How to play the NB-IoT game in 2019?

NB-IoT technology is a low-power wide area network (LPWA) solution defined by the 3GPP standard. Its characteristics are extremely low power consumption, wide coverage and a large number of connections. The device coverage range can be improved by 20dB, and the battery life can exceed 10 years.

Based on the above advantages of NB-IoT, and the release of the "Technical Requirements for Micro-power Short-range Radio Transmission Equipment (Draft for Comments)" by the Ministry of Industry and Information Technology, NB-IoT has become the main technology promoted by the three major operators and equipment suppliers represented by Huawei in China.

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2018 · Twists and turns

In 2017, many NB-IoT industry applications began to be deployed and incubated. In 2018, operators held large-scale bidding activities. China Mobile's 5 million NB-IoT module bidding plan also attracted the participation of most companies in the industry, and the price of NB-IoT modules fell below 20 yuan.

2018 was supposed to be a year of scale-up, but the market gave a cold response. Huawei had expected the total number of NB-IoT connections to reach 50 million in 2018, but now it seems that 30 million is barely enough.

Analyzing the reasons, the limitation of application scenarios is a major problem. The five major application scenarios with the most NB-IoT applications are: water, gas, electric vehicles, smoke detectors, and home appliances. There are also some more scattered sub-sectors that are difficult to scale up.

Although the Ministry of Industry and Information Technology has issued the "Technical Requirements for Micro-Power Short-Range Radio Transmitter Equipment (Draft for Comments)", which may be a heavy blow to LoRa, LoRa has not disappeared. Not only have Internet companies such as Alibaba, Tencent, and Google bet on LoRa, but many companies such as China Unicom and China Broadcasting Corporation have joined the LoRa camp, and the industry ecosystem has continued to grow. The battle for the kingship between NB-IoT and the two major camps has never stopped.

It is worth mentioning that although China Unicom holds NB-IoT, it has redeveloped LoRa since 2018 to avoid direct competition with China Mobile and China Telecom. The outside world generally speculates that given that China Unicom is in the high frequency band 1800MHz and the low frequency band 900 MHz spectrum resources are limited, compared with China Mobile and China Telecom, China Unicom's signal coverage does have inherent difficulties, and the deployment cost is higher than the other two operators. The market is still in the fermentation stage and is far from the profit point. If China Unicom can enter the LoRa technology, coupled with close cooperation with Alibaba, China Tower, and the radio and television system, from this point of view, it can add more possibilities for it in terms of the strategy of competing with China Mobile, China Telecom, and Huawei.

Therefore, the promotion of NB-IoT in 2018 also experienced twists and turns.

2019 · Development Trends

1. Application

According to IDC data, by 2025, the number of IoT devices worldwide will exceed 50 billion, of which industrial IoT devices will dominate. According to the China Industrial Internet Alliance, the industry scale is expected to grow at an average annual rate of 18% from 2017 to 2019, and will reach a trillion yuan scale by 2020.

In addition, the Industrial Internet and Internet of Vehicles are strategic high-value industries that drive the development of the new economy, and development dividends are expected. By deconstructing the industrial chain, the terminal layer and platform PaaS will take the lead in the future. NB-IoT technology has already determined its position in this outbreak.

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At present, the vertical application industries of NB-IoT are mainly concentrated in the transportation industry, logistics industry, health care, commodity retail industry, smart meter reading, public facilities, smart home, smart agriculture, industrial manufacturing, enterprise energy consumption management, and enterprise security protection. These demands have become the growing market for NB-IoT.

The specific application is shown in the figure below:

(Source: Economist Chart: Global Internet of Things Observation)

2. Infrastructure

As of September 2018, the number of NB-IoT base stations opened by China Telecom has expanded to 400,000. China Mobile has currently achieved continuous NB-IoT coverage and full commercial use in about 348 cities. In May 2018, China Unicom achieved commercial use of 300,000 NB-IoT base stations. The three operators have completed the commercial use of more than one million NB-IoT base stations. my country has built the world's largest NB-IoT network. Network optimization and deep coverage will be the focus of the next layout.

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It is estimated that by 2020, more than 1.5 million NB-IoT base stations will be built in China, ranking first in terms of scale. The network can basically achieve nationwide coverage and deep coverage of indoor, transportation road networks, underground pipe networks, etc. By 2025, the scale of NB-IoT base stations is expected to reach 3 million. The large-scale construction of NB-IoT base stations will lay a solid foundation for the development of my country's Internet of Things application industry.

3. Price

As for the lower price, there are also many arguments that module manufacturers are doing a "loss-making business". In fact, the bidding of NB-IoT modules is considered a platform for manufacturers to disclose prices, and it is unlikely that operators will purchase completely according to the bidding quantity. This gives manufacturers room for bargaining, and they can set a tiered price according to the purchase quantity, thereby ensuring the manufacturer's profit margin. In 2019, the price of NB-IoT modules will only gradually decline.

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4. Policy

As mentioned above, NB-IoT has policy support, which will clear many obstacles in market promotion. Overall, the global Internet of Things has taken over the mobile Internet and has become a new blue ocean of growth. Driven by policies, standards and policies, my country's Internet of Things technology will be dominated by NB-IoT. From 2018 to 2020, the Internet of Things will be in a period of explosive connection, among which the cellular Internet of Things will have greater growth elasticity. The cellular Internet of Things is monopolized by the three major operators, but the choice of connection method is consistent, mainly promoting NB-IoT and 4G connections.

Overcoming Difficulties

At present, the technical issues that need to be overcome urgently for my country's NB-IoT are particularly important, among which the difficulties faced by chip design are particularly important. Xiong Haifeng, president of Shanghai Yixin Communication Technology Co., Ltd., once pointed out in an interview: "NB-IoT chips must be modularized and SOC-based. If the performance of our receiving end is good enough, peripheral circuits such as DC/DC, FEM, and SAW can be simplified, which will reduce the cost of the module; on the other hand, the optimization and innovation of the chip architecture can solidify the core functions of the chip and the communication functions in hardware."

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Xiong Haifeng believes that NB-IoT chip design faces two difficulties. First, NB-IoT standards and industry are developing rapidly, and chips need to quickly follow the standards, evolve and iterate products, and quickly reach stability and maturity. This places high demands on the chip's frequency performance indicators, protocol consistency, and compatibility and stability with various base stations.

Secondly, to truly achieve low power consumption with a battery life of 10 years, comprehensive optimization design is required from chip architecture to implementation and actual application. These difficulties are also the development trend of NB-IoT chips, which requires the joint efforts of industry chain players to promote the maturity of technology.

How NB-IoT performs in 2019, we will have to wait and see!