Why do Tencent and Alibaba use LoRa, and operators use NB-loT?

Industry insiders are familiar with LoRa technology, which is often compared with NB-IoT technology. As emerging technologies of low-power wide area networks (LPWAN), both technologies have attracted much attention.

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At present, in China, the development of NB-IoT technology is in full swing due to the favor of national policies, telecom operators and industry giants. In comparison, LoRa technology, which has been silent for a long time due to frequency band authorization issues, is much more low-key.

However, recently, the cooperation between Alibaba and China Tower, as well as the news that Tencent announced its joining the LoRa Alliance, have injected a "booster" into the industry. With the support of Internet giants such as Alibaba and Tencent, LoRa technology may usher in another spring in China.

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Alibaba Cloud claims to connect 10 billion devices in the next five years. In April this year, Alibaba Cloud announced that the Internet of Things platform based on LoRa devices and wireless radio frequency technology has begun trial commercial use.

Tencent has focused on investments in LoRaWAN technology and applications. In July 2018, Tencent also announced plans to build a LoRaWAN network in Shenzhen with partners to provide smart solutions for cities, finance, healthcare, retail and industry.

1. LoRa technology has broad market prospects

LoRa technology was first developed by French company Cycleo (founded in 2009) as a patented spread spectrum wireless modulation technology. In 2012, Cycleo was acquired by US company Semtech for approximately US$5 million. After the acquisition, Semtech, in order to promote other companies to participate in the LoRa ecosystem, jointly established the LoRa Alliance with Actility, Cisco, IBM and other manufacturers in February 2015.

After more than three years of development, the LoRa Alliance now has more than 500 members worldwide and has deployed LoRa networks in more than 100 countries around the world, including the United States, Canada, Brazil, China, Russia, India, Malaysia, Singapore, etc. In China, Alibaba is an active promoter of LoRa technology. Now with the participation of Tencent, the development of LoRa technology in China will attract more attention.

Driven by the joint efforts of many LoRa Alliance members, the market development prospects of LoRa technology are also highly anticipated. According to data released by IHS Markit, at the beginning of 2018, the number of LoRa-based gateways deployed worldwide exceeded 70,000, and it is expected that the number of gateways will reach 200,000 by the beginning of 2019, and the number of terminal nodes will reach 80 million, with more than 40% expected to be LoRa-based devices. By 2025, the number of machine-to-machine connections worldwide will grow to 27 billion.

It is not difficult to see that LoRa technology has a broad market prospect. At the same time, it also makes people curious, among many emerging IoT technologies, what is the "charm" of LoRa technology that can stand out?

1. Outstanding technical advantages

First, from a technical perspective, compared to the NB-IoT solution, which has higher costs and energy consumption, users can complete the deployment of LoRa networks without relying on operators, which is not only faster but also cheaper. In closed areas such as residential areas, farms, and industrial parks, especially in indoor and underground environments where NB-IoT signals are weak, LoRa technology has obvious advantages.

Because of this "lightweight" construction advantage, the deployment of the LoRa solution is actually more extensive. At present, 350 cities in 41 countries including the United States, France, and South Korea have begun to use LoRa for network deployment pilots, and a total of 67 network operators are providing services.

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In addition, low cost is also an advantage of LoRa over NB-IoT technology. Although the development momentum of NB-IoT technology has been very strong in recent years, it still has great limitations in terms of cost. Although the price of NB-IoT modules is expected to drop to less than US$5 in the future, the price of chips that support the three standards of Bluetooth, Thread, and ZigBee is currently around US$2, and the price of chips that only support one of the standards is about US$1. The huge price gap will undoubtedly make companies worry about deploying NB-IoT, which has also prevented the NB-IoT market from developing rapidly.

Of course, LoRa technology also has a fatal disadvantage of being immobile, which also makes it impossible to achieve deep coverage. At this stage, NB-IoT technology, which emphasizes unified standards and ultra-high reliability, and LoRa technology, which pursues personalized deployment and meets scenario-based needs, are complementary. Some industry insiders believe that there is no absolute good or bad between the two technologies, each has its own advantages and disadvantages, but has different needs at different stages.

