfox support 140 msg (not 14) of 12 bytes. Sigfox module is available under 2$.

The author seems confused over NBIoT and eMTC which are both part of 3GPP yet quite different. Above all whosoever believe that NBIoT is a simple software upgrade lives in ‘HEAVEN’. In the first place you need add new network entities like SCEF and C-SGN, then need hardware upgrade eNB, then you need to upgrade a lot of softwares of eNB as well as network elements such as OSS, HSS…The overall cost is HUGE, multiple times rolling out unlicensed band LPWA networks.

The author argue that NBIoT will only prevail in the end owing to QoS. Do you ever listen that telco have given qos commitment for M2M or any cellular services? They always take no risk and charge huge amounts with BE service standards. Finally the cost of NBIoT services per annum will never be comparable to unlicensed LPWA due to huge CAPEX and above all huge OPEX of teleco organizations. The best ending would have been that as the market is BIllions of devices, unlicensed and licensed will coexist with each having certain advantages and sweet spot of offerings.

#2 Nick on 12.13.16 at 5:21 pm

Thanks for the comments. The message numbers I quoted for Sigfox were for their most frugal plan. I’m not sure whether that’s available in all countries. I believe that 140 messages per day is the maximum plan. I’ve not seen a $2 module yet – the one they recently announced (http://www.thinxtra.com/2016/11/sigfox-ultra-low-cost-modules/) is USD 3, but I’m sure that will price will go down with volume.

I don’t believe I am confusing NB-IOT with eMTC, although given the proliferation of acronyms coming out of 3GPP it’s possible I’m behind the curve. When I went through the documents cited in the NB-IoT press release I found they contained conflicting proposals from the two camps, with no indication that they were being harmonised. That’s also been confirmed in a couple of recent presentations from the GSMA. So if I’m confused, I’m not alone.

I do agree about the huge cost of rolling any of this out. However, it’s a small part of the ongoing costs of future LTE releases. If the networks push back against 5G, which I suspect they will do, then the infrastructure suppliers will probably bite the bullet and include these in future upgrades as they realise that they need to find more ways of differentiating their 4G offerings.

One thing I didn’t talk about is how well the LPWAN options will scale? Ingenu, in their former existence as On-Ramp, learnt that scaling LPWAN is far from trivial and spent a lot of time and money in upgrading their network and protocols. I don’t think Sigfox and LoRa have reached that pain point yet, but you have to wonder whether we can support 50 million IoT devices in half a MHz of unlicensed spectrum?

I didn’t intend that QoS would be a major reason for a return to cellular suppliers, but I do suspect that we will find unlicensed spectrum deficient. Whether operators can charge more for QoS is the big question. Once IoT companies have got used to the $1 per year contracts from LPWAN they’re unlikely to want to pay the network operators more. So the other question is what happens if we hit unlicensed spectrum crunch? If that means a price rise, then the IoT will stop in its tracks. If it doesn’t, the operators will have a very lean time. What’s worrying is that neither are good outcomes, particularly for anyone investing in the IoT.

#3 Joe joe on 12.13.16 at 5:49 pm

The info about Sigfox messages offerings is public in many blogs but there is no option of 14 msg per day but highest one is 140msg/day and minimum with 2 msg/day which is valid to all of their networks. Sigfox Wisol module for EU and ME is available in 1.89$ at low volumes, I have confirmed from some guys who are now actually developing devices on it. In fact Wisol confirms commercial availability of modules for EU and ME. For US and ANZ module price is below 3$, samples are available now.

For telco, if you go simply on Press Releases mostly they are misleading and inaccurate. I have seen such press releases, in fact drafted them myself as this is what telco do. You need to verify info from sources to see what’s behind the scenes. There are no variants of NBIoT in 3GPP, unless you mix up eMTC, ECGSM and NBIoT which are all very different.

For Massive IoT rollout, cost is one of the main factor. I bet on unlicensed because operators have to pay for spectrum license (may it be 200khz), IPR cost as part of chipsets, CAPEX and OPEX as mentioned earlier . I believe that IoT market is too huge for one single technology to digest alone, so many will sustain and will find their sweet spots like NBIoT or other cellular technologies for slightly high data rate with better command and control mechanism where customers are willing to pay more while LoRa for private networks and Sigfox for very bottom part of the pivot with limited downlink and uplink and cheapest cost.

