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Elson Sutanto, Principal Analyst at Juniper Research, joins MEF Advisor Andrew Parkin-White in a webinar to explore the market outlook and future opportunities of low power IoT. Elson provides a robust analysis of this market based on recent research by Juniper Research and explores a number of key issues. He examines how existing low power IoT technologies will develop over the next five years and how they will complement existing IoT networks. He looks at the role that MNOs can play and assesses the strategies that stakeholders can implement to capitalise on the growth of low power IoT networks and the value of the market by 2024.

Elson has identified several key takeways for the low power IoT market. Firstly, there is ‘no one size fits all’ for IoT applications will require different approaches. There are several key segments that are emerging.

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Smart metering, smart cities and commercial BEMS (Building Energy Management Solutions) will be the fastest growing LPWA sectors over the next five years. eSIMs are becoming an industry standard and will need evolve to replace traditional SIMs. Finally, low power connectivity will be part of the wider IoT ecosystem, rather than a single competing technology.

Juniper Research provided a snapshot of how these technologies will co-exist by 2023. It forecasts that there will be 64bn units globally by this time, of which 1.3bn will be cellular M2M connections. Of this figure, low power connections will be 100 million and will generate service revenues of $1 billiion with MNO billed revenues of $85 million.

Elson sees a series of market challenges for eSIM technologies as the number of embedded eSIMS grows. He sees that standardisation of eSIMs is crucial and the GSMA has been working towards the standard to allow key benefits including remote provisioning and ease of billing. The standardisation will also reduce the cost of deployment, allowing connectivity providers and can pass this cost reduction onto the users. Clearly, there are different rates of adoption in key verticals. The connected vehicle and telematics markets are emerging among the earliest adopters. By 2024, Juniper Research anticipates that 72% of vehicles with cellular-based telematics services will have an eSIM in use.

The connected vehicle and telematics markets are emerging among the earliest adopters of eSIMs. By 2024, Juniper Research anticipates that 72% of vehicles with cellular-based telematics services will have an eSIM in use.

The adoption level of eSIMs will differ significantly over the next 5 years, according to Elson. He points to smart cities as a relatively new concept, compared to automotive or healthcare. A large proportion of smart city devices will use eSIM technology, as many devices were released after the eSIM standards were finalised. Furthermore, he believes that many new smart city devices will operate over LPWA technologies and act as sensors, thereby creating an ideal environment for increased eSIM usage.

Juniper Research estimates that adoption of eSIM technology will increase across all sectors with growth forecast to exceed 350% by 2024. Globally, there has been a rapid launch of LPWA networks that will support this growth.

Clearly, there are some distinct challenges to adoption across these sectors. One of these is that each stakeholder, including operators providing services, device vendors and the end-service provider themselves, all have different levels of motivation to deploy eSIMs. It may be the case that stakeholders may wish to avoid eSIM implementation in its entirety due to the ease of switching connectivity provider. Furthermore, some vendors are unlikely to gain much benefit from the standards, thus will be less willing to adopt the technology unless the existing standards change.

Elson then gave some examples of sectors where low power IoT will have marked impact. He sees that unlicensed LPWA technologies will be the most attractive option in agriculture with low investment costs and future network scalability. Key applications will include crop management, smart irrigation and livestock management.

In the banking sector, mPOS devices are rapidly being adopted by SMEs, however they are often connected to another device via Bluetooth or Wi-Fi tethering negating the need for a dedicated low power connection on either cellular or unlicensed spectrum. Elson believes that vendors will increasingly include 4G connectivity in POS devices, primarily driven by the ability to offer cellular LPWA connectivity. By 2024, Juniper Research estimates that there will be over 2.4 million unlicensed LPWA connections in services for POS and banking globally, growing from less than 200,000 connections in 2019.

Smart cities will also turn to low power IoT for application deployment. Initially, the existing communications infrastructure and the varying requirements of the smart city for device communications will result in multiple technologies being deployed. LPWA will grow in importance owing to power and cost constraints with over 55% of smart city IoT connections using LPWA technologies. Cost savings and having a clear return on investment in a smart city platform will continue to dominate the technology choice with scalability being key for IoT connection growth.

Smart metering and smart grids are other major applications. In time, the generation of energy will become far more distributed than is it is at present, due to the build-out of renewable energy sources. Smart metering roll outs are funded by utility and billing companies, it is governments and the service providers themselves that are driving developments in this area. Companies stand to save significantly on meter reading costs, while governments will benefit from more efficient utility networks. LPWA technologies are very suitable to the needs of this industry with a low cost per connection enabled by low data traffic and duty cycle.

Clearly, low power IoT has a key role to play in the future of IoT connectivity and with some very apparent needs addressed in a range of market segments, leading to a considerable growth in connection and revenues over the next five years. Standardisation has played a key role in supporting LPWA growth as has the rollout of network globally. The elements for a successful ecosystem are in place and stakeholders will benefit from leveraging this technology.

Andrew Parkin-White

MEF Advisor