Will NB-IoT help or hinder the evolution of IoT?

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Vodafone recently announced that it has completed its first commercial roll-out of NB-IoT connectivity in the Spanish cities of Valencia and Madrid. This is the first part of a broader roll-out in Spain, which will include implementing NB-IoT in Barcelona, Bilbao, Málaga and Seville by the end of March 2017.

NB-IoT is the licensed spectrum answer to low power wide area connectivity solutions like LoRa and Sigfox. The relatively low bandwidth of licensed spectrum means it can be used to connect devices used deep indoors or underground such as gas meters, water meters, smoke and fire alarms and parking monitors. Vodafone's Spanish roll-out was completed by updating software in existing base stations.

It's interesting to see how quickly the operator community has moved to bring out a licensed-spectrum alternative to Sigfox and LoRa, indicating how much of a threat these companies pose to operators' roles in the fast-developing IoT ecosystem. Although many operators are now looking to provide services in multiple layers of the IoT ecosystem, connectivity is their way in, so they are right to be nervous about non-licensed connectivity providers taking away potential market share.

In fact, the operator community may have tried to move too quickly this time. This has led to two essentially incompatible variations of NB-IoT being developed at the same time:

One, led by Nokia and Ericsson, is proposing a lower power variant of 4G that it is capable of working with other 4G devices on the same spectrum, so can be slotted into existing networks.  Drawbacks to this standard include complexity in the chip, meaning it is more expensive, and difficult to make it very low power.

The other approach is being led by Huawei and Vodafone, and requires operators to reserve a small amount of spectrum for just IoT traffic. Because the chips don't need to be aware of other 4G traffic, they can be much simpler and therefore cheaper. 

The 3GPP (the 3rd Generation Partnership Project) has not made a choice between which NB-IoT standard should be favoured, so both are being developed. As the figure below (taken from our report, The IoT ecosystem and four operators' strategies) shows, in order for the IoT area to deliver new insights it needs to have access to lots of data points through interoperable standards. Although launching both varieties of the NB-IoT standard allows operators to compete with LPWAN technologies more quickly, it is likely to lead to competition between the two standards, similar to what happened with LTE and WiMAX, which could be detrimental to the overall evolution of IoT.

Figure 1: IoT use-case evolution

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Source: STL Partners

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