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The current state and prospects of LPWAN radio technologies use for IoT market

July 2016

Analytical Report (full version)

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Analytical Report (full version)

The current state and prospects of LPWAN radio technologies use for IoT market
The current state and prospects of LPWAN radio technologies use for IoT market
July 2016

The current state and prospects of LPWAN radio technologies use for IoT market

July 2016

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J'son & Partners Consulting presents basic results of the study of the main trends and prospects of development of energy efficient wireless communication technologies designed for IoT networks in the world and in Russia.

 

Background for innovative communication technologies for IoT

 

According to the Ericsson Mobility Report, within 2015-2021 the number of IoT connections will increase with the CAGR (Compound annual growth rate) of 23%. By the end of 2021, the world will have 28 billion connected devices, including 15.7 billion user and industrial devices in the Internet of things: sensors, POS terminals, vehicles, scoreboards, indicators, etc. (Fig. 1).

 

 

Such a rapid growth of connected devices in the IoT segment and the various usage scenarios dictate certain requirements of networking – data transmission speed, latency, reliability, etc. These parameters are determined by the actual application, however, there is a number of common targets, which require introduction of innovative network technologies for IoT. The main such indicators, in particular are:

 

✓     the cost of implementing a network technology in the end device;

✓     power consumption and battery life;

✓     the network coverage.

 

Developments of the last years in the field of wireless data transmission are associated both with the desire to adapt existing network architectures and protocols, and creation of new system solutions from scratch. On the one hand, there are technologies with short range, which quite successfully solve the problems of IoT communications within the same premise or limited area – Wi-Fi, Bluetooth, Z-Wave, Zigbee, etc. On the other hand, there are mobile technologies which are out of competition, in terms of coverage (GSM – 90% of the populated area of the Earth, WCDMA — up to 65% LTE — 40%) and scalability. However, the major disadvantage of both short range technologies, and traditional cellular technologies is limited work time of device batteries. In addition, mobile technologies are quite expensive, and Wi-Fi, Zigbee and other technologies of small action radius do not provide a sufficient network coverage and they are poorly managed as well.

 

The steps taken in frames of the mobile communication standards development, particularly the specifications of 3GPP Release 13, aimed, inter alia, to achieve the IoT targets, maintaining the advantages of the global ecosystem usage. It is assumed that the evolution of these technologies will be the basis of future modifications of the mobile communication standards, including standards for 5G.

 

On the other hand, energy efficient technologies for low power for unlicensed frequency spectrum, such as LoRa, Sigfox, Russian “Strizh” and others are actively developing.

 

Definition, brief description and comparison of LPWAN technologies

 

LoRaWAN

 

The LoRa technology combines the modulation method LoRa in wireless networks of wide radius with low power consumption (LPWAN, Low Power Wide Area Network) and the open network Protocol LoRaWAN (Long Range Wide Area Networks), presented at the beginning of 2015 by Semtech Corporation and IBM Research.

 

The LoRa technology appeared under the auspices of a nonprofit organization LoRa Alliance, founded by companies such as IBM, Semtech, Cisco, Actility, etc., for adoption and promotion of the Protocol LoRaWAN as the unified standard for LPWAN networks. Members of LoRa Alliance position LoRa as a technology that has significant advantages over cellular networks and networks of small action radius thanks to the ability to deploy communications at distances up to 20 km and speed up to 11 Kbitps with minimum power consumption, providing several years of battery life on a single AA battery.

 

In addition, unlike cellular technology, LoRaWAN networks are combined (hybrid) and allow, on the one hand, to use private networks, but on the other hand — public networks. This, for example, will allow you to connect a large number of different sensors (more than 100) to a private network inside of the household with access to public network operator. Theoretically, such a hybrid network could be organized on the basis of Wi-Fi, but due to the technological limitations of this standard such model is not possible to be effectively implemented. These disadvantages of Wi-Fi were take into consideration by the LoRaWAN developers.

 

In June 2015 LoRa Alliance has released the 1.0 release LoRaWAN, which claims itself as the first global standard LPWA. As of the end of Q1 2016, the LoRaWAN technology was put into commercial operation in 13 countries and the tests were carried out in more than 60 countries. It requires a relatively small number of base LoRa stations to cover a considerable area and therefore it lowers the costs. For example, it took about 500 base stations in the Netherlands to cover the entire country; a significant part of Switzerland is covered with approximately 250 base stations and it took approximately 360 base stations to cover about 90% of the territory of Belgium.

 

Sigfox

 

The system is built by the same company, founded in France in 2009. It uses technology called Ultra Narrow Band (UNB), which was originally designed for communication at low data transmission speeds.

