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Carriers, telecom equipment makers battle over 'Internet of Things' infrastructure

Experts from some 300 companies attended an NB-IoT summit in Barcelona on Feb. 21.

BARCELONA, Spain -- Wireless carriers and telecom equipment manufacturers of the world are locked in a high-stakes battle over the infrastructure technology for the "Internet of Things."

     The Internet of Things is a network of countless digital devices -- not just telecom gadgets like smartphones and tablets, but also sensors in homes, cars and machinery of all kinds -- that allow them to communicate with each other to automate tasks and make life more efficient and convenient.

     The Internet of Things is rapidly expanding the dimensions and implications of machine-to-machine communication -- with the number of devices talking to each other soaring.

     But how all the "smart" gadgets should talk to each other has yet to be determined. This is where three groups of companies are competing to establish a global standard for the technological infrastructure for a market expected to grow to be worth nearly 150 trillion yen ($1.3 trillion) in 2019.

     The Internet of Things is growing at a dazzling speed, with the number of connected devices projected to top 20 billion in 2020.

     Most of these devices, however, will be sensors that send only small amounts of data infrequently.

     Smart meters to measure electricity consumption, for instance, only send data of about 100 bytes or so to utilities once a month.

     Cellular phone networks have mainly been used for the Internet of Things, but one promising low-cost alternative is gaining popularity: Low-Power Wide-Area (LPWA) networks, wireless communications networks designed for long-range communications at low data transmission speeds. LPWA technology was a major topic at the Mobile World Congress, a wireless communications trade show in late February in Barcelona.

     Proponents say LPWA networks are ideal for Internet of Things devices because they can cover wide areas without consuming much electricity.

     Two AA batteries can enable devices to work with LPWA networks for more than 10 years, according to companies offering such networks.

     The technology is therefore a good, cost-effective alternative to exiting mobile phone networks, especially for sensors used in environments where securing power sources or replacing batteries is difficult.

     Currently, Sigfox, a French networking startup, and the LoRa Alliance, a group of companies led by Semtech of the U.S., are offering LPWA services.

     Their networks work with hardware for Internet connectivity that manufacturers can integrate into their products. Relying on unlicensed spectrum, these networks are designed to transmit small amounts of data at low speeds.

     Sigfox, however, is leading the LoRa Alliance in terms of customer base.

     The French company, which has Japan's NTT Docomo among its shareholders, is already operating in 14 countries, mainly in Europe.

     More than 7 million devices, such as various smart meters and electronic signboards, have been connected to its network.

     Sigfox's service is cheap, with charges for one device starting at $1 per year.

     Using industrial, scientific and medical radio bands lower than 1 gigahertz, Sigfox's network can cover wide areas with only a few base stations. ISM bands can be used for any purpose without a license. Cordless phones and wireless microphones are among the devices that use ISM bands.

     Sigfox's LPWA network transmits data at a speed of just 0.1 kilobit per second, far slower than the megabit networks of mobile phones.

     Using low-priced parts based on common technology, a base station for Sigfox networks costs less than one-tenth the price of a typical base station for high-speed mobile services.

     Sigfox Chairman Anne Lauvergeon said wireless service providers used to be skeptical about the company's technology but now regards it as a partner.

     Besides DoCoMo, Deutsche Telekom of Germany and Telefonica of Spain have decided to form an alliance with the French company.

     The LoRa Alliance includes a bevy of major U.S. information technology players, including IBM and Cisco Systems.

     At the Mobile World Congress in Barcelona, the alliance announced a plan to expand into Germany and a partnership with ARM Holdings, a British company that designs semiconductor devices.

     NB-IoT is a narrowband radio technology designed for the Internet of Things that is being promoted by such major makers of mobile phones as China's Huawei Technologies and Sweden's Ericsson.

     Unlike the networks offered by Sigfox or the LoRa Alliance, NB-IoT uses licensed radio bands and standardized telecom technologies.

     NB-IoT services can be offered through existing base stations for mobile phones only by tweaking software. This makes the technology as cost competitive as Sigfox's network. Commercial NB-IoT services are expected to be launched as early as 2017.

     On the day before the MWC started, some 300 companies including Intel and Qualcomm as well as phone makers and wireless carriers gathered in Barcelona for an NB-IoT summit. They argued that NB-IoT, which uses existing cellphone networks, is the most reliable infrastructure for the Internet of Things.

LPWA battle

With excited talk about future wireless networks swirling in telecom industries, one might expect wireless equipment makers and carriers to focus their research and development efforts on fifth generation (5G) mobile networks.

     But these companies are rushing to roll out LPWA services because the rapid growth of the IoT is requiring them to get ready quickly for the battle for a strong position in the IoT value chain. If they wait for the advent of 5G, wireless players fear they will fail to ride the wave of network evolution.

     Besides being much faster than current 4G mobile networks, 5G networks should also be able to serve as a key infrastructure for the IoT, allowing myriads of connected devices to do heavy computational tasks and run rich content and services.

     But the work to hammer out standards for 5G networks has barely begun. The first real 5G networks are expected to arrive in three to four years at the earliest.

     Meanwhile, the IoT is already creating new business opportunities that need to be grabbed right now. Companies trying to get into the IoT game cannot afford to wait for the commercialization of 5G.

     Many IoT devices connected to LPWA networks run for 10 years without a battery replacement. That means customers of LPWA service providers are likely to remain subscribers to the networks at least for 10 years.

     "One factor driving companies into entering the IoT market is the first-mover advantage that can be gained easily in the market," said Shigeyuki Kishida, chief researcher at InfoCom Research, a Tokyo-based think-tank.

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