A low-power wide-area network (LPWAN) is a type of telecommunication network which allows long range communications at a low bit rate. The LPWAN is designed for Machine-to-Machine (M2M) and IoT (Internet of Things) communication, and can be used as a private network or a network offered by third party operators (network providers like LoRa, Sigfox and telecom operators offering NB-IoT ). LPWANs create the infrastructure needed to deploy sensors without investing in gateway technology.
A LPWAN is characterized by the following aspects:
- Long-range connectivity
- Low power consumption (batteries can last more than 10 years)
- Low deployment and operational cost
- Low bit rate communication
(Mikhaylov, Petäjäjärvi and Haenninen, 2016).
The network topology of two different LPWAN providers: NB-IoT and LoRa (the connection chain starts from top to bottom):
The development of Low Power Wireless Area Networks (LPWANs)
It is expected that by 2020, IoT will increase significantly with an estimated 50 billion devices that will be connected through radio telecommunications. Within the current IoT framework, LPWANs are rapidly developing and offer promising perspectives for various types of industries, i.e.: logistics (Mekki, Bajic, Chaxel and Meyer, 2018a).
The technology is still in its infancy stage but shows great potential. LPWANs fill a gap that current radio technologies have not yet been able to fill (Vogt, 2017). The LPWAN technologies are meant to complement cellular (2G, 3G, LTE) and wireless technologies (WiFi, Bluetooth, etc.) by enabling the connection of a large number of devices at a low cost (both in terms of hardware and infrastructure), with long range connectivity and significantly less power consumption.
The players in the LPWAN market
There are two different categories for the LPWAN technologies which define the major players offering the service: the non-proprietary and the proprietary.
- Non-proprietary: uses licensed spectrum bands (like 3G and 4G) and the infrastructure is provided by the major telecommunication companies. The licensed LPWAN technology is called NB-IoT and it’s widely supported by the major hardware manufacturers.
- Proprietary: the main proprietary technologies are LoRa and Sigfox networks (both also LPWAN), which use unlicensed spectrum bands. These can be unsuitable for certain applications like smart cities due to the amount of noise it can introduce in dense areas.
In this case however we are going to focus on NB-IoT and its applications. This technology is already rolling out worldwide with great advances, and soon will take over in most applications such as logistics, industrial and smart cities among others.
What is Narrowband IoT (NB-IoT)?
NB-IoT is a telecommunication protocol standard created by 3GPP in 2016, and is a collaborative standards association of telecommunication referents. Since the licensed band has a restricted operation, the communications within that network are less noisy, and so the quality of data transfer is better.
The network has an extended reach and signal power that enables a deep coverage, and deeper infrastructure penetration. In addition, it allows the connection of massive numbers of IoT devices (around 100,000 per base station) with low throughput. Finally, the communication presents low delay, lower cost for the devices and extremely low power consumption that would allow the batteries to last more than 10 years (Telekom, 2016).
What is the actual coverage of LPWANs?
The benefit of using cellular networks is that it gives the possibility to scale according to own capacities, which, by contrast, is another downside of the proprietary technologies as they need dedicated gateways and networks. If we look into the coverage of this network, by July 2018, NB-IoT had 58 mobile IoT networks commercially deployed in 32 countries. And companies like Deutsche Telekom aim to achieve more than 95% of geographical coverage in the near future
Digging into the business model and the costs
The NB-IoT business model suggests that partnerships with IoT technology providers and hardware manufacturers are helping network operators foster a more secure value chain. The operators consider that the value resides in providing connectivity as a service, thereby increasing the opportunity to generate revenue and moving up the value chain (Huawei, 2018).
The technology is currently in development, therefore not all telecommunication operators have rolled out NB-IoT yet. This results in undefined pricing, but at least there are some projections on the scope. The major players in Germany such as Vodafone and T-Mobile already offer NB-IoT as part of their portfolio. For example, the expected costs for the modules will decrease below US$5 in the next two years
What are the pros and cons of NB-IoT
The technology can effectively improve the realisation of IoT projects that require battery operated end devices and low-cost wide-area connectivity with an already settled infrastructure (Gartner, 2018). The main advantages of NB-IoT for providers are:
- Coexistence with current mobile networks (2G, 3G, LTE, 4G), the data is secured
- Data is secured
- Plug & Play
The main factors that define the performance of NB-IoT are: battery lifetime, traffic profile and coverage condition. From the client’s point of view, trade-offs have to be accepted depending on which factors are most important, and the type of project they need to cover. Additionally, mobile network operators can manage their own capacities within the existing networks they manage or even with roaming capabilities, therefore making scalability an easier task (T-Mobile, 2017).