 

Sigfox currently uses the most popular European ISM-band 868MHz (as defined by ETSI and CEPT) as well as 902 MHz in the U.S. (as defined by FCC), depending on specific regional regulations. The system is developed with use of the capabilities of modern cellular networks.

 

One device can send up to 140 messages per day and each message can contain up to 12 bytes of useful data. 12 bytes cover the needs of devices that transmit data, such as the location of the device, the index of energy consumption, alarm signals, or any other type of primary sensory information. You can also send up to 4 messages with 8 bytes of useful data in each in the direction of each device per day. In order to receive messages, the device must request data from the server, it has to be programmed for specific events or for a certain time. 8 bytes sent to the device, allow, if necessary, to send the configuration data, you can also optimize the battery life. This is enough if you do not need full two-way communication.

 

Advantages of Sigfox:

  • great coverage area;
  • high penetration in urban areas;
  • ultra-low power consumption, according to estimates, up to 20 years of sensor operation from 2 AA batteries;
  • high antenna design flexibility;
  • SigFox Protocol is compatible with existing transceivers;
  • low cost.

Disadvantages of Sigfox:

  • low speed of data transfer
  • dependence on cellular infrastructure
  • limited interference immunity
  • there is no Sigfox networks in Russia.

 

According to data as of July 20, 2016, the number of countries with deployed Sigfox networks has reached 20, while the number of registered devices has exceeded 7 million. By the end of 2016, the company plans to cover over 30 countries with its networks.

 

3GPP technologies

 

The 3GPP consortium (The 3rd Generation Partnership Project) that develops specifications for mobile communication, has long been working to improve GSM and LTE standards for IoT applications. According to the consortium, they have almost managed to solve all the stated problems, including energy efficiency. Expected cost of one module by the end of 2016, was estimated at $4.5 for GSM and $5 for LTE-M. However, according to one of the experts, currently, LTE-M modules are much more expensive. According to Link Labs by the end of August 2015, the wholesale cost of one LTE module (in case if you purchase very large quantities) was about $25-30. According to other estimates, at the end of Q1 2015 the cost of one LTE module was over $50.

 

The main advantages of using GSM and LTE technologies for IoT include: functioning on the existing infrastructure of mobile operators, widespread in the world, high speed data transmission, high security level, roaming support, etc. The main disadvantages are high tariffs and the need to use licensed frequencies.

 

In September 2015 Nokia, Ericsson and Intel teamed up to promote the technology of Narrow-Band Long-Term Evolution (NB-LTE). Sprint, Verizon Wireless, Alcatel-Lucent, Qualcomm, Samsung, Sony and ZTE have also become part of this initiative. NB-LTE was seen by some experts as a direct challenge to Huawei, which has developed technology Narrowband Cellular IoT (NB-CIoT) and received support from such major operators like Vodafone, T-Mobile, TeliaSonera and China Unicom.

 

To date, the dispute between advocates of different versions of NB-Oth is over. The roadmap for transition from LTE cat.1 to LTE cat.2 and then to NB-IOP (LTE cat. M2) has been approved.

 

Advantages and disadvantages of the 3GPP technology grow naturally from GSM and LTE. In particular, excessive data transmission speed for most existing IoT applications in LTE-M leads to high power consumption and reduce the terminal devices autonomy (Table. 1).

 

 

Projects on building LPWAN networks in the world

 

However, projects using technologies that are not related to 3GPP (LoRa, Sigfox, "swift", etc.), are being actively implemented, in particular by mobile operators. For example, in July 2016, South Korean operator SK Telecom launched commercial operation of a LoRaWAN network covering 99% of the population. Earlier, in March 2016, the company had completed a nationwide LTE-M network.

 

Today in Europe there are several major LoRa networks – in Belgium, Netherlands, Switzerland, France and other countries. Dozens of large-scale LoRa networks are being tested, implemented, and expanded in European countries such as Czech Republic, Finland, Denmark, Germany, Italy, etc.

 

One example of the Sigfox technology use is installing smart water meters in Antwerp (Belgium). During the testing phase, in the first year, it was planned to install 1000 water meters. In case of positive results within four years (until 2020) – 205 000 such water meters will be deployed throughout the country.

 

 

"Tower" company Cellnex launched a Sigfox network of 1500 base stations in Spain. At the end of 2015 the Alarm Transmission Network (ATN) network had about 250 thousand connected security systems from Securitas Direct, which had integrated Sigfox technology into existing security GSM-system to improve the reliability and redundancy of the communication channel.

