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How should we bet in the LPWAN market?

The application scenario of a fragmented IoT has spurred the development of new wireless communication technologies: LPWAN (Low-Power Wide-Area Network) was developed for low speed, low power, and long-distance IoT applications with large number of connections, and has begun to stake its claim in the market.

There have been three equally matched types of technologies in the LPWAN market: One type is protocols that operate in the unlicensed spectrum, best represented by LoRa technology; the other type operates in the licensed spectrum, such as NB-IoT, which is supported by the 3GPP and has attracted great attention over the past two years. The last type is protocols that also operate the Ultra Narrow Band Radio in the unlicensed spectrum, such as Sigfox; The former had a head start and enjoys first mover advantage in the market and ecological chain. The latter was "born" to a higher status and has multitudes of telecom carrier and operator fans. The advantages and disadvantages of the three are constantly debated, and it seems that everyone has some advice to give regarding how to fall in line.

From a technical perspective, Sigfox, NB-IoT and LoRa each offers different features. NB-IoT is based on cellular technology and its gain is 20dB higher than the current network, coverage area is 100 times larger. One sector can support connections from 100,000 nodes, and the terminal module has a standby time up to 10 years. LoRa is based on chirp spread spectrum technology and has higher sensitivity. Its communication distance can exceed 15km; RX current is only 10mA; sleep current goes down to 200nA; each network can process 5 million messages sent between nodes a day; and positioning precision can reach 5m. Sigfox which is based on Ultra Narrow Band Radio with higher sensitivity and communication distance can reach the longest (30~50km in theory) out of the three LPWAN technologies. Also, it has the lowest power consumption, effectively extending battery life with its low bit rate transmission characteristic.
 

  NB-IoT LoRa Sigfox

Features

Cellular

Chirp spread spectrum

Ultra Narrow Band (UNB) radio

Deployment

Reuse current base stations

Independent deployment

Independent deployment by operator, Globally

Band

Telecom carrier bands

150MHz-1GHz unlicensed spectrum

868MHz – 920MHz unlicensed spectrum

Transmission distance

Long distance

Long distance (1—20km)

Long distance (3~10km (Urban area), 30~50km (Rural area)

Data Rate

<100kbps

0.3—50kbps

0.1kbps

Number of connections

200k/cell

200k—300k/hub

200k—300k/hub

Battery life

Approx. 10 years

Approx. 10 years

Approx. 10 years

Table 1 Comparison of NB-IoT, LoRa and sigfox Features


The pace of NB-IoT's development over the past year has been particularly eye-catching. Especially since June 2016, when core parts of the NB-IoT protocol were frozen by 3GPP, the commercialization of NB-IoT has only accelerated. In the case of China, which has been the most determined to develop NB-IoT, there has been a great flurry of activity in the industrial chain:

  • Government: Issued a series of documents ranging from standard technology research, system frequency planning, industrial application and promotion, to policy environment optimization, all to drive the deployment and application of NB-IoT.
     
  • Operators: Three telecom operators have begun NB-IoT deployment and commercial application on a trial basis. China Telecom plans to complete upgrades to 310,000 base stations in 2017, and China Mobile plans to deploy over 140,000 base stations within the year.
     
  • Applications: According to statistics of the Ministry of Industry and Information Technology, there are now 31 typical applications of NB-IoT in the country. Among these, ofo announced that it will adopt NB-IoT for its bike-sharing. There is no doubt that NB-IoT being adopted by such a high-profile enterprise will bring momentum to the market.
     
  • Technology: NB-IoT chips such as those from Huawei have been intensively released, and quickly lowered the cost of hardware. This has laid the foundation for commercial-scale application of NB-IoT.
     

