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The emergence of IoT will bring radical innovations and entirely new ways of delivering services across businesses and industries. Over the past few years, an exponential growth in smartphones led by ubiquitous mobile broadband coverage transformed telecom networks to being data centric networks. The evolution to the IoT will see mobility, broadband, and cloud as disruptive forces driving innovation in service delivery, network efficiency, and process agility to support the commercial models emerging from the Internet of things (IoT)
Unlike mobile broadband where the prime use case was smartphones, the evolution to IoT will necessitate a wide variety of use cases with varying degree of complexity to support varying demands of industries. To address these challenges, networks need to bring efficiency, agility, and automation to a level where they can offer viable commercial models addressing a wide spectrum of use cases encompassing many industries with their unique requirements and cost points.
IoT is a rapid-growing segment and forecasts point towards 30 Billion connected devices by 2020. Gartner predicts the IoT will provide a value add of USD 1.9 Trillion across all industries; making it one of the largest industries in 2020. An ecosystem of this magnitude means plenty of opportunities to explore new business models and revenue opportunities; however it is imperative for service providers to define their role today in this growing eco-system.
A fundamental question service providers need to answer is what role they would like to play in this new connected world. Their strategic choice will depend on their relevant strength and position in the market place as well as operating frame work. At an abstract level, carriers can focus on one, or a combination of the following three key strategies:
Network developers: Primary focus will be on core connectivity such as enterprise access, mobile broadband and device connectivity. Efficiency and ability to maintain service levels and use case driven commercial models will be key drivers and differentiators
Service Enablers: Will focus on creating platforms and systems over which services can be created and to which adds value. Examples include operators offering multi-paly packages, IPTV or M2M platforms.
Service Creators: Will control the entire value chain, controlling the connectivity, service delivery platforms as well as the applications, services and content.
A strategic vision needs to be augmented with a robust execution strategy where besides other factors; network will be at the center of this vision.
Challenges of existing networks
Current state of networks represent a fragmented approach where services are delivered over distributed platforms – each adding to the overall complexity of management, innovation, time to market, scalability and capability enhancement. Despite these inefficiencies, the telecom industry found a viable business case as there were few use cases to address.
The proliferation of OTT applications along with a rapid evolution of consumer demands is driving services providers in an inherent disadvantage when competing with the innovative business models offered by these new players. In addition, the evolution of networks will see a massive growth in the volume of traffic over a finite spectrum over multiple layers of technology, an unprecedented growth of devices spanning across multiple industries requiring a unique set of capabilities, and innovation and speed in building new services models at a much lower of cost points from today’s networks.
The wide variety of IoT use cases also means that the degree at which these capabilities are needed will vary from industry-to-industry.
The importance of network evolution
When we look at the needs of many of these IoT use cases, we see that cellular has a unique combination of characteristics which makes it an attractive choice for IoT. In contrast with other LPWAN technologies – mostly working in unlicensed spectrum – cellular in licensed spectrum meets a wide range of connectivity needs from both technology and business perspective.
Service providers can leverage the unmatched global reach of the cellular access infrastructure deployed over many years. Cellular also benefits from its mature eco system of chipset vendors, device makers, network suppliers, and service providers developed over a number of years. Moreover, the reliability, quality of service, security, and scalability aspects of cellular technologies makes it suitable to address the IoT market. That said, there are still gaps that need to be addressed to accelerate the uptake of the IoT.
There are more than 230 million existing cellular machine-to-machine (M2M) subscriptions for IoT devices, but certain challenges have limited the potential for large-scale adoption across a variety of use cases, namely: the cost of IoT devices, battery life, and cellular coverage in both remote areas and deep inside buildings.
Since cellular technology was mainly focused around human-to-machine consumption, the key innovations were around high throughput, spectral efficiency, and reduced latency. IoT use cases will drive new performance needs from cost, coverage, capacity, latency, battery life, and security .etc
Some of the gaps in GSM and LTE are now being addressed in 3GPP- REL 13 with extended coverage GSM (EC-GSM) and LTE-M being approved as study items in 3GPP Rel-13. EC-GSM will support use cases where deep indoor coverage, long battery life, and device cost are key drivers. This is especially interesting for applications where massive amounts of low cost sensors are needed. Typical examples of industries with such requirements include agriculture sector, smart meters, smart buildings, and other similar requirements where a small of data needs to be sent to the network. LTE-M could further support use cases where relatively higher data throughputs are desired with relatively low latency.
Device cost will be a key driver for the new eco-system, where market will also open up for new chipset players which will become more relevant in IoT space. The devices need to be simplified in HW to a degree that it can achieve much lower cost levels to make it feasible for industrial requirements.
LTE- Cat-0 chipset as an example will bring substantial cost reduction when compared with a Cat-4. There are also discussions on Cat-M and Lite in standards which could further drive down costs.
This is not to discount the requirement of 5G, as there will be an even broader spectrum of use cases – especially with critical MTC where the need of 5G will be inevitable either due of requirement of ultra-low latency or high reliability, and in some cases, better spectral efficiency from what can be achieved from today.
Road to 5G
5G is expected to start rolling-out in operator networks by 2020. Some of the key use cases of 5G will be related to IoT and machine-type communication, and currently a wide-array of technologies are being positioned as contributors to the eventual standardization.
5G networks will be multi-purpose and will support different virtual networks with different characteristics through network slicing – a dedicated slice for remote water metering for instance. Using a common infrastructure will stimulate many new business models by removing the need for separate infrastructure investment for different verticals. IoT applications will be a big part of 5G but the future starts today.
Operators need to establish their role in IoT using today’s networks to secure that they can leverage the full potential of IoT when 5G arrives. The first steps in this direction will be to evolve current technologies to support various terminal devices with very different characteristics.
Do you feel this covers how MNOs need to “evolve” for the IoT? Let us know your thoughts in the comments.