 

 

According to data as of July 20, 2016, the number of countries with deployed Sigfox networks has reached 20, while the number of registered devices has exceeded 7 million. By the end of 2016 the company plans to cover over 30 countries with its networks.

 

As of mid-2016 the “Strizh” network, developed by the Russian company "Strizh Telematica", has more than 250 base stations in 30 regions of Russia and abroad. Full coverage exists in all million-plus cities of the Russian Federation. It is planned to expand the network not only in Russia but in other CIS countries.

 

Examples of usage

 

LoRa and other LPWAN technologies can be used in various IoT applications, from smart meters to utilities (see Fig.2) managing garbage collecting and smart parking to solutions in the field of industry, agriculture and livestock. Example of using the LoRa technology in the field of smart homes is presented below.

 

Main drivers and constraints of development LPWAN in Russia

 

Despite the obvious described above benefits of available now LPWAN technologies in Russia (primarily LoRaWAN), their more active development is hindered by such factors as:

 

  • lack of a clear understanding of the main objectives and tasks within IoT projects among many customers and, as a result, some difficulties with formation of technical specifications;
  • shortage of specialized companies that could take on the role of developers and system integrators, see the core of the customers’ problems and business processes, choose and implement an appropriate solution;
  • lack of certified professionals in the field of IoT LPWAN;
  • high cost of the sensors (the minimum cost of components for one sensor is $12-13 for a single sensor, the finished sensor costs $25).

 

Despite these difficulties, we can eventually overcome them. For example, according to one expert, three major system integrators plan to send a team of specialists to one of the European countries for training and subsequent certification for further servicing of the LoRaWAN networks according to the contracts.

 

Prospects in Russia

 

According to experts, 2017 will be marked by competition among mobile operators in the field of IoT for larger companies and corporate customers. Until that time, these customers will be a tasty morsel for the big IT market players (Cisco, HP, SAP, Microsoft, etc.) and for startups of the LPWA market. The IoT mass market will likely appear after 2018, when the market price of finished terminal devices will fall by much in comparison with the current prices – 10-12 Euros per device.

 

Commercialization of the NB-IoT technology (LTE-a Cat.M2) will also be shifted in time – it is, according to some estimates, will begin in Russia not earlier than in 2018. In addition, experts say, that even after 2019, when mobile operators will upgrade their networks to LTE-a Cat.M2, LoRaWAN will be in demand as more economical for those solutions that admit significant duty cycles between transmissions of data packets.

 

Sigfox technology is not presented yet in Russia.

 

Thus, in the context of absence of competition in Russia in fact, there are mainly two implemented LPWA technologies: global LoRaWAN, focusing primarily on major customers of the industrial Internet, and the local "Strizh". And their implementation is done mainly via replacing networking solutions of the short range - Wi-Fi, Bluetooth, ZigBee, etc.

 

Russian mobile operators currently prefer the 3GPP technology. For example, in mid-2016 MTS and Ericsson signed an agreement to supply software for modernization of the MTS network before 2019. It is expected that it will allow companies to implement technological solutions of the Internet of things, in particular to test the technology of advanced GSM (EC-GSM-IoT) that enables operation of M2M devices on existing networks of MTS. According to the representatives of the operator, usage of this technology does not require large-scale replacement of communication equipment and in most cases will allow to upgrade the software on the radio nodes.

 

It is important to note that the LoRaWAN technology at this stage does not compete with mobile communication technologies in the market of Internet of things in general, it is aimed at replacing of inefficient (cost, autonomy of the terminal devices, vulnerability, etc.), technologies of the middle range - Zigbee, Wi-Fi, etc.

 

Emergence and development of new LPWAN technologies also stimulate business of infrastructure ("tower") companies which rent their antenna-mast structures for base stations of mobile communication. Installation of the LoRa and Sigfox equipment as well as other standards for the Internet of things will boost the revenue of "tower" companies in the medium and long term in conditions of saturation of the mobile market and slowdown of tempo of new sites construction.

 

Construction of an IoT network based on the LoRa technology in Finland is a good example. With help of 70 towers the broadcasting company “Digita” plans to cover the entire country with the LORA WAN NETWORK. In particular, it is planned to use sensors of temperature/humidity and motion, installed in individual households during the project.

 

Independent assessment of the status and prospects of development of global networks with low power consumption (LPWAN) for the IoT market shows that LoRaWAN and maybe Sigfox will be the most demanded technologies in the next 1-2 years and later. In the longer term we can expect a combination of 3GPP technologies (e.g., LTE-M) adapted for IoT and existing LPWAN technologies.