2. Diversified application scenarios

If simple deployment and low cost are one of the advantages of LoRa technology, then diverse application scenarios are another advantage that cannot be ignored. Currently, LoRa technology can be quickly and flexibly deployed in smart cities, smart water and electricity meters, smart parking lots, and industry and enterprise-specific applications.

LoRa technology has always been favored by government and enterprise users. Many government and enterprise users prefer independent and controllable private networks due to their business characteristics, and LoRa technology and LoRaWAN specifications have become the first choice for a large number of non-operator users in China due to their flexible and low-cost deployment advantages. For example, in underground water pipe network detection and comprehensive pipeline construction, LoRa sensors can be used to monitor anomalies, and LoRa technology has a very competitive advantage.

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• In terms of smart city applications, if there are smart street lights on both sides of the road, the usage of the bulbs can be transmitted through the LoRa network, and the relevant units can be notified in time for maintenance, repair and replacement of bulbs;
• In terms of smart parking lots, LoRa technology can save a lot of construction costs due to its flexible deployment. At the same time, a LoRa gateway can manage hundreds of LoRa sensors in parking spaces and monitor the use of parking spaces in real time.
• In terms of intelligent tracking, the battery life of the terminal is very important for tracking or positioning. Since the cost of the tracking system and the battery life must be taken into consideration, it is quite suitable to use LoRa technology for tracking;
• In terms of smart water and electricity meters, installing corresponding LoRa modules on water and electricity meters not only saves labor costs, but also allows remote and real-time monitoring of water and electricity consumption to avoid waste;

Of course, in addition to the many application scenarios mentioned above, LoRa technology can also be flexibly deployed in application fields such as smart agriculture and smart fire protection, and there will surely be more unexpected application scenarios to be developed in the future.

3. The industry ecosystem is huge

From a technical perspective, LoRa is a physical layer modulation technology that can be used in different protocols, such as LoRaWAN protocol, CLAA network protocol, LoRa private network protocol, and LoRa data transparent transmission. Depending on the protocol used, the final product and business form will also be different.

Among them, the LoRaWAN protocol is a low-power wide area network protocol promoted by the LoRa Alliance. At the same time, the LoRa Alliance has standardized LoRaWAN to ensure that LoRa networks in different countries are interoperable. So far, the LoRaWAN standard has established a complete ecological chain of "LoRa chips-modules-sensors-base stations or gateways-network services-application services".

LoRa chips are at the core of the entire industry chain, and their importance is self-evident. It is worth noting that Semtech is currently the core supplier of LoRa chips and holds the core patents of LoRa's underlying technology. Semtech's customers are mainly of two types: one is semiconductor companies that have obtained Semtech LoRa chip IP authorization; the other is manufacturers that directly use Semtech chips as SIP-level chips, including Microchip Technology (Microchip) and others.

According to conservative estimates by industry insiders, the annual sales of LoRa chips will exceed 100 million pieces in three years, and the LoRa application market will also attract much attention in three years. So what role do Internet giants such as Alibaba and Tencent play in this?

In March this year, Alibaba Cloud announced its full entry into the field of Internet of Things, with a full ecological layout from cloud to cloud, pipe, edge, and end. Optimistic about the prospects of wide area networks in unlicensed spectrum, Alibaba Cloud has developed the LinkWAN Internet of Things platform that supports the LoRa protocol, and can also provide a variety of LoRa products such as LoRa node devices and LoRa gateways. In addition, Alibaba's investment in chip companies such as ASR and C-Sky Micro is also very intriguing. In order to promote the expansion of LoRa in China, Alibaba has built LoRa networks in Hangzhou and Ningbo this year, and has met the conditions for commercial use.

Although it cannot be compared with Alibaba's comprehensive layout, Tencent's joining the LoRa Alliance has undoubtedly injected a "boost" into the industry. To support the further development of the LoRaWAN ecosystem, Tencent has announced plans to build a LoRaWAN network in Shenzhen with local partners to provide LoRaWAN integrated solutions from devices, edge to cloud for various IoT applications and end users (such as government public services).

