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Tuesday, December 19, 2017

Public LPWAN connections to grow 200% a year to 2021

By Nick Flaherty www.flaherty.co.uk

Highlighting the growth of the Internet of Things (IoT), public low power wide area networks (LPWAN) connections are anticipated to reach over 1 billion by 2021, according to a new report from IHS Markit.

This represents a 206 percent compound annual growth rate (CAGR) from 2014 to 2021, spurred by the IoT. It also sees LoRaWAN technology dominating the Sigfox network.

The IHS Markit Low Power Wide Area Interim Market Update Report - 2017 tracks key developments in the LPWA market over the past year, including the growth prospects for narrowband IoT (NB-IoT), long range wide area network (LoRaWAN), Long Term Evolution Cat-M1 (LTE-M) and Sigfox.

According to the report, the NB-IoT market received a tremendous boost in June 2017 when the Chinese Ministry of Industry and Information Technology (MIIT) issued an NB-IoT policy framework. 

Key provisions of the framework include:
  • Setting targets for the deployment of NB-IoT–ready base stations: 400,000 sites in 2017 and 1.5 million sites by 2020;
  • Establishing goals for NB-IoT end-device adoption: 20 million connections by year-end 2017 and 600 million connections by year-end 2020;
  • Creating a cellular IoT forum to encourage ecosystem development, and permitting the use of global system for mobile communications (GSM) and frequency-division duplex (FDD) spectrum for NB-IoT services.
“The cellular IoT market was already booming in China, with the three main Chinese operators growing cellular IoT connections from 53.5 million in 2014 to 160.2 million in 2016,” said Sam Lucero, senior principal analyst for IoT at IHS Markit. “With the demonstrated desire by the central government for rapid NB-IoT deployment in the country, along with the key benefits NB-IoT offers for many IoT use cases, it now seems likely that worldwide NB-IoT connections could reach nearly 450 million by 2021, even when conservatively assuming that the Chinese operators do not achieve the aggressive government target for 2020.”

In the market for LPWA in unlicensed spectrum, LoRaWAN achieved higher-than-expected growth during 2017. IHS Markit projects that LoRaWAN “public” connections — those offered as a service by LoRaWAN network operators — will rise to nearly 300 million by 2021.

However the outlook for Sigfox has darkened over the course of 2017 says the report. “As a venture-funded startup, Sigfox has always represented an element of risk for partners and customers seeking to deploy IoT applications,” said Lee Ratliff, senior principal analyst for IoT connectivity at IHS Markit. “Underscoring that risk are the company’s unclear funding situation and attrition among top executives, which hint at turmoil within the otherwise opaque private company.”

“The events of 2017 have widened LoRa’s lead over Sigfox at a time when seizing market share is critical to ensuring survival as NB-IoT begins to be deployed at scale,” said Ratliff. “While LoRa and Sigfox are technically similar, the business models are clearly differentiated and lower risk has become a key advantage in LoRa’s favour.”


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