Accelerating 5G: Leveraging IoT to Create Digital Industries

Peter Jarich

Peter Jarich – VP, Consumer Services and Service Provider Infrastructure

Summary Bullets:

  • While the core use cases for 5G are well understood (enhanced mobile broadband, massive IoT, mission critical communications), it’s important to remember that a core objective of those use cases is enabling digital industries – helping service providers target vertical markets and not just broad swaths of consumers and enterprises.
  • Initial 5G specifications may be focused on enabling enhanced mobile broadband, but we’re already seeing how digital transformation will unfold thanks to LTE technologies like Cat-M and NB-IoT.

Today’s discussions of 5G, more often than not, focus on the core use cases promised by the technology and the new services they will enable.  Where early messaging scrambled to define 5G objectives broadly, narrowing them down is a welcome development, if only to ensure a common understanding of what 5G will focus on: enhanced mobile broadband (eMBB), massive IoT (massive machine type communications – MTC), mission-critical communications (ultra-reliable low-latency communications, URLLC).

Just as important as the “what” of 5G, however, is the “who” – the new industries and industry participants 5G will enable.  For operators looking to grow their revenue base, a focus on digital industries is logical.  For enterprises looking to transform themselves via the adoption of digital innovations, a focus on 5G is just as logical.  And, as nations look to enable larger digital efficiencies and digital inclusion, a transformative vision of 5G as more than just a set of use cases is critical.

To be sure, the primary focus of initial R15 5G specifications is eMBB.  And while that will help to support high-performance IoT use cases, we’re already getting a view into how 5G might support massive IoT and transform a broader set of industries thanks to the commercialization of Cat-M and NB-IoT.

The 2017 Story

Last month, as Mobile World Congress Shanghai kicked off, the GSMA announced the success of its Mobile IoT Initiative, claiming nearly 75 operators supporting its Cat-M and NB-IoT efforts and 500 members in its Mobile IoT Innovators program.  The release had a singular purpose: to highlight the momentum behind LTE-based LPWA technologies.  It aligned well with news from the GSA earlier in the year that it expects 25 commercial NB-IoT to be built by year-end, with nearly 20 vendors actively engaged in building R13-based IoT chipsets or modules.

In other words, the writing is on the wall: while NB-IoT and Cat-M specifications were established last year, this is the year for commercialization to take hold.

Missing in this conversation, however, is the “why” of NB-IoT and Cat-M.  Neither is an innovation being deployed simply for innovation’s sake.  Instead, in the run-up to 5G-based IoT (think 2022 and beyond), LTE-based LPWAN technologies represent a foundation for delivering on 5G’s promise of digital industry transformation.

While it’s still early in the life of these technologies, there’s no shortage of examples of the way in which they can transform industries in the here and now, and going forward.  Connected and optimized agricultural operations.  Connected healthcare benefitting from realtime feedback and big data analytics.  Connected retail operations, potentially even taking advantage of the voice capabilities in LTE-M.  A dizzying array of smart cities use cases – lighting, parking meters, smart buildings, utilities – have been talked about for years.  Some of these are already moving forward with standard LTE and other technologies.  So, what’s the change with NB-IoT and LTE-M?  The cost structure.  Thanks to lower device complexity, longer battery life (requiring less frequent device replacement) and deeper coverage as well as higher device density (allowing reuse of existing LTE networks vs. new builds for specific use cases), both technologies promise less expensive solutions.  Higher cost IoT solutions (particularly where overall cost is driven by the cost of the devices) may be justified by high-value, high-performance use cases, but will leave many others out of reach.  If LTE-M and NB-IoT can bring down the costs of IoT (while still benefitting from the scale and operations of mobile networks), deployments can be scaled to a broader set of use cases – opening up room for innovation in the process.

As operators and vendors attempt to one-up each other over 5G milestones, the fact remains that 5G – in large part thanks to IoT use cases – aims to transform and enable digital industries.  The 2017 story, then, is not about the technologies turning that into a reality in the near-term, but the way in which they were doing it and the example they’re setting for when 5G IoT arrives.

What Next?

Across the technologies we’ve discussed as building a foundation for 5G going forward, there have been two clear themes for what comes next: technology evolution and business model prototyping.  Support for digital industry transformation via NB-IoT and Cat-M is no different.

From a technology perspective, Cat-M and NB-IoT will evolve beyond today’s R13 solutions.  We’ll see multicast (helpful for firmware updates or alerts) along with TDD and unlicensed spectrum support to address the demands and spectrum assets of diverse markets.  And, of course, we’ll eventually see 5G supporting IoT whether that means high-performance use cases in the near-term or narrowband 5G NR in the longer-term.

But if the evolution of cellular IoT technologies is well understood, the way ecosystems and business models will develop around them remains a question mark.  That makes two things critical to their success in supporting digital transformations.  First, device ecosystem development.  After all, only a wide range of devices and modules will fuel new use case innovation and the scale needed to execute on the promise of cost efficiency.  Second, business model education and experimentation. It is fair to position innovation as equal parts creativity, necessity, copying and iteration.  Against this backdrop, key to executing on the promise of Cat-M and NB-IoT are deployments which highlight how the technologies can be used and improved upon.  Going forward, that includes use cases benefitting from LTE enhancements: drone connectivity, ultra-low latency and public safety use cases, cellular vehicle-to-everything. Luckily, this looks to be the year we begin to see those initial examples registering.

About Peter Jarich
Peter is Vice President for the Current Analysis Consumer and Infrastructure services. Peter and his analyst team monitor and evaluate activities in the markets for Consumer Services and Devices, Digital Media, Fixed Access, IP Services, Mobile Access, and Transport and Routing Infrastructure, Telecom Vendor Services, and overall coverage of the Mobile Ecosystem.

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