analysys mason - the opportunity for lpwa solutions
TRANSCRIPT
RefNo | Commercial in confidence
The opportunity for LPWA solutions
Presentation
Tom Rebbeck, Michele Mackenzie & Nuno Afonso
February 2014
RefNo | Commercial in confidence
Analysys Mason has considerable experience in M2M and IoT both from
client projects and from our published material
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Country of interest
We developed forecasts of M2M device
connections and revenue for Brazil, the
Caribbean and Latin America region
(CALA) and worldwide
For a leading mobile operator, we identified and sized
quick-win opportunities in the international M2M market
and helped it develop its long-term M2M strategy
Development of a cost-benefit model for
operators and enterprises for Ericsson
We provided an assessment of M2M
market opportunity for a software vendor
For a Japanese operator, we
produced a report on the sales
channel for M2M/IoT services and
the role of MVNOs in Europe
Supporting a leading
mobile operator in
developing its strategy for
M2M and IoT services
Research on
M2M/IoT
international
opportunities for a
major European
operator
We assessed the regulatory implications
and regulatory feasibility for the
implementation of a new M2M service in
a dozen of countries
Industry research and quantitative analysis on
the global M2M market
White paper: Leadership and technology:
M2M insights for mobile network
operators
White paper: M2M transforms an
industry: evolution of heavy equipment
and dispersed assets
Overview of fleet
management in
five South-East
Asian countries
On behalf of a major regional
operator, Analysys Mason
conducted a workshop to assist
with M2M and IoT strategy
Client country
Examples of recent M2M client projects performed by Analysys Mason
We developed a list of
over 100 potential
partners, with key
information for each (e.g.
details of existing
contracts and
partnerships) for an
operator client On behalf of a major
European incumbent
operator, Analysys Mason
conducted a market
assessment of a new type
of sensor network.
We conducted a research study to
determine the level of demand for a
satellite M2M product and to
determine end-user requirements
for hardware and software
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Key messages
▪ Strong demand exists for Low Power Wide Area (LPWA) networks
▪ The supply side is more complicated, and is threatening to delay adoption
▪ For the full report, see:
http://www.analysysmason.com/Research/Content/Reports/Low-powered-wireless-
solutions-have-the-potential-to-increase-the-M2M-market-by-over-3-billion-connections/
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Contents
Demand
Supply
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Low cost
No mains
power
source
required
Strong
propagation
“Working with current M2M customers, we realised that there are
more potential customers for a solution that has a low-cost
module, doesn’t need a power source - it has to work with no
power supply - and can be connected deep indoors.”
Cédric Levasseur
Network Chief Architect
Bouygues Telecom
Characteristics of LPWA
LPWA networks open new market opportunities for three main reasons
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We believe that the total addressable market for LPWA services may be
close to 14 billion devices by 2023
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Total addressable market and forecast of LPWA opportunity and connections, worldwide, 2013–2023
[Source: Analysys Mason, 2014]
0
2
4
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10
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142
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3
201
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201
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Co
nn
ectio
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bill
ion
s)
Total addressable market Forecast of LPWA connections
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Compared to the overall IoT market, LPWA will represent over 10% of all
connected devices by 2023
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Number of connected devices, 2023
[Source: Analysys Mason, 2014]
Total IoT/M2M market
Connected devices
20 billion+
LPWA market
Connected devices:
3.1 billion
Connectivity revenue:
USD10.7 billion
Traditional cellular M2M
market
Connected devices:
1.4 billion
Connectivity revenue:
USD44.8 billion
“The most massive uses of M2M are still to be unlocked. The existing network
technology is not adequate for them.”
