How Cellular IoT is Taking Over the World

April 4, 2019 Dunstan Power, ByteSnap Design

Cellular IoT connects physical devices (such as sensors) to the internet using essentially the same technology as your smartphone. Instead of needing to create a new, private network to operate your IoT devices, they can piggyback on existing mobile networks.

Most low-power devices have historically used GPRS (General Packet Radio System), which has excellent hand-off abilities - important for mobile devices and vehicle-based implementations - as well as low data costs and low power consumption. However, as GPRS networks face being deprecated in many countries, it is essential for designers and engineers to make forward-looking decisions when designing IoT devices, and in the context of Cellular IoT this means embracing the new LTE standards proactively, as opposed to reactively.  

With GPRS being turned off, the next generation of cellular IoT applications, will typically migrate to one of two technologies: LTE-M (Long Term Evolution for Machines and aka Cat-M1 or Cat-M) or NB-IoT (Narrowband IoT, aka LTE CatNB1 or LTE-M2). Only the U.S., Netherlands, Ireland, and Australia have national LTE coverage, while GSM is standard in regions like Eastern Europe and Africa.

In the past, it was often considered too expensive to connect high-bandwidth devices over cellular networks, while low-bandwidth devices used GPRS almost exclusively. But with standards-based Low-Power Wide-Area (LPWA technology), cellular networks can easily and cost-effectively be used for both high and low-bandwidth devices, considerably simplifying deployments. Carriers are making rapid progress in deploying LPWA networks, with many now using both LTE-M and NB-IoT versions of LPWA.

The IoT sector keeps growing – some facts and figures

By the end of 2020, it’s predicted that there will be more than 30 billion connected devices, with the overall global industrial IoT market predicted to reach $933.62 billion by 2025, up from $109 billion in 2016.

Within these figures, the cellular IoT market is expected to grow from $1.26 billion in 2015 to $5.31 billion by 2022, at a CAGR of 23.34 percent during the forecast period between 2016 - 2022.

Global mobile carrier Ericsson predicts that the number of cellular IoT connections through NB-IoT and LTE-M technologies alone, will reach 4.1 billion in 2024. Most deployments, connections, and growth will come in North East Asia, where the total will reach 2.7 billion by 2024. 

Key advantages of cellular IoT

The advantages of cellular IoT are numerous, including ubiquitous coverage, easy deployment, lower support, hardware and data costs. 

Cellular devices can be pre-provisioned by distributors or system integrators before shipment to the end-customer, enabling connection to the network right out of the box, where no end user provisioning is required (e.g. setting up security to connect to a Wi-Fi access point).

With cellular, the infrastructure is owned and managed by the cellular carriers, not the end-customer or product supplier. This means no upfront infrastructure costs and reduced support costs. Because cellular connectivity does not depend on end-user managed infrastructure (Wi-Fi, Zigbee, etc.), product suppliers do not have to provide ‘helpdesk’ support services for basic connectivity issues, and reliability is much improved by the robustness of the cellular network.  

In addition, cellular module costs have fallen significantly in recent years, while data costs have also fallen significantly. For connected machines that only need to report small amounts of data, connectivity costs can be less than £1 month. For example, a vending machine that reports daily inventory clearly doesn’t need the same costly data plan as a consumer streaming HD music videos.

From farms to cities: examples of how cellular IoT delivers

LTE-based cellular IoT offers extensive opportunities for the future, with projects in areas including smart agriculture, smart cities and public safety.

In 2016, Telia developed a smart agriculture pilot in Norway with equipment maker 7Sense, using connected sensors to enable farmers to monitor compost and irrigation systems. 7Sense is looking for NB-IoT to provide better coverage and battery life than is possible with other forms of connectivity, underpinned by the ease of use and the quality of service provided by the cellular network.

