How should we bet in the LPWAN market?

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.
   

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.

 
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. 

 
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.