LPWA: Challenger operators could benefit from using a different technology to that of the market leader

By Zenobia Hegde

Mobile operators have a significant opportunity to offer LPWA solutions, but competition will be intense. The leaders have decided which technology to support – for example, AT&T has opted for LTE-M, Orange uses LoRa and LTE-M and Vodafone has gone for NB-IoT.Many other operators, especially smaller ones, have yet to make a firm commitment, but some challenger operators are planning to deploy different technologies to the market leaders. This article, based on our detailed report on approaches to LPWA, examines the options they face and the factors that will affect their decisions.

For the traditional mass-market smartphone opportunity, the technology upgrade path, through flavours of 2G, 3G and 4G, was clear. IoT is a new market and the old rules do not always apply. There are clear benefits for operators willing to take a risk on an alternative strategy from the leaders. This article examines the options they face and the factors that will affect their decisions, says Michele Mackenzie, principal analyst and Tom Rebbeck, research director, Enterprise & IoT at Analysys Mason.

Operators have three main approaches to LPWA technology choice

Mobile operators have three main options to consider when choosing an LPWA technology. They are as follows.

Follow the leader: The challenger operator chooses the same technology as the market leader. For example, if the leading operator is launching LTE-M then the challenger would do the same.
Choose an alternative to the leader: The challenger operator chooses a different technology to that of the market leader. For example, if the leader chooses LTE-M then the challenger will deploy NB-IoT.
Wait and see: The challenger operator waits for a winning technology to emerge before committing.

With LPWA, challenger operators have an opportunity to differentiate. Figure 1 illustrates some of the technology choices that leading and challenger operators have made. There is currently no clear trend on the approach that challenger operators are taking; some follow the leader, others do not.

Figure 1: Selected operator/markets LPWA technology choices

Some of the advantages for challenger operators to deploy a different LPWA technology are as follows.

The alternative technology will be better suited to particular use cases. It is uncertain how large the differences between NB-IoT and LTE-M will be in terms of price and performance, but if NB-IoT does have clear price advantages or longer battery life than LTE-M, it will be more attractive for some applications such as metering. This could benefit T-Mobile USA. Moreover, challenger operators could benefit enormously if their chosen technology is used for a mass-market proposition. For example, if LTE-M is used by a future Apple Watch, KPN would be in a strong position in the Dutch market compared with its competitors, T-Mobile and Vodafone, which are focused on NB-IoT.
An alternative technology could open up the enterprise market. Most challenger operators have a limited presence in the enterprise market. An alternative technology with clearly differentiated performance could help open new enterprise opportunities.
It should reduce competition based purely on price. If all three/four operators offer the same network technology and coverage, strong price competition will be inevitable. Different technology […]

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Posted on: December 7, 2017

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