If you attended the Mobile World Congress in Barcelona this year, you might have thought that the Internet of Things was mainly about bikes and labradors, as they were the mainstay of applications which were depicted on most IoT stands. The reason for that was a marketing push for Narrow Band IoT (NB-IOT) orchestrated by the GSM Association, who had picked up on two applications from early trials and was promoting them at every opportunity.
There’s probably a good market for tracking labradors, as in my experience they’re not the smartest breed in the canine world, but they’re definitely a lot smarter than anyone who believed the IoT message that the network operators were pushing out in Barcelona. According to companies like Vodafone, commercial trials were only four months away, with commercial services next year. But you need more than marketing to make something happen. So here’s my view of the real progress of NB-IOT.
Back in 2010, Ericsson set the bar for much of the subsequent hype around the Internet of Things by making a very pubic prediction that by 2020 there would be 50 billion internet connected devices. Others have been more or less aggressive, suggesting “conservative” numbers of 20 billion, while some have stretched credulity with projections up to 1.5 trillion. The 50 billion isn’t just IoT, it covers everything from phones to smart TVs to tractors, but the biggest single element is what we now call the Internet of Things, with the original 50 billion prediction including around 20 billion cellular IoT connections.
Most analysts have supported the Ericsson line with an estimate somewhere between 30 and 50 billion. But just before Christmas, in their latest Mobility Report, Ericsson quietly changed their minds. They still kept the headline number of around 50 billion connected devices, but dropped the number of cellular connected IoT devices in 2020 from their previous estimate of 20 billion to just over 1 billion.
The important word here is cellular. This week, as the mobile community gathered in Barcelona for their annual jamboree, which is the Mobile World Congress, the industry was still full of expectation that they would own the Internet of Things, and more importantly, the revenue associated with it. Ericsson doesn’t want to spoil that hope with any blatant contradictions, but if you look more closely at the implication of their new numbers, the IoT aspirations of the networks look less than rosy, as their revenue projections begin to disappear into thin air.
There‘s a battle going on for the infrastructure technology that will support the Internet of Things. Currently the three most talked about contenders are Sigfox, LoRa and LTE-M. There are a lot of other alternatives and it’s quite possible that none of LoRa, Sigfox nor LTE-M0 will win, but that’s another story. If you search for LPWAN (Low Power Wireless Area Networks) you’ll see that the battle for supremacy is a hot topic. It’s largely because of the impending loss of the GPRS networks which power much of today’s M2M business. As a result, almost every day you’ll find another article debating their respective technical merits.
I’m going to argue that these comparisons miss the point. Which technology will win depends far more on the business model than on the underlying technology. The three technologies listed above are interesting to compare, as they exemplify three significantly different approaches to an IoT business, which can be broadly summed up as:
Sigfox – become a global Internet of Things operator
LoRa – provide a technology that lets other companies enable a global Internet of Things
LTE-M – evolve an existing technology to make more money for network operators
Between them they promise to help us get to the predicted 50 billion connected devices in 2020. A winning solution could allow the IoT to take off and make its supporters a lot of money. The ones that fail may be limited to niche applications and lose investors hundreds of millions of dollars. Only one is likely to win. It’s also possible that all of the current pretenders could lose. So let’s forget the technology and look at the business models.
All of a sudden, there’s a lot of activity in the Long Range wireless network community. In France, Orange has just announced that they’re going to follow in Bouygues’ footsteps in deploying a LoRa network for M2M which will cover the whole of metropolitan France. That in turn follows on from a similar announcement from KPN that they are planning to do the same thing in Holland, while Proximus are going to cover Belgium and Luxembourg. It’s a bit like a rerun of the SigFox PR offensive, after they managed to sign up operators in France, Holland, Portugal, Belgium, Luxembourg, Denmark, Spain, the U.K. and San Francisco. Nor is it just a European phenomenon. In the U.S., Ingenu, the company which was formerly known as On Ramp, has raised $100 million to roll out its own similar, proprietary network. It seems that there’s a new announcement almost every day. So it’s interesting to look at why mobile operators are desperately announcing new network technologies to support M2M and IoT applications, when just a few months ago they gave the impression that they would rule the IoT with their 4G networks.
When you stop and look behind all of this activity, you see something that should be worrying the M2M and IoT industry (which is not the same as the cellular industry). For the last fifteen years they’ve not had to worry much about how they make their data connections – they just embedded a GPRS module and bought a data contract. But look forward a few years and there’s a worrying hole in the air as networks start to switch off their GPRS networks. That’s just beginning to dawn on network operators, who see an unexpectedly unpleasant vision of the future, in which their anticipated IoT revenues could disappear into thin air.
Don’t worry – it’s not a blog about Tindr or Grindr. The connections we’re talking about here are mobile subscriptions and the men are those at this year’s Mobile World Congress in Barcelona. It is still mostly men. Despite the best efforts of the GSMA with sub-events like the Connected Women’s Summit and France’s promotion of its exhibiting companies as “La France Tech” (which must have had the members of the Académie Française heading to their graves for some early turning), MWC remained defiantly male. In the opening keynotes around 85% of the audience were men. Telecoms, for all of its populist marketing, is still largely a suited profession.
What was exercising the males of the species this year was numbers. Back in 2009, Ericsson predicted that there would be 50 billion mobile connections by 2020. At the time it seemed possible; phone usage was growing and everyone expected that the things around us would follow suit by getting their own mobile connections, leading us to that kind of number. It’s now beginning to strike the CEOs within the industry that five and a half years have passed and we’re half-way there. Yet we’ve still only connected a few tens of millions of machines. That’s why they’re getting so excited about wearables and the Internet of Things as the only way to make those predictions come true.
The mobile industry loves hype. Now that 4G phones have reached the market, suppliers are keen to promote the next dollop of “jam tomorrow” by offering the world 5G – something that’s still rather nebulous, but as always in this industry, allegedly better than what we have today. Most users have still to experience 4G, but that’s par for the course. The industry loves something new, preferably with a bigger number. It begs the question of whether we need it, and even what it is? To try and answer these questions it’s instructive to look back at the history of mobile to see just what the “G”s mean.