New Research Finds MNOs’ Hand Strengthened in LPWA Market

August 3, 2016

It appears considerably more probable that the low power wide area (LPWA) market would consolidate around the cellular-based standards, if compared to a scenario in which there would be a consolidation driven by dedicated LPWA technologies, according to new research from analyst house Machina Research.

The research, which analyses the developments of the LPWA market over the last six months, states that the likelihood of consolidation around cellular standards has grown from 25% (Q4 2015) to 35% – the joint most likely outcome in the LPWA market.

Machina’s conclusion is supported by a number of positive instances that demonstrate that LPWA technologies in licensed spectrum are set for significant growth. Machina point out that Vodafone’s commitment to start rolling out NB-IoT in early 2017 is a useful benchmark for the state of the NB-IoT market.  The operator also expects 85% of its LTE base stations to be software-upgradable and aims to have all of its LTE sites upgraded by 2020. U-blox’s unveiling of the first cellular NB-IoT module also lends more credibility to this particular LPWA technology.

Meanwhile, Machina anticipates that Cat-M1 could gain critical mass after being adopted by a series of operators including AT&T and Verizon. According to the research house, the flexibility of Cat-M1’s throughput means that it may prove a very versatile standard to deploy.

The research indicates that EC-GSM is set to see some degree of uptake amongst the MNOs that have a limited LTE coverage and do not have immediate plans to switch off their 2G networks. As such, certain operators in Africa, Eastern Europe, and the emerging parts of Asia may favour EC-GSM.

Perhaps the most significant factor in the rising prospects of cellular-based LPWA has been 3GGP’s decision to standardise three LPWA technologies: ‘The standardisation work at 3GPP has turned the tables in the LPWA space, in the sense that the players pushing dedicated (i.e. non-3GPP) LPWA technologies are now displaying a whole new sense of urgency, as they try to make most out of their time advantage. There is likely to be strategic space for a number of dedicated alternatives, but not all of them, so amongst the key players the race is now on to build up ecosystem-level scale and global relevance.’

Being supported by mobile network operators, LPWA solutions in licensed spectrum have unrivalled global network coverage. With their long history of providing connectivity, operators are also able to offer technical and business support to react to a customer’s changing needs. For more information on how the GSMA is supporting cellular LPWA, please click here.

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