Cellular carriers will see internet of things (IoT) service revenue grow by 21 percent CAGR through 2022, with low pricing offsetting the rise in volume for mobile operators, according to a new Mobile Experts report, which looks at the C-IoT market as it shifts from GSM/GPRS to two new standards that have emerged under Release 13 of 3GPP – CAT-M1 and Narrowband-IoT.
The five-year forecast predicts NB-IoT will take over 57 percent of cellular IoT shipments by 2022, followed by LTE-M (CAT-M) with 25 percent of the market.
“The Cellular IoT market is starting its dramatic transition from machine to machine (M2M) to IoT,” said Chief Analyst Joe Madden. “In other words, instead of the legacy formats that simply re-use technology intended for phones, new formats and new products are now optimized for longer battery life, lower cost, and long-term operation.”
The transition will require about three years to make an impact on revenue for suppliers, according to the report. The move from GPRS or LTE Cat-4 to Cat-M or NB-IoT will lower the price of devices, modules and chips.
“So, we are currently waiting for the volume of new applications enabled by long battery life, to see an impact in product revenue in this market, Madden said. “Over the next few years, low-cost IoT devices will grow rapidly enough to drive an entirely new ecosystem of suppliers and devices.”
AT&T Dominates U.S. Cellular IoT Market–Berg Insight
At the end of first half of 2017, ten global mobile operator groups had a combined market share of 76 percent of the cellular IoT market, according to IoT analyst firm Berg Insight, which consisted of an active base of 407 million cellular IoT connections.
China Mobile was the highest ranked carrier with 150 million IoT connections, and the highest U.S. carrier was AT&T in fourth place with 36 million IoT connections, followed by Softbank/Sprint and Verizon at 15–20 million cellular IoT subscribers.
Berg Insight expects that AT&T, Verizon and Vodafone will generate more than $1 billion in revenues from IoT in 2018.
“The main strategy for growing IoT revenues is vertical plays in major application areas,” said Ryberg. “Verizon, Vodafone and others have made significant acquisitions in the connected vehicle space to extend their product portfolios.”
AT&T has operated a CAT-M network in the United States since spring of 2017. In Atlanta, AT&T has deployed two hundred IoT sensors to LED streetlights to address issues such as traffic flow, parking optimization and gunshot detection, and create a platform for citizen engagement. In Dallas, the city installed 22 IoT-enabled smart lighting solutions using connected LED and intelligent controls that cut energy use by 35 percent in the first 90 days.
T-Mobile Goes with NB-IoT
T-Mobile launched the nation’s first U.S. narrowband IoT (NB-IoT) network last October and last week announced its pricing at $6 per device per year for up to 12 megabytes of data. The carrier also announced it has certified NB-IoT modules from u-blox and Sierra Wireless for use on its network for applications that require low bandwidth, long battery life and large numbers of sensors, such as asset tracking, smart city applications and smart agriculture. T-Mobile plans to support the full ecosystem of LTE technologies for IoT to meet the differing needs of customers.
FirstNet Will Also Connection IoT Communications
In the future, FirstNet will go beyond first responder communications to connect them to the Internet of Things and the smart cities infrastructure, according to a letter written by Mike Poth, FirstNet CEO.
“We recently launched the first-ever applications ecosystem designed specifically for public safety, built on open and common standards,” Poth wrote. “We have also built a dedicated innovation and testing lab just for them, where devices, applications, and advanced network features are being tested to ensure they will deliver when public safety needs them to.”
J. Sharpe Smith is the Senior Editor of eDigest. Smith joined AGL in 2007 as contributing editor to the magazine and as editor of eDigest email newsletter. He has 27 years of experience writing about industrial communications, paging, cellular, small cells, DAS and towers. Previously, he worked for the Enterprise Wireless Alliance as editor of the Enterprise Wireless Magazine. Before that, he edited the Wireless Journal for CTIA and he began his wireless journalism career with Phillips Publishing, now Access Intelligence. Sharpe Smith may be contacted at: firstname.lastname@example.org.