by George Kontopoulos
Technology Strategy, Program Management & Business Development in Telecoms/IT

May 29, 2015

McKinsey Global Institute calls out the Internet of Things (IoT) as a top disruptive technology trend that will have an impact of as much as $6 Trillion on the world economy by 2025 with 50 billion connected devices! Many are predicting 20 or 25 billion connected devices by 2020.

However, which technology can be used to connect 50+ billion devices while fulfilling the ultra-low cost, ultra-low energy and deep coverage requirements necessary for IoT applications?

Key connectivity requirements for IoT solution:

• Optimized for small payloads (with low signalling and control overhead), support for large numbers of terminals per cell (tens of thousands)
• Extended coverage compared with existing cellular (20 dB enhancement over GSM/LTE provides deep indoor penetration)
• Optimized for ultra-low terminal cost (< $5 ASP)
• Optimized for very long terminal battery life (10 years feasible in many scenarios)
• Automatic provisioning of devices

There are two main tracks for providing wide-area network connectivity:

• Evolution of LTE to support IoT applications: longer battery life, longer range, lower cost in exchange for lower throughput.
• Narrow-band (NB) technologies developed especially for IoT connectivity.

Mesh technologies (typically based on Zigbee) and Wi-Fi extensions (e.g. 802.11ah) have been used in private networks and are not easily scalable for wide-area coverage.

Evolution of LTE

While 2G chipsets are found in the $10 range, typical LTE chipsets cost as much as $50, as they require 2 antennas and two receiver chains. 3GPP’s answer to this problem is the introduction of LTE-M and the so-called Category 0 (CAT-0) additions to Release 12 and Release 13.

Release 12 starts to tackle the power consumption issues through the introduction of Power Saving Mode (PSM), and makes a first step to cost reduction by reducing the peak UL and DL rates to 1 Mbps, requiring 1 antenna (and corresponding receiver chain). These features offer device manufacturers a cost reduction of 50% compared to CAT-1 devices.

Release 13 devices will be able to operate with bandwidth as small as 1.4 MHz and peak rates as low as 200kbps. Estimates put the cost reduction of 75% to CAT-1 solution. Release 13 also targets a 20dbm link budget enhancement which will result in coverage improvement.

However, Release 13 devices are not expected on the market before mid to end-2017. This leaves a window of opportunity of minimum 2 years for narrow-band technologies to make an impact.

Narrow-band (NB) technologies

Since today’s cellular networks cannot cover the IoT requirements, there are a few other solutions being developed trying to fill the gap.

Sigfox, a Toulouse based startup, is using ultra narrow-band modulation supporting data rates of 100 bps, using unlicensed frequencies (868 MHz in Europe and 915 MHz in the US). Sigfox has submitted the technology to the European Telecommunications Standards Institute (ETSI) with the aim of turning its proprietary technology into a standard.

Weightless is a standard developed by a consortium of Accenture, ARM, Cable & Wireless, CSR and Neul, designed to operate in the TV White Space bands (Neul has recently been acquired by Huawei).

LoRa, developed by Semtech, is using spread spectrum modulation on sub-GHz bands, offering data rates from 0.3 kbps to 50 kbps. The LoRa Alliance, debuted at Mobile World Congress 2015, aims to drive the LoRa protocol’s global success.

On-Ramp Wireless RPMA (Random Phase Multiple Access) technology operates in unlicensed 2.4GHz spectrum. On-Ramp Wireless was a founding member of the IEEE 802.15.4k Low-Energy Critical Infrastructure Monitoring (LECIM) task group. Through this group, the company attempts to move toward an open standard under its IEEE affiliation.

Huawei/Neul clean-slate technology (FDMA) is using 180 kHz bandwidth (x2) and is attempting to standardize under 3GPP GERAN for licensed spectrum operation. Deployment options include re-farming of GSM sub-carriers, LTE guard bands, and leftover fragments of spectrum during re-farming of 2G/3G to 4G.

