Vodafone’s commitment to NB-IoT will help all parts of the ecosystem

On 19 October, Vodafone announced that it would launch NB-IoT, a low power network aimed at devices like smart meters, in four European markets (Germany, Ireland, the Netherlands and Spain) in Q1 2017. Vodafone also committed to rolling out the network standard across all of its countries by 2020. Here are some thoughts on the news:

  • It is a smart move that will push the entire NB-IoT ‘ecosystem’. By committing to this date, Vodafone has sent a strong message to its competitors, but also makes a powerful commitment to the technology which will help players in different parts of the value chain, from chipset designers to application developers. This announcement will encourage others to invest in NB-IoT, which will help all parts of the ecosystem.
  • The addressable market for NB-IoT is considerable. Analysys Mason forecasts that by 2025 there will be over 3 billion connected devices on LPWA networks, generating total revenues of around USD70 billion, of which connectivity revenues will be around USD5 billion. As connectivity revenues are such a small share, Vodafone has a clear incentive to explore its role in other parts of the value chain
  • It is an aggressive timetable but probably not unrealistic. For most of its networks, Vodafone has said that the rollout will require just a software upgrade (i.e. no site visit is required). From its trials in Spain and elsewhere, Vodafone is also clearly satisfied with the performance of the technology. The issues it faces now are probably as much commercial (e.g. agreeing the licensing terms) as they are technical.
  • Vodafone will want its partners, and not just its own networks, to launch NB-IoT. Part of Vodafone’s success in winning major IoT contracts (e.g. GM, VW) using traditional cellular has been due to it offering seamless regional coverage. It will want to do the same with NB-IoT but this will depend on partner networks also investing in NB-IoT.
  • Do not rule out LoRa. The news from Vodafone puts pressure on technologies that compete with NB-IoT, such as LoRa, SIGFOX and Ingenu. LoRa in particular is looking robust though. In recent weeks, Softbank in Japan and Comcast in the US have announced plans for LoRa networks, and others with LoRa networks (e.g. Orange in France, Tata Communications in India) are aggressively exploring its potential. To give a sense of scale of LoRa now has the support of mobile operators with approaching 200 million cellular subscribers.