At the end of last year, the Ministry of Industry and Information Technology issued the "Technical Requirements for Micro-Power Short-Range Radio Transmitter Equipment (Draft for Comments)", which temporarily made the commercial prospects of LoRa unclear. However, more than half a year later, LoRa has not disappeared, but has become more and more tenacious. Many big companies such as Alibaba, Tencent, China Unicom, China Media Group and Google have joined the LoRa camp. As the industry ecosystem continues to grow, its strength has become more and more not to be underestimated.

2. Operators prefer NB-IOT

The current IoT technology standard promoted by my country is NB-IoT. Major operators have invested heavily in this standard, especially China Telecom, which has taken the lead in the application of NB-IoT in China. NB-IoT and eMTC are both international standards, while the other two are private standards.

The biggest difference between the two is the spectrum, which is also the most valuable asset of these IoT connection standards. Simply put, owning the spectrum is equivalent to owning a legal parking space, and LoRa and Sigfox are inherently insufficient in this regard.

In recent years, Huawei has been promoting NB-IoT, and together with internationally renowned companies such as Qualcomm and Vodafone, officially proposed the concept of NB-IoT in 2015. In addition to Huawei, the three major operators also favor NB-IoT.

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Since NB-IoT is built by operators, unlike LoRa, which is built independently by enterprises, NB-IoT can be modified on the basis of the communication base station itself, and the network can be built with not too much work. Then the operator can control this data channel for charging, and increase the number of access terminals, which is beneficial both in terms of business performance and political achievements.

In this case, operators will of course actively promote NB-IoT.

More importantly, the government also strongly supports the development of NB-IoT, and the country has launched a number of relevant policies to support NB-IoT. For example, on June 16, 2017, the Ministry of Industry and Information Technology officially released the "Notice on Comprehensively Promoting the Construction and Development of Mobile Internet of Things (NB-IoT)", which clearly stated that 14 measures will be taken to comprehensively promote the construction and development of NB-IoT, and by 2020, 1.5 million NB-IoT base stations will be built and more than 600 million NB-IoT connections will be developed.

With government support from above, active deployment by operators in the middle, and strong support from Huawei from below, it is hard for NB-IoT not to be popular in China.

Advantages of NB-IoT

Currently, the NB-IoT standard has been frozen, and China has already entered the stage of large-scale commercial use. NB-IoT has four main features: wide coverage, low power consumption, large connections, and low cost.

• In terms of power consumption, NB-IoT sacrifices speed in exchange for lower power consumption. It adopts a simplified protocol and a more suitable design, which greatly improves the standby time of the terminal. For some NB terminals, the standby time is said to be up to 10 years.
• In terms of signal coverage, NB-IoT has better coverage capability (20dB gain), and even if the water meter is buried under the manhole cover, it will not affect signal reception and transmission.
• In terms of the number of connections, each cell can support 50,000 terminals.
• Cost is a major highlight of NB-IoT. The cost of communication modules is very low, and each module is expected to be less than 5 US dollars or even lower, which is conducive to large-scale purchase and use. According to Moore's Law, it can be concluded that within 40 months, the cost can be reduced to less than 1 US dollar.

Conclusion

In terms of NB-IoT, operators have more say. They build the network on behalf of the owners, so the owners do not need to worry about base station deployment. However, the network quality depends on the operators, which the owners cannot control. In addition, the data must pass through the operators. The owners need to connect with the operators to obtain business data, which has confidentiality issues and the business data is uncontrollable. On the other hand, NB-IoT can be modified based on existing base stations in China, so it is very easy to build a network.

LoRa is just the opposite. The owner (enterprise) can independently control the network quality and quickly optimize and supplement the network coverage. It can also operate independently, master the operation data in its own hands, and expand the network according to business needs, which is very free. However, the construction of LoRa base stations is quite troublesome. There are many troubles in selecting sites and powering base stations.

Powerful companies such as Tencent and Alibaba care more about freedom and control. The three major operators prefer the NB-IoT standard. After the standard is clarified, it will be more conducive to the prosperity of the industrial ecosystem. The mass production of terminal module chips will bring about price reductions, and the unification of platforms and applications will bring about a more focused development direction.