Smart cities will potentially combine IoT with almost every aspect of life, and they are very much in the pipeline. Investments in 2017 by Bill Gates near Phoenix, Arizona, NEOM in the Middle East and development plans for Hangzhou in China, show a wide range of global interest. The City of Los Angeles has completed an automated traffic surveillance and control system, aiming to anticipate and reduce traffic congestion and pollution. London is also trialing pollution-combating measures that involve a network of connected IoT sensors, alongside car-mounted sensors that collectively provide early warning of localized high-pollution risks.

IoT-connected asset trackers are being used to monitor school buses in real time to ensure they are on schedule and to keep students safe. The system will be designed to monitor children in a safe and non-intrusive way, using a combination of RFID, GPS (Global Positioning System), and GPRS technologies. Each student is issued one or more unique RFID card(s) which will be embedded in the school bag. As the student’s tag is detected by the reader installed in the school bus upon entering or leaving the bus, the time, date and location is logged and transmitted to a secure database.

Mobile operators rally to support cellular IoT

Mobile operators across the globe are rallying to support cellular IoT, although adoption varies widely, both in terms of standards, and timescales. The rollout is partly to support smart metering, smart logistics and smart environmental monitoring, but also as a core component of operators’ long-term strategy and commitment to 5G IoT standards.

In the U.S., AT&T launched its first commercial LTE Cat-M1 site in the U.S. in 2016, and rolled out LTE Cat-M1 services nationwide in the second quarter of 2017 and is testing the use of LTE-M for a variety of industrial IoT use cases, partnering with CalAmp on connected vehicles and fleet and asset management, RM2 on smart pallets, Xirgo Technologies on container monitoring and asset tracking, and PepsiCo on smart beverage fountains.

In Europe, Orange launched an LTE-M Network in France in 2018 and confirmed further LTE-M Network in Spain and Romania by the end of 2018; while Deutsche Telekom is preparing the roll out of its 5G-ready LTE-M technology in 2019 with the accelerated development of LTE-M solutions.

In terms of NB-IoT rollout, Deutsche Telekom and Vodafone Group completed international roaming trials in Europe using NB-IoT in June 2018.

Meanwhile, Telia was the first operator in Finland to bring NB-IoT to its network in March 2018; Telenor introduced LTE-M alongside NB-IoT to Norwegian networks in November 2018 and Deutsche Telekom has pledged to bring LTE-M into Europe in mid-2019.

Standards still fragmented

Mobile IoT networks are standardized by 3GPP and are intended to support cellular IoT applications that are low cost, use low data rates, require long battery lives and often operate in remote and hard-to-reach locations such as industrial asset tracking, safety monitoring or water and gas metering. As of December 2018, 44 mobile operators have launched 83 commercial Mobile IoT networks worldwide across both NB-IoT and LTE-M technologies. According to GSMA Intelligence forecasts, by 2025 there will be 3.1 billion cellular IoT connections, including 1.8 billion licensed LPWA connections.

U.S. wireless giant Verizon partnered, with industry leaders including Sequans, Telit, U-Blox, Sierra Wireless, Gemalto, Qualcomm Technologies, and Altair to create Cat-M1, an LTE network/chipset that is designed for IoT applications, specifically by being particularly frugal with power. According to Verizon, Cat-M1 consumes less power, comes with an improved battery, and supports everything from water monitoring systems to asset trackers and consumer electronics. However, Verizon launched Cat-M1 in 2017, and IoT platforms are only just beginning to offer Cat-M1 as a cellular offering.

Cat-M1 is often viewed as the second generation of LTE chips built for IoT applications and has a real key benefit in that it is compatible with the existing LTE network. For carriers such as Verizon and AT&T, this is great news as they don’t have to spend money to build new antennas, although meshing Cat-M into LTE networks requires a software patch. However, it is a fair bet that 5G and LTE technologies will coexist well into the 2020s, so the backward-compatibility of Cat-M is a bonus.

NB-IoT has a goal similar to that of Cat-M1; however, it uses DSSS modulation instead of LTE radios. Therefore, NB-IoT doesn’t operate in the LTE band, which means that providers have a higher upfront cost to deploy NB-IoT.

