The past two decades have witnessed the rapid development of both fixed and mobile broadband Internet. To this date, new innovative technologies of Internet of Things (IoT) are growing increasingly mature, complete with a defined set of well-formulated industry standards. A robust IoT ecosystem has since been established, and the social and economic benefits triggered by IoT are being widely recognized by a vast number of governments, industries, and individuals. It is remarkable to acknowledge and realize that the golden era of IoT has finally arrived.
IoT, big data, and artificial intelligence (AI) are recently popular buzzwords, and IoT is a solid foundation for a fully connected world, and is also a preliminary and prerequisite initial step to help implement big data and AI. As predicted by Gartner, the number of global IoT connections is expected to exceed 8 billion by the end of 2017 (higher than the world's current total population).
Various industries all have increasing requirements for informatization and intelligence, which struggle to be met by traditional short-range connection technologies (such as Wi-Fi), Fortunate for these industries, the introduction of Low Power Wide Area (LPWA) technologies emerge as a new and attractive alternative. LPWA also functions as a key for telecom operators to enter different markets from a diverse range of vertical industries. With such extensive experience in network operation and a deep understanding of the consumer market, operators can help to promote the industries' expedited transformation towards informatization and further intelligence. In 2016, the number of deployed LPWA networks reached 85, which is an increase of over three times that compared to the previous year (29 networks).
As one of the LPWA technologies, Narrow-Band IoT (NB-IoT) has secured a mainstream position as a viable choice for telecom operators to deploy mobile IoT. In 2017, an excess of 30 NB-IoT networks have been deployed in over 30 countries, serving 50% of the global population. Several industry scenarios have been tested or put into commercial use, with the help of joint efforts of operators and their partners. In 2017, the shipments of NB-IoT chipsets are estimated to rise above 10 million, and the number of NB-IoT connections is anticipated to surpass 3 million. With the promotion of large-scale commercial use, the cost of NB-IoT modules and chips has dramatically declined. The subsidies from telecom operators also contribute to the price decrease, which effectively reduces the cost of NB-IoT modules to the same level as 2G/3G modules. The lower price will play an instrumental role in helping to boost and accelerate widespread market expansion.
Figure: An excess of 30 NB-IoT networks in over 30 countries serving 50% of world's population by the end of 2017
Three telecom operator giants in China have defined clear IoT strategies and collaborated with governments on smart city projects, the number of IoT connections will be doubled in 2017. For example, China Telecom has deployed a nationwide NB-IoT network to help utilities(water, electricity, and gas) to reduce labor costs, improve work efficiency, and implement refined management. NB-IoT is also performing a significant function in terms of smart street lamps, smart parking, bicycle sharing, smart home appliance, and other such projects as well.
Vodafone, Deutsche Telekom, Telefonica, and Orange are the pioneers in the European market. These operators all regard IoT as a very powerful and useful tool to achieve enterprise market expansion. For example, Vodafone has deployed NB-IoT networks in 12 countries in 2017 and conducted commercial verification more than 40 use cases, such as smart meter reading, smart parking, and bicycle sharing. Deutsche Telekom has released commercial NB-IoT tariff plan, and to offer national wide NB-IoT services in Netherlands and other counties. In addition, operators (AT&T, Verizon) deployed national wide LTE-M network in US and further intends to gradually establish a comprehensive well-formed ecosystem. An increase in the standard of living gives rise to a soaring number of owned vehicles. By leveraging existing mobile broadband 3G and 4G networks, operators can not only offer drivers multimedia entertainment services, but also help drivers to establish Energy-saving and safe driving habits to reduced costs, and help to improve the efficiency of overall fleet management. Driving activities can then be recorded by on-board unit (OBU) and applied to measure the discount ratio of insurance fees paid by individual or fleet, and also help to reduce unnecessary compensation costs.
In recent years, home broadband has been deployed in an increasing number of family households to pursue a more digital lifestyle. As a high-value operator service, the penetration of Smart Home is increasing in well-off families. It is estimated that more than 60 million shipments of smart home gateways were successfully delivered in 2017 by telecom operators. By implementing a strategic principle of "Hardware Ready", an excess of 54 million gateways purchased by China telecom operators through central procurement in 2017.
Huawei predicts that there will be 100 billion IoT connections worldwide by 2025. According to GSMA forecasts, the connection of cellular IoT (CIoT) will increase by approximately seven times in the next upcoming five years. In 2020, there will be 3 billion CIoT connections on telecom operators' networks (with 2.1 billion connections intended for LPWA applications). These connections will be applied to industrial manufacturing, individual applications, smart home, public utilities, and other associated aspects. It is only a short matter of time before massive connections will yield positive results and operators can start to enjoy tremendous commercial value in terms of connectivity, services, and data analytics.
China is currently the largest IoT market in the world, with the number of CIoT connections being approximately 100 million. By 2020, this number is expected to skyrocket to up to 350 million, and additional 730 million connections by LPWA technology, which combines to a total number of connections exceeding 1 billion. It is anticipated that 50% of the 28 billion connected devices worldwide in 2025 will use LPWA technologies. In other words, IoT is set to boast a vast and thriving future market.
There are a considerable number of IoT players in the various, divergent, and scattered industries who advocate the use of diverse IoT technologies. In order to secure a solid position within the industry, an IoT player must consolidate their own strengths and cooperate with other upstream and downstream players along the industry chain to meet many different requirements of contrasting industries. In October 2015, the GSMA NB-IoT Forum was founded with the admirable goal of forming a complete industry chain that pertains to upstream and downstream NB-IoT enterprises. This forum has attracted 64 members and more than 500 partners from over 20 industries. In China, the NB-IoT Alliance is a cooperative arena which hosts an excess of 1500 members. The IoT industry chain is gradually taking shape with the careful selection of partners from an increasing number of companies and organizations. These combined efforts will help create a mature, comprehensive, and well-established IoT ecosystem that is destined to have a positive and profound influence on the IoT industry.