If you attended Mobile World Congress last week, as I did, you probably expect to see 5G networks and applications take over the world next week, next month, or at a minimum next year. Under the radar, and if you looked closer, you also saw signs of the new 4G extensions focused on Internet of Things connectivity, LTE-NB1 (formerly NB-IoT) and LTE-M1, which seem to be on this “same” timeline. In the world of IoT, 5G as well as LTE-NB and LTE-M, are critical to carriers being able to offer connectivity options tailored for IoT applications at acceptable price-points, to really make the magic of every device being connected a reality.
Mike Krell
(Source: Mike Krell, Moor Insights & Strategy)
The truth is that developing and deploying new network standards is not an easy task. It takes time to specify, develop, test and deploy new networks. It takes even more time for the hardware and software ecosystem that uses the networks to evolve. Standards development is a messy business, with many large multi-national enterprises involved putting billions of dollars on the line. And, it always takes longer than expected. So when can we really expect to really see the benefits of these new networks?
The Truth, The Whole Truth and Nothing but The Truth Is in the Eyes of the Beholder
5G, LTE-M1 and LTE-NB1 have all made great strides in the last year, but the truth is we have a long, long way to go before these technologies are fully deployed and able to produce significant IoT revenues for the companies involved.
5G, though gaining the majority of the press, and probably all the marketing, is much further off than either LTE-M or LTE-NB. What we are seeing today is initial chip announcements from the likes of and , as well as the announcement of 5G trials from a variety of chip vendors, network providers and operators including. Here is a quick (non-exhaustive) sampling:
- Verizon with a mix of partners including , Intel, Qualcomm and
- and
- AT&T and Intel
- Qualcomm, and
- , Ericsson and Qualcomm
- Telefónica and Huawei
5G will require a significant upgrade of the current LTE network. In addition, it’s about more than IoT / data. It’s also about upgrading the network for voice and video, and these two items have distinctly different characteristics than much of the IoT data. Given this fact, we may see 5G data deployed in pieces with 5G data available prior to 5G for handsets and voice/video connectivity. Given that we are still very early in initial test deployments of 5G, and that the specification is not yet completed, I don’t expect to see massive 5G deployments until 2020 and later—and that may be optimistic.
LTE-M and LTE-NB, on the other hand, are built on top of the current LTE infrastructure, making them a simpler (though by no means simple) upgrade to the existing network. Though both of these technologies are targeted at IoT applications, LTE-M has higher performance, supports voice and is better suited to mobile applications, such as asset tracking. LTE-NB is lower performance and cost and is targeted more at simpler and non-moving applications, like water meters. Both technologies are in trials now, with LTE-M slightly ahead—its specification has been stable for quite a bit longer than LTE-NB. There also seems to be a “regionality” to the rollout of these two technologies, with Huawei being the main force behind LTE-NB, and its main push being areas outside of the US. LTE-M initial deployments are primarily in the US with both AT&T and Verizon pushing hard to get networks deployed and operational. With both technologies, I expect 2017 and 2018 to be primarily years of network deployment, with 2019 and on when we will really see applications attached to these networks.
Always remember that when it comes to 5G, LTE-NB and LTE-M, what you hear is always dependent on who you’re hearing it from. Each player has an agenda and is looking to monetize these new networks ASAP, as well as being labeled the technology leader. I’m expecting to see great things from IoT networks in the next few years, with massive deployments on both LTE-NB and LTE-M. Though I’ll continue to watch the 5G progress, I really don’t expect to see significant revenues until the 2020s and beyond.
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Disclosure: My firm, Moor Insights & Strategy, like all research and analyst firms, provides or has provided research, analysis, advising and / or consulting to many high-tech companies in the industry including Huawei, Intel, Qualcomm and Samsung. I do not hold any equity positions with any companies cited in this column.
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