 

Comments of market participants

 

– Please, name the largest completed projects or projects under implementation which are based on the LoRa technology in the world.

 

– Today in Europe there are several major LoRa networks which are opened for business projects:

·         Proximus covers a large part of the territory of Belgium;

·         KPN accelerates the launch of the network in the Netherlands;

·         Swisscom implements their network in Switzerland.

 

In France, two major mobile operators have chosen LoRa and began construction of the network:

·         Objenious, subsidiary company of Bouygues Telecom, has installed 1,000 LoRa base stations to cover the largest cities in France, the operator seeks to cover the entire country by the end of 2016;

·         Orange rolls out their network in 17 major cities and plans to provide 100% coverage of the country in 2017.

 

In addition, dozens of large-scale LoRa networks are tested in European countries such as Czech Republic, Finland, Denmark, Germany, Italy, etc. South Korean operator SK Telecom also announced a large-scale construction of a LoRa network. In addition, at the moment, LoRa is tested by almost all operators in Southeast Asia.

 

Operators are supporters of LoRa, because some cases and vertical markets such as Smart metering require long-term SLAs. LoRa Alliance also supports roaming agreements between the operators and the first commercial roaming agreements are signed today.

 

 

– What are the prospects for the LPWAN technologies development in Russia?

 

– 2017 will be marked by competition between mobile operators on the area of the IoT services for major state-owned companies and corporate customers. Until that time, these customers will be a tidbit both for the big players of the IT-market (Cisco, HP, SAP, Microsoft, etc.) and startups of the LPWA market. I do not see demanded solutions for the mass market of the Internet of things in Russia yet. It is unlikely that they will appear before the end of 2017. By this time, the device purchase price will be about 10-12 Euros, which is much lower than the current price level.

 

Commercialization of the NB-IoT technology (LTE-a Cat.M2) will not begin in Russia earlier than in 2018. So those who do not want to miss major customers of the industrial Internet during these two years, are now actively implementing the only possible in Russia global LPWA standard – LoRaWAN (Sigfox is not presented in Russia). And the implementation is done mainly via replacing networking solutions of the short range (ZigBee, etc.).

 

The main advantage of LoRaWAN is its energy efficiency. The peak amperage for LoRaWAN is six times lower than that of NB-IoT, so even after 2019, when the mobile operators will upgrade their networks to LTE-a Cat.M2, LoRaWAN will be in demand as more economical for those solutions that admit significant duty cycles between transmissions of data packets.

 

 Detailed results of the research presented in the full version of the report

 

“The current state and prospects of radio technologies for global networks with low power consumption (LPWAN) for the market of the Internet of things (IoT)

Content

Terms dictionary

Summary

Introduction

1. Classification and main characteristics of the LPWAN technologies

1.1. LoRaWAN

1.1.1. Brief history of the LoRa technology emergence

1.1.2. Use cases

1.1.3. Architecture of the LoRaWAN networks

1.1.4. Security and data privacy

1.1.5. Basic classes of devices in the LoRaWAN networks

1.1.6. Frequency ranges

1.1.7. Regulatory issues

1.2. Sigfox

1.3. 3GPP Release 13 technologies

1.3.1. EC-GSM

1.3.2. eMTC

1.3.3. NB IoT

1.4. Other technologies

1.4.1. Wi-SUN

1.4.2. STRIZH

1.4.3. Weightless

1.4.4. Nuel

1.4.5. Nwave

1.4.6. Dash7

2. The advantages and disadvantages of the main LPWAN technologies

2.1. LoRaWAN vs NB-IoT

2.2. LoRaWAN vs Sigfox

2.2.1. Technological differences

2.2.2. Business model

2.2.3. Use cases

2.3. «Strizh» vs other technologies

3. Analysis of projects on introduction of the LPWAN technologies

3.1. LoRaWAN

3.2. Sigfox

3.3. Other technologies

3.3.1. LTE-M

3.3.2. NB-IoT

4. Drivers and constraining factors in the development of LPWAN

5. Prospects of various LPWAN technologies

5.1. Forecasts for the world

5.2. Forecasts for the Russian Federation

6. Application

6.1. Main Sigfox projects in the world

6.2. Commercial LoRaWAN projects in the world

6.3. Projects in Russia

 

The newsletter prepared by J'son & Partners Consulting. We work hard to provide factual and prognostic data that fully reflect the situation and which are available at the time of the release. J'son & Partners Consulting reserves the right to revise the data after publication of new official information from particular players.

 

J'son & Partners Consulting presents basic results of the study of the main trends and prospects of development of energy efficient wireless communication technologies designed for IoT networks in the world and in Russia.