For all the talk of the importance of the internet of things for mobile and fixed network connectivity providers, it still is reasonable to ask how much revenue impact IoT actually will have for service providers in a direct sense.
The biggest impact might continue to be indirect, as IoT deployments rely on some form of local distribution (local area network). Connections to the wide area network still will be necessary, but general-purpose broadband connections might suffice.
Mobile networks and local untethered networks such as Wi-Fi presently represent the majority of internet of things device connections, according to GlobalData. In 2020, mobile operators supplied about 32 percent of connections other than narrowband IoT. Add NB-IoT and mobile operators had about 33 percent of connections, while short-range networks supported 51 percent of connections.
At least so far, most IoT connections supported by mobile operators have relied on 2G or 3G. Going forward, narrowband sensors and devices are likely to be supported by either NB-IoT or Category M networks, while higher bandwidth devices use 4G or 5G, predicts Ericsson.
“Narrowband” in Ericsson’s view includes all apps requiring up to 7 Mbps upstream or as much as 4 Mbps downstream. Some of us might view that as something more than narrowband, but not broadband (using a 25 Mbps downstream rate as the minimum). We used to call that space in the capacity dimension “wideband.”
The nomenclature has gotten a bit confused as some suppliers try to create a marketing platform using “wideband” as “more than broadband.” Personally, I’ll stick with the traditional usage. Narrowband (less than 1 Mbps, wideband (everything between 1 Mbps or 1.5 Mbps and 25 Mbps) and broadband (25 Mbps and above).
The biggest wildcard is 5G network slicing. Eventually, 2G and 3G will not be available to support narrowband use cases, so the issue is whether the substitute is NB-IoT or LTE-M using the 4G platform, or possibly a 5G network slice optimized for narrowband communications, or relatively “native” support for NB-IoT and LTE-M on the 5G network.
Latency, not simply bandwidth, is the other crucial issue. In some settings, latency performance--rather than bandwidth--will be the key requirement. In such cases, 5G might be the only real choice, with some form of edge computing also required.
Range and battery life considerations also will affect connectivity platform choices. Also, cost always is an issue. Wi-Fi connections will cost significantly less than mobile connections (both device capability and the recurring cost of service).
The larger point is that indirect feature benefit often is quite important for connectivity service provider direct benefit connection revenue. Any features that improve market share, aid new account acquisitions, reduce churn or improve the customer's sense of value contribute to overall revenue opportunities.
Still, the direct value of new IoT connections might be less significant than some expect.
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