And only the time will tell what happens, till then I keep my fingers crossed!

PS: I put LoRa for private only because already many interference and capacity issues are reported globally and they are killing bandwidth. Sigfox capacity with 200khz is quite good, at least never heard or capacity or interference issue.

#4 Nick on 12.13.16 at 6:40 pm

Thanks for the update on pricing.

With regards to the NB-IoT press release, I also don’t believe PR. So I dug down into the change request it referenced, which is available at http://www.3gpp.org/images/PDF/R13_IOT_rev3.pdf. If you then start reading through the documents that are being submitted to release 13, you find the inconsistencies.

The problem with multiple different standards is which one does a manufacturer choose if they’re shipping a global product? One support call wipes out the profits from adding wireless from tens of devices. Which is why many manufacturers may just wait.

#5 Patrick Burns on 12.16.16 at 5:50 pm

Nick – illuminating piece and surprised more hasn’t been written on this given what is at stake for the cellular industry.

“The great thing about 3GPP standards is that they’re dead easy to roll out. In most cases they’re simply a software upgrade for the base stations. So it won’t take long to go from a final standard to global availability. At which point most IoT manufacturers will probably migrate to it, signalling the end of the short-lived LPWAN era.”

I work mostly with industrial IoT customers and hear something quite different from them: there is little appetite for relying on a carrier for IoT infrastructure. There are exceptions, but so far I don’t see NB-IoT dominating in closed-loop networks, but maybe you have a different perspective.

#6 Nick on 12.16.16 at 7:38 pm

You’re right in pointing out that there is effectively a “dark WAN” out there already, in the form of proprietary wireless networks, which already carry a lot of the current IoT traffic. They may well offer better QoS than cellular networks. It’s interesting that some of the bigger ones, such as Telensa, have not taken the route of jumping onto the “come and connect with me” bandwagon, but are quietly getting on with expanding their existing business model of enabling vertical sectors. I.e. they’re following a more traditional business model, rather than rushing for an IPO or exit.

#7 Patrick Burns on 12.17.16 at 5:12 am

“At which point most IoT manufacturers will probably migrate to it, signalling the end of the short-lived LPWAN era.”

If most IoT networks are and will be closed loop and most IoT endpoints will exist in closed loop networks and NB-IoT won’t be used in closed loop networks, what exactly is the market opportunity for NB-IoT that would cause IoT manufacturers to migrate to it? The feedback from industrial users is that the cellular opportunity there will be mostly limited to backhaul. TCO, rumors about not-so-great NB-IoT battery life, network security/management concerns — not exactly conditions for industrial sector endpoint domination by cellular. Any cellular carriers or analysts with bullish forecasts for industrial NB-IoT endpoint deployments should be heavily scrutinized.

NB-IoT’s better prospects may lie in consumer markets, where ease of use, more tolerance for shorter battery life, and an existing installed base give it some short-term advantages, but as anyone with home automation scars will testify, this is a mosh pit. Unlicensed band LPWAN network operators who can solve for ease of use will compete here, too. And combined with your statement “The IoT opportunity of tens of billions of connected devices could reduce mobile operator revenue, not increase it.” makes the cellular foray into the IoT way more problematic than I think most analysts are prepared to admit today.

It’s not yet clear which unlicensed LPWAN radio will win the LPWAN war, but I strongly disagree with the argument that LPWAN’s are a short lived, mischief-making fad. To the contrary, I don’t see any reason why LPWAN technologies like LoRa or TI’s CC13XX series cannot encroach on traditional low power LAN incumbents, offering better signal propagation and more modern networking stacks. A well-managed execution effort by a LPWAN company/standards body in the unlicensed band has more long-term potential for manufacturers to migrate to it than does a comparable effort from the cellular side.

#8 Gong Jian (Ken) on 12.20.16 at 7:45 am

Hi, Nick,

Could you please explain what makes you believe there are differences between NB-IoT of Huawei/Vodafone and NB-IoT of Ericsson/Nokia? What my colleagues told me is that they are exactly same thing and Ericsson/Nokia’s NB-IoT also support guard-band deployment. I’ll be very grateful if you can share some evidences showing the conflicts of the two NB-IoT alternatives.