Both CAT-M1 and NB-IoT are being pursued aggressively to become the de-facto connectivity solution for IoT products. The main disadvantage of NB-IoT is that it was originally designed for static applications like metering, so it does not handle mobility very well, and can also suffer from latency issues. On the positive side, NB-IoT modems have lower power requirements and are likely to arrive at a lower per unit cost than Cat-M1. 

Altair Semiconductor analyzed three key KPIs including coverage, cost and power consumption. While the market perception is that NB-IoT has a clear advantage over CAT-M1 for these KPIs, the company concluded that CAT-M1 actually offers advantages for coverage and power, and only a minimal cost disadvantage when compared to NB-IoT.

Dual or tri band as an interim solution

Over the next few years, thousands of businesses will design new products to take advantage of the opportunities opened up by cellular IoT. Turning to RF experts can help overcome this challenge, especially when navigating the dual-mode chipsets that are appearing that allow device manufacturers to build a single product for global deployment.

Vendors such as Telit, uBlox, Sierra Wireless, Gemalto and Quectel, are just a handful of modem providers that are rolling out solutions to capitalize on the cellular IoT market. 

The catalyst: Is 5G a market disruptor?

Although 5G is a major factor in developing a new generation of better and more scalable IoT services, a widespread 5G deployment for an IoT product is unlikely anytime soon. Given the rate at which cellular networks are established, it will be some time before 5G networks are widespread enough to roll out a global IoT product, and that assumes that 5G is a fixed standard.

NB-IoT and LTE-M are generally seen as secondary to the super-fast mobile speeds anticipated for 5G connectivity, with NB-IoT and LTE-M1 both defining networking categories that are essentially designed to bring more devices online but at generally lower standards of connectivity. But the GSMA’s report, “NB-IoT and LTE-M in the 5G context,” argues that these categories will help to drive the development of “massive IoT,” referring to the broader Internet of Things of which 5G will be a central infrastructure component.

As GSMA Chief Technology Officer, Alex Sinclair explained in the report summary, while 5G is of course associated chiefly with super-high-speed mobile connectivity, “it will also serve a variety of use cases often with diametrically opposed requirements such as low data rates and long battery life as with the case of Mobile IoT.” That’s why the kinds of licensed NB-IoT and LTE-M networks that are already taking shape today “will continue to be a fundamental component of our 5G future ushering in an era of massive IoT.”

In short, incremental improvements on Cat-M1 and NB-IoT will continue to reduce costs and lower power requirements for IoT applications both tomorrow and far into the future. Product creators should be turning their attention to LTE if they want to work undisrupted for the next 10+ years.

Decision time – which should you choose?

As ever, there is no one answer. Both technologies have significant benefits, depending on the scope and specifics of a deployment. Geographical rollout will of course play a vital role in this decision, but as we are at an early stage in this market this is a moving target.

For low data-rate applications, mobility is really the standout differentiator between LTE-M and NB-IoT, with LTE-M allowing cell handover, whereas NB-IoT does not, and is therefore more suited to static use cases. It is likely that NB-IoT will prove more frugal on power, and also in cost terms, although the latter is still unclear.

Fortunately, module vendors have taken steps to mitigate this potential uncertainty, producing modem designs that can do both LTE and also drop-back to GPRS if required. This option provides the optimum current configuration and allows the future cost-reduction option of fitting the LTE-only version later, once the market has settled. 

Overall, the cellular IoT market is in a significant state of flux in terms of standards, and as we have seen in the past, betting wholesale on one or the other is a risk. Where possible, choosing adaptive modems that can cover the broadest range of options is the safest future-proofing strategy in the short term, albeit the costliest. Fortunately, in the medium term the competing standards will mature significantly, and future visibility will be increased dramatically…

Dunstan Power is a chartered electronics engineer providing electronics product development to ByteSnap Design’s clients. Dunstan has been working in the electronics industry for over 25 years since graduating from Cambridge University.

In 2008, Dunstan teamed up with former colleague Graeme Wintle to form ByteSnap Design, supplying customers with bespoke integrated software development and embedded design services.

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