On the other hand, disadvantages of NB-IoT are mainly the limited coverage that exists. There is still no global coverage because different operators around the world are still rolling out the technology and testing new capabilities along the way, such as the new roaming possibility. However, for example in Germany, a nationwide coverage is expected by the end of this year (Costa, 2017).
According to Costa (2017), there are still some challenges ahead that can result in stones on the way of NB-IoT:
- Deployment capacity is a potential problem
- The technology doesn’t support voice transmission
- Prices are still not defined, at least until the market is established
- Data rates are small
- Modules haven’t been long enough to develop enough reliability
What are the use cases?
NB-IoT is not a universal solution. There are many use cases and the technology supports a wide range of applications. These are some of the already working use cases:
- Smart parking
- Supply chain monitoring
- Smart street lighting
- Rail asset management (predictive maintenance)
- Air quality monitoring
- Smart waste management
- Postal delivery services (i.e.: packages that need refrigeration)
Some recommendations for the future
LPWAN technologies bring the opportunity to effectively collect and aggregate equipment at a low cost. This leads the way to new business models where data can be monetized by offering additional services to customers. Many companies, who bet on innovation, have realized their success by switching from being a product seller to a service provider. Such is the case of Rolls Royce for example, with their power-by-the-hour model (Emprechtinger, 2018).
Another trend that is becoming relevant across many industries is ‘predictive maintenance’. Given the exponential rate of technological development that comes with digitization, companies must be open to innovation and be ready to restructure their businesses if they want to gain competitive advantage, especially if they want to stay on top of the market. By using IoT to include predictive maintenance in operations, companies can reduce the downtime of machines between 30% and 50%. Moreover, lifetime of the machines is estimated to increase between 20% and 40% (Valerio et al., 2017).
- Mekki, K., Bajic, E., Chaxel, F., & Meyer, F. (2018b). Overview of Cellular LPWAN Technologies for IoT Deployment: Sigfox, LoRaWAN, and NB-IoT. In PerIoT’18 – Second IEEE International Workshop on Mobile and Pervasive Internet of Things (pp. 413–418). Athens: IEEE.
- Mikhaylov, K., Petäjäjärvi, J., & Haenninen, T. (2016). Analysis of the Capacity and Scalability of the LoRa Wide Area Network Technology. In Proc. of the European Wireless Conference (pp. 119–124). Oulu, Finland.
- Vogt, M. (2017, October). Lohnt sich heute schon der Einsatz von LPWA? Retrieved June 20, 2018, from https://www.management-circle.de/blog/einsatz-lpwa/
- Telekom (2016). Narrowband IoT: Groundbreaking in the Internet of things. Retrieved 27 July 2018 from https://iot.telekom.com/fileadmin/IoT_Downloads/Diverse/NarrowbandIoT_Whi tepaper_EN.pdf
- T-Mobile. (2017). NARROWBAND IOT The Game ChanGer for. T-Mobile.Retrieved June,12,2018,from https://iot.telekom.com/fileadmin/IoT_Downloads/Diverse/Whitepaper_Narrow Band_IoT_-_The_Game_Changer_for_the_Internet_of_Things__1.10.2017.pdf.
- Huawei. (2018). NB.IOT. Enabling New Business Opportunities. Huawei. Retrieved 20, July, 2018, from https://www.huawei.com/minisite/iot/img/nb_iot_whitepaper_en.pdf.
- Gartner. (2018). Emerging Technology Analysis: NB.IOT. Gartner. Retrieved 15 July, 2018, fromhttps://www.gartner.com/doc/3835366/emerging-technologyanalysis-nbiot.
- Costa, X. (2017). NB-IoT: Pros and Cons of the new LPWA Radio Technology. Retrieved July 14, 2018 fromhttps://www.slideshare.net/M2M_Alliance/nbiotpros-and-cons-of-the-new-lpwa-radio-technology
- Emprechtinger, F. (2018). 3 famous business model innovations and what you can learn from them. Retrieved July 27, 2018 from: http://www.leadinnovation.com/english-blog/famous-business-model-innovations
- Valerio, D., Mori, L., Noterdaeme, O. & Schmitz, C. (2017). Manufacturing: Analytics unleashes productivity and profitability. Retrieved July 26, 2018 from https://www.mckinsey.com/business-functions/operations/ourinsights/manufacturing-analytics-unleashes-productivity-and-profitability