How should we bet in the LPWAN market

Figure 1 ofo, Huawei and China Telecom jointly released a smart bicycle lock based on NB-IoT, which has become a symbolic commercial application for NB-IoT
 

Facing the aggressive offense of NB-IoT, LoRa seems to always be on the defense, but this does not mean its commercialization has stopped. Instead, LoRa is searching for more precise positioning based on its technical features and preliminary market explorations. Unlike the "take-it-all" strategy of NB-IoT, LoRa is intentionally avoiding direct conflict with NB-IoT, and is focusing on specific applications.

For example, LoRa has greater potential for optimizing power consumption and costs compared with NB-IoT. Hence, LoRa is focusing on applications where sensor data does not need to be frequently transmitted, or where a QoS guarantee is not required.

Furthermore, unlike NB-IoT which is dependent on infrastructure provided by operators, the greatest advantage of LoRa is that it enables rapid deployment by users based on their own needs. A parking lot network covering 10km x 10km and managing 3,000 nodes only requires 6 LoRa to be deployed, something that could be completed in 2 weeks. Especially in remote areas that are hard to reach for telecom carriers (such as agriculture and animal husbandry applications), LoRa is clearly much more persuasive in the market.

Also, clients who are more sensitive about data protection may not want their data to first be transmitted to an "outsider" such as a telecom carrier, so their hopes of deploying a private IoT is also an opportunity for LoRa.

How should we bet in the LPWAN market
 
Figure 2 LoRa is applied to rhinoceros protection in South Africa's Kruger National Park, showing its deployment advantage in areas hard to reach for cellular networks
 

Sigfox is the other LPWAN technology which has many advantages that increase its attractiveness for use in IoT applications where efficient data transmission over vast distances is key. The cost of implementing Sigfox is lower than that for NB-IoT and LoRa. And because it offers the lowest data rate, it boasts the lowest power consumption amongst the 3 technologies. The disadvantages of using Sigfox are its requirement to work with different operators in different countries and its single communication direction (in most cases). However, Sigfox is still very suitable for those applications which need wide coverage but infrequent data transmission. Water meter deployment is a good example of Sigfox deployment. 

smart water meter deployment in Australia and New Zealand.
 
Figure 3 Water conservation consultancy firm “WaterGroup” has signed a five-year partnership with Sigfox operator Thinxtra on its smart water meter deployment in Australia and New Zealand.

Some analysts state that the relationship between NB-IoT and LoRa (and other unlicensed spectrum LPWANs like Sigfox) may gradually shift from competition to "co-opetition": NB-IoT has larger bandwidth and is better suited for application scenarios with larger coverage, frequent data transmission, and long-term power supply; while LoRa may be used in application scenarios with low-power and low-cost coverage of key areas. On this basis, a possible mixed model may be users of the IoT in an area using LoRa, while continuing to transmit data through NB-IoT on a larger scale network.

In short, competition between technologies in the LPWAN market is a marathon, and the race has just begun. It is still too early to make any assertions about how it will play out. However, there is one thing we can be sure of: Customer-orientation is an iron law in the IoT market, and whoever wins the hearts of more customers will have the last laugh.

 

Application scenario Application characteristics Suited to wireless communications

Smart meters

High transmission rate; requires frequent communication; fixed device installed in densely populated area; power grid is insensitive to power consumption

Sigfox

Smart agriculture

Supports low-power, low-cost sensors for remote areas that are not covered by cellular networks

LoRa and Sigfox

Smart manufacturing

Diverse requirements: some scenarios require frequent communication and high QoS; while others require low-cost, low-power sensors

NB-IoT and LoRa Mixed deployment

Smart buildings

Does not require frequent sensor communications and does not have high requirements for QoS. A portable family gateway can satisfy requirements.

LoRa and Sigfox

Retail terminal

Requires more frequent high-quality data communication; has higher demands for timely communication and low latency

NB-IoT

Logistics tracking

Requires deployment in specific locations and large area tracking for communication while moving at high speeds

NB-IoT and LoRa Mixed deployment

Table 2 Recommended wireless communication deployments for different application scenarios

 

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