Thanks & BR.
Ken

#9 Nick on 12.20.16 at 12:31 pm

The mains difference I understand between them is the philosophy about how they coexist with existing networks. From what I can see, the Huawei / Vodafone approach comes from a clean sheet approach, where a cellular operator would reserve spectrum for the IoT. The Ericsson / Nokia approach allows it to coexist within an LTE band, where it could share spectrum with other LTE traffic.

That sounds a simple difference, but it has big ramifications. If NB-IoT is going to exist with other LTE traffic, the radios need to be able to monitor and interpret what else is happening and schedule accordingly. That means more complex radios and processing. The effect of that is to increase cost and reduce battery life. For an operator this may seem good, as they can be more dynamic in terms of allocating their spectrum usage, which is a good selling point for cellular operators. However, the increased complexity encourages chip vendors to add other features, typically combining NB-IoT with Cat M, further pushing up the cost.

If they decide not to coexist with LTE, the implementation can be much simpler, but operators will need to allocate spectrum solely for IoT, which is something they don’t like doing, particularly before the market has taken off. From an industry point of view, the NB-IOT spectrum should be common to every operator around the world. If it’s not, then you need to go back to more complex radios, which can cope with every network they encounter, which drives the cost up again.

In the short term, we will see both. That means that a manufacturer choosing NB-IOT can’t be sure it will work on any network, which is not good for growing volume. In time, the cellular industry will make a choice which should provide global access, but we will probably need a second or third release of NB-IOT to reach that point. Right now, most NB-IOT development is being done for the benefit of cellular infrastructure and silicon suppliers, not for the industries which will end up using it.

#10 Nick on 12.20.16 at 12:52 pm

I didn’t mean to imply they’re a fad. I do think they’re making mischief, but they have every right to, as 3GPP has failed to deliver. The interesting question is how short- or long-lived they will be?

There’s are a number of parts to that question. The first is whether any burn and die? There is a lot of investment in some of them, and if they don’t deliver, then investors may walk away, leaving the network at risk of collapse. Another option could be to find a niche and concentrate on that, rather than trying to be a global IoT network. Telensa is a perfect example of how to play that game. Another is to merge into a future NB-IOT specification.

My comment that when NB-IOT becomes stable, manufacturers will migrate to it is pragmatic. The thing that manufacturers want for IoT is a standard that is global, robust and which will be there through a product line’s life, which means ten to fifteen years. That is what cellular networks do and have a history of doing. And it’s what LPWAN networks don’t have a history of. Yet. Remember this is about billions of devices, not what we hear promoted today, which is mostly makers trying to build at scale.

I don’t believe that manufacturers will migrate because of cost, dissatisfaction with LPWAN, throughput or any other technical reason. They will migrate because in their eyes, mobile operators are global utilities and global companies trust global utilities for infrastructure. It’s the old question of “would you base your business on a fifteen person startup that’s only been in existence for eighteen months”? That is the biggest threat to LPWAN. They have five years to prove they can become utilities, which is going to be a very hard task. If they don’t manage that, or find a profitable niche, then they may find they’re no longer relevant.

#11 Nick on 12.20.16 at 12:55 pm

It may not. That’s why there are still so many successful private wireless networks. However, I expect to see some get pushed out at the next round of spectrum auctions, as more and more is gobbled up by the cellular operators.

The thing with the industrial space is it’s all based on sensible investment and return decisions, which I consider M2M rather than IoT. The latter needs scale to get out shareable data, which is a different game.

#12 Michael Elling on 02.06.17 at 11:45 pm

Nick,

The allegory of the cave comes to mind. What if in all this 2-D debate we’re incapable of seeing a third dimension; namely that the business model of the MNOs and not the tech per se, or the process of dualing standards, is flawed?

In a period of rapid obsolescence there has to be a better model for supply/demand clearing for more rapid returns. Sharing of customers, revenues, devices and infrastructure comes to mind; yet this only happens with settlements. With a greater or lesser orientation towards net neutrality and bill and keep we have been moving away from settlements over the last 2 decades.

