Everyone is focused this week on Mobile World Congress, whereas I am still trying comprehend the potential impact of the three announcements impacting Low Power WANs (LPWANs) from last week. Taken in isolation, these announcements are interesting. But by combining the messaging, the impact is transformative to the industry.
Telefónica have partnered with Sigfox, a leader in LPWAN technology, “to integrate Sigfox’s low power connectivity into the operator’s managed connectivity platform.” In other words, Telefónica will leverage Sigfox’s global networks (32 countries currently, 60 in 2018) and partner ecosystem to complement its own offering, which will eventually include Narrowband IoT (NB-IoT).
On the surface, this might not seem a big deal. However, it goes against the status quo for the vendors and service providers that back NB-IoT. These groups regularly claim NB-IoT is the only viable solution for LPWAN connectivity and discount alternatives like LoRa and Sigfox. Some forward looking mobile service providers (e.g. KPN, SK Telecom) have ignored this and deployed nationwide LoRa, however, Telefónica is the first to sign a global deal with Sigfox.
Tata Comms launched its MOVE platform to create “an access and usage agnostic, cross-border mobile experience for people and things.” Tata Comms has access to a global mobile network on the back of their partnerships with 900 mobile service providers across 240 countries. Tata Comms also took a 35% stake in IoT-solutions provider Teleena, an IoT connectivity specialist and mobile virtual network enabler.
The global reach of this offering is unprecedented. Sure, other service providers can offer global SIMs, but they don’t give the customer the choice to pick its preferred SIM-based or NB-IoT connectivity service provider by country. In addition, the platform is “access agnostic”, which means it “theoretically” could integrate LoRa or Sigfox into their platform (note: Tata Comms is in the process of launching LoRa in India). However, the most intriguing point is made when you combine this global scale with Teleena’s capability as a mobile virtual network enabler.
Tata Comms can now go to the market and say, “You pick the countries, the operators, and the network access technologies and we can manage if for you. Or, you can manage it yourself and we’ll help you set up your own MVNO”. If I am correct in my assumptions, this is groundbreaking.
Singapore’s Sigfox network operator (SNO) UnaBiz announced at their commercial launch that their lowest price IoT connectivity would cost only SGD 1.00 (USD 0.71) per year, with their highest tariff coming in at only SGD 12.00 (USD 8.52) per year. More coverage on the launch can be found in my blog post covering the launch.
This low price point comes in lower than the reported lowest price points we have seen in Europe, which were around EUR 1.00 (USD 1.06) per year. This not only will set the mark for LPWAN connectivity prices in Singapore, but also globally and across the alternative technologies of NB-IoT and LoRa.
What are the Positives?
Positive #1: Taking IoT solutions global just got easier
No customers start with global IoT initiatives, rather they initially deploy local and eventually take them global. These initiatives have been hindered by a lack of service provider offerings that meet their global requirements. The Telefónica/Sigfox and Tata Comms announcements increase the options while providing the flexibility to combine multiple access technologies into a single solution platform.
Positive #2: The Race to Zero (connectivity) cost is on
For governments and enterprise customers, this is great news. Lower connectivity costs mean lower OpEx costs and a lower total cost of ownership for IoT initiatives. In short, the IoT business case has just improved so we can now connect more things for less.
Positive #3: Choice is King
Each of the three primary LPWAN technologies (NB-IoT, LoRa, Sigfox) is backed by their own group of vendors and service providers. These groups have spent far too long telling the market that one network technology is better than the other. The truth is that there are use cases where each of these technologies would be the best option. The announcements from Telefónica/Sigfox and Tata Comms now give that choice to the customer.
What Questions does this raise for the IoT & LPWAN Industries?
Question #1: What does this mean for NB-IoT?
NB-IoT deployments were due to roll out in 2016, but now we only expect to see initial deployments in Q2 2017. This means we will only see wide scale NB-IoT deployments in 2018. That is a long way off for service providers keen to grab their share of the growing IoT market opportunity.
The Telefónica/Sigfox announcement does not mean that Telefónica will not deploy NB-IoT, but it could mean Telefónica needs to provide global IoT connectivity and solutions sooner rather than later. Will other service providers follow Telefónica’s lead and look to deploy LoRa or Sigfox in the near term? Will this impact their plans to deploy NB-IoT? And at what point do the service providers forego NB-IoT and turn their focus to 5G?
It will be interesting to see how this is addressed by the service providers as well as the NB-IoT technology backers, including Huawei, Nokia and Ericsson.
Question #2: What does this mean for Mobile Service Providers future revenues?
Service providers now need to re-consider what price points they think they can realistically charge for NB-IoT connectivity. The NB-IoT price points I have seen start at around USD 2 per month (USD 24 per year) per connection, or nearly 3x what UnaBiz is offering at their HIGH-end price point.
It should be obvious to the service providers that the future of IoT connectivity revenues are tentative at best. They need to focus their strategy on where the money is – the software and services components of the IoT market opportunity. Failure to do so will condemn them to a role as a bit part commodity supplier in a rapidly growing market.
Question #3: What does this mean for Sigfox global pricing?
A customer can purchase a connection from any Sigfox operator globally and use it in the other countries with a Sigfox network. I am not an expert on the pricing of each of Sigfox’s 32 operators, but I presume they will all need to adopt similar pricing or UnaBiz will become “operator of choice” for purchasing Sigfox connectivity globally.
Question #4: Who will be the IoT network service provider of the future?
The Tata Comms announcement has forced me to re-consider who could be an IoT network service provider. We tend to look to traditional mobile service providers, but few of these have been successful moving beyond selling connectivity and into selling solutions. Tata Comms gives others the option to compete in this space.
What if a global systems integrator became a global MVNO? They understand the concept of selling bundled solutions, the platform is access agnostic, and it could provide them with a price advantage over the competition for global deals.
Or, why couldn’t a global manufacturing company become their own global MVNO, linking up all their plants, logistics, users, etc. on their own network(s).
Then it hit me – what if a leading IT company took the leap into becoming a global IoT MVNO? One US-based disruptor, in particular, comes to mind. They already are at the forefront of consumer IoT solutions, carving their niche in the enterprise IoT space and a global leader in cloud, analytics and logistics. Now that would be very interesting…
I’ll be actively following the announcements at Mobile World Congress this week, but it would take a lot to top the impact of these three announcements from last week.