Juan Campillo, Investment Manager, Chief Commercial Digital Office
(Telefónica)
RefNo | Commercial in confidence
We believe that no specific vertical sector will dominate the opportunity
for LPWA services, unlike with traditional cellular M2M market
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Forecast for LPWA connections
[Source: Analysys Mason, 2014]
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.52
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2016
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Con
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ctio
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bill
ion
s)
Industrial
Consumer
Utilities
Smart buildings
Smart cities
Agriculture and environment
Logistics
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LPWA is well suited for applications that cannot support the price of
cellular modems or connectivity and only need limited bandwidth
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Comparison of market for LPWA and traditional cellular, 2023
[Source: Analysys Mason, 2014]
0.0
0.5
1.0
1.5
2.0
2.5
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4.5
LPWA Cellular
Con
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ctio
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bill
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Unique LPWA connections Overlap Unique cellular connections
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We expect LPWA services to generate more than USD10 billion per year
globally in connectivity revenues alone
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Forecast of connectivity revenues from LPWA services
[Source: Analysys Mason, 2014]
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4
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2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
US
D b
illio
ns
USD34 billion accumulated connectivity
revenue by 2023
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Vertical sector Connections Connectivity
revenues
Example applications
Smart buildings 780 million USD1.4 billion Smoke alarms, white goods
Agriculture and
environment
739 million USD4.6 billion Land monitoring, livestock monitoring,
forest monitoring
Utilities 553 million USD1.4 billion Water and gas meters, sewage pipeline
Consumer 390 million USD1.4 billion Bicycles, pets
Logistics 300 million USD780 million Container tracking, refillable tanks and
bottles
Smart cities 270 million USD740 million Street lighting, parking, waste
management
Industrial 95 million USD630 million Indoor asset tracking, pipeline monitoring
All 3.1 billion USD10.7 billion
Connections and connectivity revenue by vertical sector in 2023
[Source: Analysys Mason, 2014]
Demand for LPWA networks, at least initially, will come from enterprise
rather than consumer applications
RefNo | Commercial in confidence
Summary of the main points on LPWA demand
▪ Total addressable market for LPWA services is close to 14 billion devices by 2023
▪ LPWA can add 3 billion connections by 2023, and generate more than USD10 billion globally in connectivity
revenues alone
▪ LPWA connections are largely incremental to the traditional cellular market as it mainly enables services that
otherwise would not be feasible
▪ No specific vertical sector will dominate the opportunity for LPWA services, unlike with traditional cellular M2M
market
▪ The benefits of the ideal LPWA network, such as the low cost per module, can only be achieved with the
existence of a strong ecosystem
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Contents
Demand
Supply
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Industry needs consensus on which technology to support
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Characteristics of an ideal LPWA network [Source: Analysys Mason, 2014]
“LPWA needs to be easy to integrate with the existing cellular deployments and allow us
to manage a single multipurpose network.”
Juan Campillo, Investment Manager, Chief Commercial Digital Office (Telefónica)
Elements Description
Spectrum • Low frequency (<1GHz), to support strong propagation
• Licensed, to support some degree of service level assurance
Transmission • Can be low bandwidth and high latency. High coverage and low power are
more important
Propagation • Very strong. Able to reach terminals underground
Module battery life • Long. Modules are expected to last 10 years on one AA battery
Module power
consumption • Low
Module cost • Low. Below USD5
Scalability • Able to support billions of devices on the network
Wireless
technology
• Compatible with existing cellular network infrastructure to reduce roll-out costs
and complexity
• Standardised to enable economies of scale
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No standard has gained critical mass and this may be damaging growth
▪ Unlicensed spectrum
▪ Some commercial launches
▪ Available now (e.g. Sigfox, Semtech,
Onramp)
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▪ Licensed spectrum
▪ Some pilot launches
▪ Available 2017?
▪ Options include:
– LTE-MTC (supported by Qualcomm,
Nokia, Ericsson)
– Variants of GSM
– Clean-Slate (Huawei/Neul)
Proprietary standards Open standards
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Contact details
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Tom Rebbeck
Research Director
Cambridge
Tel: +44 (0)1223 460600
Fax: +44 (0)1223 460866
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