Summary Bullets:
• Verizon and Ericsson announced successful trials of NB-IoT with plans to launch nationwide NB-IoT by the end of the year.
• Given the different use cases for LTE-M and NB-IoT, a dual-buildout strategy makes sense. However, with NB-IoT more widely deployed, Verizon’s decision to build out NB-IoT also enables it to hedge its bets in the event that an LTE-M ecosystem doesn’t emerge.
Verizon announced February 1 it will deploy NB-IoT technology across its network in 2018 after successful trials with Ericsson. The announcement represented an acceleration from previous plans which called for NB-IoT trials this year. The move was no doubt a competitive response to T-Mobile USA’s accelerated deployment plans, but there may have been other rationale that played into Verizon’s plans.
To simplify, there are essentially two current ways forward in terms of the migration path for LTE-based IoT technology: LTE-M (a.k.a. Cat-M1) and NB-IoT. AT&T and Verizon both initially deployed LTE-M, while many operators in Europe and especially Asia are deploying NB-IoT. In both Asia and Europe, a significant majority of network builds and trials have been for NB-IoT with a relative handful of LTE-M commitments.
Both technologies have their strengths. LTE-M is arguably better suited to operators because it has features that NB-IoT doesn’t, including support for mobility (NB-IoT deployments are stationary), making it more suitable for connected cars and applications that involve a human like wearables. LTE-M also offers voice connectivity and supports higher bandwidth, meaning clever developers could potentially build more interesting applications that involve voice commands or video.
But NB-IoT provides a compelling option for deployments in which tiny amounts of data may be required from thousands of sensors, such as in agricultural or smart utility metering use cases as well as a variety of smart cities applications involving lighting, parking meters, smart buildings and the like. Chinese operators have been the most active deployers of NB-IoT thus far but a lot of European operators are also deploying to take advantage of NB-IoT’s massive scalability.
Returning to the U.S. market, T-Mobile USA put a monkey wrench in the market (big surprise!) when it announced it had completed live NB-IoT smart city trials in Las Vegas in July 2017 in advance of a planned national launch by the end of 2018. That prompted Verizon – which already had said it would be completing NB-IoT trials in 2018 – to speed up its timeframe with the announcement February 1 that it would deploy commercially nationwide by the end of the year. T-Mobile has also said it will deploy LTE-M beginning this year. The dual deployment plans by both Verizon and T-Mobile USA help establish the case that end users need “the right tool for the job”; given the different use cases for LTE-M and NB-IoT it makes complete sense that operators would plan to deploy both. And with both operators committed to both technologies, it seems highly likely that AT&T, which also has deployed LTE-M nationwide, will join Verizon in committing to building out NB-IoT in the near future.
The larger question that has yet to be determined in the longer term is whether there is a market for both technologies, despite their different use cases. Thus far, while LTE-M has been adopted by AT&T and Verizon and has the support of a handful of European operators including Orange, Telefónica and KPN, NB-IoT has already been launched in over 25 networks and appears to be thriving. Thus, the decision by Verizon to accelerate NB-IoT deployment could also be seen as a hedge against the possibility that the ecosystem of suppliers and developers necessary for LTE-M to gain traction never materializes. With very little news being heard around LTE-M so far, 2018 could be a make or break year for the technology.