Comparison of link budgets by technology [Source: Analysis Mason, 2014]

Spectrum considerations

It is envisioned that spectrum for M2M applications should be in the sub 1 GHz bands since characteristics in these bands are favorable for long range propagation.

The growing market is already leading to the development and roll-out of proprietary low power wide area (LPWA) solutions. Inevitably these operate in various types of unlicensed bands, such as 900 MHz or even TV whitespaces. All such bands allow only limited transmit power and many are regulated by duty cycle restrictions or listen-before-talk provisions. Different interference hardening capabilities are implemented, such as wide-band spread spectrum or narrow bandwidth with frequency hopping capabilities. Yet, even though these bands can be used by a wide variety of products, there is no guarantee of service availability, coverage, or capacity.

Eventually, spectrum availability will slow-down large scale deployments of narrow-band technologies, especially where reliability is a key requirement. Furthermore, use of licensed spectrum is necessary in order to provide global coverage.

There has not been to date any movement for IoT specific spectrum and it would take several years to achieve such outcome. Sub 1 GHz spectrum is expensive and favored for personal mobile applications. TV whitespaces is only regulated in 4 countries (US, UK, Canada, and Singapore).

The spectrum situation reinforces the role of mobile network operators, but MNOs have been lagging in innovative IoT applications for several reasons including high cost structure and incompatibility between their service offering and many emerging IoT applications.

Early deployments and operator strategies

Sigfox is building a network dedicated to IoT covering all of France with 1,000 transmission sites. Due to the huge efficiencies in running its network, Sigfox can maintain a device connection for little more than a dollar a year. Sigfox hopes to partner with operators rather than compete with them, deploying its ultra narrowband networks alongside their cellular networks.

In UK, Sigfox is working with Arqiva to build its network in that country’s 10 largest cities. Sigfox networks are currently also been deployed in the Netherlands, Spain, as well as in several cities in other countries, including Moscow, and Munich. Tele2 has signed a partnership for the Netherlands, allowing Tele2 customers to use the Sigfox network for IoT devices. In Portugal, IoT company Narrownet has announced deploying Sigfox’s network, expected to go live later this year. In Prague, T-Mobile will trial Sigfox’s technology using IoT to monitor railway carriages and alert car drivers to free parking spaces.

In US, a Sigfox network is being built in San Francisco by the company itself, but it hopes to expand to new cities with a carrier partner.

Bouygues Telecom has announced launching its IoT network in France this June, based on LoRa technology. Following successful trials in Grenoble, Bouygues said it was pushing on with a commercial rollout of the LoRa-based IoT network in collaboration with semiconductor supplier Semtech. The network will initially be rolled out in Issy-les-Moulineaux and “a part of Paris”, followed by approximately 500 towns and cities including Marseille, Lyon, Nice, Rennes, Nantes and Montpellier from the end of the year.

KPN is rolling-out a new mobile M2M network in the Netherlands also based on LoRa technology.

Swisscom has established a pilot project in the regions of Zurich and Geneva based on LoRa technology. In Belgium, Proximus is trialing LoRa technology developing an ecosystem with several partners.

Summarizing, many MNOs recognizing the shortcomings of the existing mobile technology have embraced new NB technologies as a path for competitive advantage (KPN, Bouygues, Swisscom, et al). Others see standardized NB technologies in licensed spectrum as the path to follow (e.g. Vodafone). Others, like Tele2 in Sweden, are using LTE for IoT services.

Regarding IoT applications, MNOs remain focused on traditional applications such as fleet management, asset tracking and the utilities sector, propelled by their ability to provide global coverage which is a key advantage. These applications can be exploited with GPRS technology that accounts for the majority of cellular IoT connectivity today. However, scalability and high cost structure will be the major issues for MNOs, and these challenges need to be addressed to improve their competitive positioning against new emerging players.