Settlements between actors (north-south and east-west in the informational stack) are price signals that provide incentives and disincentives. As this is anathema to the 4 layer IP folks, maybe we should begin a discussion about this and let the carriers have the networks and eat them too. Just as long as they get out of their doghouse siloes.

Michael, NYC

#13 Jay Lee on 02.14.17 at 4:32 am

Hi Nick,

I truly enjoyed reading your article and found it very interesting. My question is along the same line as Ken’s (Gong Jian) in that there is no difference in the actual frozen Release 13 from Huawei’s CIoT and Nokia’s LTE-NB (code named LTE-extDRX in Release 13).

Huawei had pushed its CIoT (which is what you referred to as the “clean slate approach” based on its acquisition of Neul) until the freeze date in June 2016 of Release 13. However, after June 2016, Huawei no longer mentions CIoT, does this mean the actual Release 13 does not contain Huawei’s approach? Can you kindly list the actual content of Release 13 where you had identified the existence of Huawei’s non-bachward-compatible “clean slate” approach in it? More specifically, the approved RAN specs RP-160456, RP-160443 and RP-1604760in Release 13 are all LTE-extDRX, and aren’t all these Nokia’s propsals and none from Huawei?

Thanks a lot and I very much look forward to your insights.

Regards,

Jay

#14 Nick on 02.16.17 at 4:44 pm

Jay,

Thanks a lot for your comments and questions. Unfortunately I didn’t keep a note of the individual documents in the released set. When I looked at them I had hoped to see a clear decision to use the clean slate approach, as that provides the most obvious route down to a $1 chip. Instead, the bulk of the documents suggested that the committee had gone for the more backwards compatible approach, which gives the “advantage” of coexisting with other LTE activity. That is obviously a preference from cellular operators, as they can dynamically adjust spectrum to cope with the level of usage. However, it means a considerably more complex chip, raising the cost. It also inevitably plays to a desire to support more bands, so any global solution ends up with a more expensive antenna and front end. Which is not going to help NB-IoT in its battle with the LPWANs.

However, I found bits of the Huawei proposals still included, which suggested to me that this release remains something of a “pick the bits you like” standard, where different players can select whatever they feel is the most attractive combination of features for their ongoing trials. That may a good way to get early trials running, not least because whatever option a company may have picked can be continued, but I don’t think it’s a good way to write a specification, as ultimately it comes down to letting the market decide, largely based on who gets to critical mass first. We may then find that the resulting solution doesn’t provide the correct cost point to support a credible business model.

If that’s the case, the LPWAN players will continue to gain ground, until the point where the GSMA has another moment of realising that they’ve dropped the ball, and we see a repeat of the knee-jerk panic to get a competing specification out. Currently the process does not feel that it’s being led by people who are really serious about getting the best possible specification out, rather than getting something out as quickly as possible. For implementers, that just feeds uncertainty and pushes them further into the arms of the LPWAN fold.

The other part that worries me is that the radio is probably the easier bit. What will stall the IoT far more comprehensively is the lack of a credible provisioning method. Putting SIM cards into billions of devices is not practical. Yet every time I talk to operators about their IoT plans, they always revolve around SIM cards. If the NB-IOT group were looking at solving provisioning in Releases 14 and 15 I’d have some confidence that they knew what they’re doing. Instead, their desire to add location seems to suggest that they’re locked into an orgy of technical masturbation, rather than understanding what the market needs. Just because LoRa is trying to do it, doesn’t mean it’s a good idea. So my hope of seeing a $1 NB-IoT solution still seems a long way away. But I expect to see an LPWAN one within the next 18 months. Which should be just in time to get a whole new raft of “enhanced NB-IOT” PR announcements for MWC 2019 as everyone starts again.

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About Creative Connectivity

Creative Connectivity is Nick Hunn's blog on aspects and applications of wireless connectivity. Having worked with wireless for over twenty years I've seen the best and worst of it and despair at how little of its potential is exploited.

I hope that's about to change, as the demands of healthcare, energy and transport apply pressure to use wireless more intelligently for consumer health devices, smart metering and telematics. These are my views on the subject - please let me know yours.

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