Editor’s note: Advances in radio interface technology will enable network operators to open up a vast tranche of new spectrum to carry network traffic and thus help drive Internet of Things growth, report Technology Business Research analysts who recently attended a forum on the emergence of 5G technology. This is the second of two reports.
HAMPTON, N.H. – 5G will provide the foundation for next-generation IoT
While the IoT market will not wait for standards-based 5G once it comes to fruition in 2020, the technology will provide high-bandwidth, low latency machine-to-machine communication, which will be critical for precise IoT. 5G’s connectivity potential is becoming important as bandwidth and latency needs are heightened due to the emergence of more numerous and complex use cases. Also, as the market moves closer to centralized analytics, it will call for connectivity solutions that can handle the densification of data on the network.
Examples of precise IoT include autonomous vehicles, which will need immediate instruction and correction while in operation, or other use cases, such as safety in smart cities or exception monitoring in smart health, all of which require low latency and drive 5G demand. However, the need for precise connectivity can also be seen in less obvious verticals such as manufacturing. For example, the lack of immediate correction for a robotic arm on a manufacturing line, delivered from instruction from a centralized IoT solution, could lead to a damaged product, delayed time to market or human harm.
Until standards-based 5G is released, LTE-M and NB-IoT, both approved by the 3GPP, will be leveraged as the workhorse standards for IoT. NB-IoT, which is about one year behind LTE-M, will provide substantial reach, including significant penetration of buildings or subterranean locations, and extremely low battery use, allowing a sensor to be unmaintained for up to 10 years. However, NB-IoT only delivers one-way communication. LTE-M offers similar features, though to a lesser degree, but allows two-way communication and over-the-air updates.
This makes LTE-M a powerful standard as operators move to software-defined gateways maintained and updated remotely. LTE-M will be a software update to existing infrastructure for most carriers, making it relatively painless to implement. TBR believes LTE-M will last long into 5G’s emergence due to the latter’s relatively high initial cost and infrastructure build-out.
CALA must work through a number of challenges before IoT becomes commonplace
CALA’s largest roadblock to IoT will be challenges in proliferating LTE and other connectivity advancements. Connectivity is central to IoT, and without a mature infrastructure base supporting it, the ability for enterprises in the region to connect things to centralized analytics is hampered. As of 1Q16, average LTE penetration in CALA was only 11.35%. The lag in connectivity technologies in the region stems from challenging macroeconomic conditions; lagging technology policy; the varied regulations across the many countries within the region, making unified networks difficult; and governments increasing tariffs on spectrum prices, making connectivity build-outs less profitable.
Despite these challenges, some governments in CALA are realizing they need to increase global commercial competitiveness, especially as technology from North America begins to spill over, and connectivity build-outs form the backbone for regional advancement. Most of the initial connectivity innovation in CALA will stem from “public-private partnerships” where governments offer support and discounts for private company infrastructure build-outs in return for private sector support in public verticals.
For example, private companies will implement connectivity and IoT solutions in public use cases such as safety, water management or education in return for government support. Due to this, unlike in North America where private industry use cases are setting the example for public sector IoT, in Latin America public sector IoT deployments will lay the foundation for the expansion of IoT into the private sector. TBR believes the governments of Mexico, Brazil, Peru and Colombia will drive IoT investment in the region. The advancements in these countries are likely to spill over into, or encourage, neighboring countries.
Though 5G dominates the conversation, LTE has been and will continue to play a key role in the networks of the future. New innovations in the LTE standard will keep the technology relevant as operators overlay 5G and undergo transformation to bring new business models to market. The key challenge going forward is ensuring sufficient spectrum is allocated to support these transformations, which is an issue 5G Americas, in conjunction with other industry stakeholders, will continue to tackle.