2022 was a big year for IoT - the launch of 5G Technology, the Apple announcement that the US iPhone 14 will be eSIM only, resulting in the gradual replacement of branded SIMs in favor of eSIMs, and the introduction of new generation low-cost Low Earth Orbiting (LEO) satellite constellations to solve the challenge for coverage in the most remote places, especially regions beyond mobile operator reach.
As per Statista, “The value of the IoT market is forecasted to grow around 1.6 trillion by 2025.” Let’s take a closer look at what will drive this growth for the year ahead.
#1: eSIM-only iPhones - an opportunity for Mobile Operators
With plastic SIMs on track to be replaced by electronic profiles, the proprietary, vendor-lock model of the MNOs selling mobile connectivity for IoT is looking set to be phased out. For enterprises that work with IoT devices, Apple’s announcement that their new generation iPhone will use an eSIM only is a game changer, as it has put a new option on the table. Localized Connectivity.
Up until recently, there have been two main approaches to accessing global connectivity for IoT - individual operator relationships and roaming agreements. As individual operator relationships are complex and not viable due to lack of visibility and control, and roaming relationships cause security, compliance and availability issues, we believe this is a perfect time for localization to enter the market.
#2: The rise of LPWA
LPWA (low power wide area) is designed for IoT applications that are low cost, use low data rates, require long battery life and often operate in remote and isolated locations. A few years ago LPWA was only a blip on the radar but with the advent of IoT, the blip has grown significantly. It is key for IoT applications to have extensive coverage and not all technologies provide this including traditional cellular which tends to falter when deep inside buildings or in extremely remote locations. Traditional cellular has always been designed with the consumer in mind (e.g. smart phones and laptops), so the technology has been engineered to deliver higher and higher speeds to transmit more and more data in a very efficient way. This has proven to be a very lucrative billing opportunity for mobile operators. On the other hand, LPWA is aimed at low ARPU devices and the cost of service for most IoT applications has to be low and overall revenue is derived from device scalability. This is not a model that operators can support with their current cost structure and processes which impose high overhead. Mobile operators will do well to consider an alternative business model with a very thin cost structure, to compensate for the meager revenue they generate from low data consumption. With the anticipated data stating that there will be 3 billion LPWA connections by 2025, this is definitely not a market segment to be ignored.
#3: Upcoming legislation for IoT
With digital transformation surging in the last few years, there has been an uptake in the Internet of Things (IoT). Experts estimate that there will be about 30 billion IoT devices by 2030. Along with this rapid adoption of IoT, there are many devices that have inadequate security which leaves consumers vulnerable to cyber-attacks. Legislation that will lead to enhanced consumer protection in both the US and Europe is currently being tabled and slated to be passed in the new year.
#4: Seamless connectivity between Public and Private Networks
While public networks are typically operated by key telecom players, with a considerable number of users accessing the network when in range, Mobile Private Networks (MPNs) are closed systems used by enterprises searching for improved performance and stronger security.
A big driver for mobile private network adoption, beyond the availability of 5G, is the fact that many key markets have issued licenses and made the cellular spectrum more affordable. We can see this with CBRS in the US, Lokale Netze in Germany, and unlicensed spectrum bands in the UK. Without this spectrum, private campuses would need to rely on the shared spectrum by mobile operators which tends to be leased to enterprises. With the advent of 5G technology, high speeds are now consistent enough for private cellular networks to become more widespread.
With the introduction of private networks, there is a growing need for seamless handoff between the private and public network for both national and global use cases. A symbiotic relationship between the two has many benefits. It means high availability, as the SIM connects to the private network, but moves to the public network if there is a network failure or a coverage gap. Additionally, it allows for business continuity, so that a SIM can connect to the private network on campus, and then when it leaves the perimeter, it can continue to be tracked and monitored via the public network. Consider use cases such as logistics, telematics, or cold chain, where mobility is part and parcel of the business value.
Who can provide this solution, bridging private and public network capabilities?
- MNOs - while they own the public spectrum and may lease it to the enterprises, they do not have the private network technology - mainly the Core Network and Radio Access Network (RAN)
- Technology platform vendors - while they can provide the necessary technology (Core Network, RAN), they do not own and thus cannot offer public network access.
- System Integrators - these own neither the technology nor the coverage, but are skilled and experienced in sourcing for both. However, enterprises will have to bear the premium associated with their services.
As can be seen, none of the immediate “go-to” players has what it takes to offer the required solution when it comes to private networks; the ideal candidates for providing private networks that are already blended within the public networks globally must possess the two most basic foundations - the technology and the public access.
#5: 5G satellite access – The sky is not the limit
The satellite communications ecosystem is evolving, with the new generation of Low Earth Orbit (LEO) satellites that enhance the delivery of mobile broadband and next-generation, LPWA connectivity technologies with low latency, across a constellation of satellites across the sky.
There has been quite a bit of activity around phones and satellites recently. The collaboration between T-Mobile and SpaceX, Apple announcing emergency SOS via satellite on iPhone 14, and players such as floLIVE teaming up with providers of cellular connectivity over satellite to provide continuous and affordable satellite Non-terrestrial Network (NTN) coverage.
The introduction of battery-powered devices that have a lifespan of years has also greatly expanded the types of possible use cases. With these new methods of connectivity, it’s possible to leverage applications that monitor power lines to prevent wildfires, help mining and construction companies track their assets live, and keep people safe in remote areas often challenged with limited to no cellular connectivity. The technology enables customers to send and receive data over satellite as they normally would, as long as they have access to open sky – whether stationary or mobile.
#6: Edge Computing to Take Center Stage
Data is multiplying at an incredible pace with IoT solutions living and dying by their data. Many mobile operators are moving to the cloud as it provides new revenue opportunities and networking capabilities, and augments public cloud offerings to deliver high-quality services, low TCO, quick time to market and scalability. However, with the proliferation of more and more devices out there, data needs to be transmitted by networks which currently use the cloud - however, these networks can never keep up this pace. Edge seems to be the next logical step. Edge processing is where IoT meets machine and artificial intelligence. It means that IoT data is gathered and processed ‘at the edge’ of a device, rather than sending the data up to the cloud with the resulting time lag. Mobile operators that implement this fast-growing trend in IoT can reduce potential bandwidth and data bottlenecks, speeding up information retrieval. It will be advantageous if mobile networks extend to the Edge.
