Mobile World Congress this year was all about M2M, or IoT, depending on your preference. Going back just 5 years, at this major industry event the main talk was of smartphones, 3D screens, 4G technology and tablets. M2M, as it was then, was an afterthought. But an afterthought no more. At the event in 2015, as attended by 93,000 people, the main talk was about IoT. Companies that previously no-one would have considered as having much association suddenly needed to bolt on IoT onto its messaging. So there is hype, which is somewhat unfortunate as it masks what was a very interesting event for IoT. More importantly there was continued and significant evolution in the building block of IoT, in particular in terms of reducing cost, complexity and other barriers to entry.
As an aside, at Machina Research we have a very specific distinction between the M2M and IoT, but for most in the industry the term is being used interchangeably. This is fine in the context of Mobile World Congress as what everyone is talking about there is the communications piece of the equation which, whether it be M2M or IoT, is much the same.
The most eye-catching discussions and announcements related to some of the Low Power Wide Area (LPWA) network technologies. There were some high profile announcements around LoRa (which is based on a technology developed by Semtech) and there seems to be momentum growing around that as a technology. At the same time Huawei (based on the technology of its Neul acquisition from late last year) is firming up Cellular IoT (CIoT) technology in conjunction with Vodafone. And another operator partner, in the form of Tele2 in the Netherlands, was announced for Sigfox, the third serious player in this field. Sigfox, interestingly recently scored EUR100 million in funding from the likes of NTT Docomo, SK Telecom and Telefonica. Of course other technologies may emerge, but those three seem to be competing head-to-head for dominance.
The motivation for using these technologies is clear: they’re cheap. The connectivity modules have the potential to be an order of magnitude cheaper than traditional cellular devices. The operators of traditional cellular networks also seem to be adopting these technologies either in the true belief of the opportunity, or as a defensive measure against competitors who may do the same. Either way, these networks are going to be rolled out very quickly.
Having said that LPWA will be an order of magnitude cheaper than cellular, it must be noted that a lot of work (and a lot of focus at Mobile World Congress) is going into LTE-M (or LTE-MTC, LTE Cat.0, depending on your preferred term) to develop a long term low-cost future-proof cellular technology for the Internet of Things. The focus is hardly surprising given that this is a trade show aimed at the mobile industry.
So, with new access technologies and a refocus of 3GPP to be more IoT-friendly, the barriers to IoT adoption continue to fall. And it’s not just on the RAN. The other major theme that emerged from the show was that cost of platforms to support IoT deployments will also fall rapidly. There weren’t particularly any announcements at the show that were eye-catching, but many of the discussions were around the platform landscape. Across the connectivity support and application enablement platforms, there was a prevailing trend of falling barriers to entry. To take a few examples, Vodafone in 2014 announced that it would be licensing its GDSP platform to other operators as a way to extend global reach. This is not particularly to raise revenue, but simply to improve its (already market leading) global coverage. The approach is a simple one: don’t seek to charge for software, but use it to achieve broader company aims; in this case adding partners in far flung countries. A similar approach permeates PTC’s costly acquisition of ThingWorx: selling software as a standalone is challenging, so use it to sell a range of other, more profitable services. The other upshot is that the cost of the software element, be it for connectivity support or application enablement, falls in cost.
Mobile World Congress this year was, first and foremost, about IoT. Smart watches and other wearables were prominent, but this wasn’t the really interesting news. That related to the falling cost of entry. The above are just a few areas in which the barriers to entry for IoT are falling. There were more. For instance, Network Function Virtualisation (NFV) promises to reduce the cost of core infrastructure and remove the need for dedicated infrastructure to support M2M deployments. Also the GSM Association continues to support the creation of a common platform for remote provisioning and SIM localisation that helps drive out complexity for developers. All of these promise to help lower the floor for IoT implementations and speed adoption, setting the tone for what should be a buoyant 2015…
