The convergence of 5G SA deployments and private networks are set to finally unleash the IoT market

The convergence of 5G SA deployments and private networks are set to finally unleash the IoT market

A new study by Yole Développement predicts the convergence of a perfect storm of conditions that will finally drive significant growth in IoT over the next two years.

Cellular IoT is set to benefit from 5G deployments in both public and private networks (on private and public frequencies), which will push the market value to over $700 million over the next three years. That’s according to a new report from French analyst house, Yole Développement[1].

By then, the market will comprise of two distinct categories: low-volume, high-cost modules for 5G; and high-volume, low-cost devices for NB-IoT and LTE-M applications.

Multiple approaches have been tried in the past to develop IoT, using unlicensed frequencies, through protocols such as IEEE802.15.4-based Zigbee or Z-Wave, the LoRaWAN and Sigfox protocols, or long-range Wi-Fi.

But this has not been a success, mainly due to the general requirement for data reliability and security, which can be defined as confidentiality, integrity, and availability. But this is now changing with cellular protocols aimed specifically at IoT, says the report.

New IoT-focused cellular protocols enable IoT uptake

These cellular protocols range from the low data rate NB-IoT to the very high data rate, high reliability, low latency 5G Cat20. The latter has finally started to see traction from the industry.

As a result, Yole’s analysis predicts the increasing use of cellular IoT between now and 2023 as worldwide deployments of Standalone (SA) 5G public networks continue to grow, which will increasingly bring IoT-dedicated network slicing to the table.

At the same time, Yole sees the growth of private networks as a further driver to IoT growth. Today, it says, such deployments are aimed at high-value applications and often at a pilot level. But, as more private networks (PNs) are deployed (using both private and public radio frequencies), PNs are expected to be used for lower value IoT applications, especially those using LTE-M or future NR-Light protocols. As noted, a mix of technologies will result, with different approaches being more suited to different applications.

 yole developpement

Source: Yole Développement

Indeed, its forecast for strong IoT growth in the next few years is based on the conjunction of a number of events: increased SA 5G public deployments (which will bring IoT-dedicated network slicing); the growth and development of private networks; and, lastly, the introduction of cheaper RF modules, which today are expensive and only produced by a handful of manufacturers. “The IoT industry needs this diversification and strengthening of supply,” notes the report.

The democratisation of IoT

But, once greater adoption of cellular IoT takes off, this will result in ‘democratisation’ of IoT, which will be followed by industrial consolidation in the longer term, and ubiquitous use of the licensed radio frequencies for non-consumer purposes. 

“Cellular deployment is expensive, either on a capital expenditure standpoint for private networks or an operating expenditure standpoint when using public networks. But 5G offers unprecedented capabilities in terms of data security, creating a market opportunity for critical applications. These are niche applications, for example, in highly automated industrial environments, where wireless connectivity adds a lot of value,” notes Cédric Malaquin, Technology & Market Analyst, RF Devices & Technology at Yole, and author of the study.

He adds: “Other applications range from machine vision to autonomous guided vehicle monitoring. They are now motivating investment in 5G deployments, thus opening the market for all other cellular-based deployments to come.” 

As a result, Yole predicts that market volume will reach 900 million devices by 2026 – this started in 2020 with a volume of 298 million units driven by the replacement of 2G/3G devices like points of sale or telematics, it says. 

But stay realistic about true IoT numbers

However, it adds a note of caution: these volumes are still far from the billions of industrial-connected devices anticipated by technology companies several years back. This is mostly due to the niche nature of IoT applications. But it will still represent a significant market opportunity.

It seems that 5G is finally set to unlock the potential of the IoT industry, which until now has largely succeeded at the niche-application level. However, with 5G network slicing mainly dedicated to IoT, there should be a lot more movement in the IoT industry. Furthermore, regulators are opening frequencies for private networks that can be directly licensed by companies (as well as the use of public SA 5G networks).

Finally, with new RF connectivity modules also being developed it seems that the long-awaited growth in IoT could be just around the corner, as a number of driving factors look set to collide over the next two or three years.

 

[1] http://www.yole.fr/5G_mMTC_And_IoT_Platforms_Technology_Market_Trends_2021.aspx

See some recent work Our Portfolio

Our portfolio spans international and national markets, serving customers from around the world - ranging from startups to globally established businesses with operations in multiple countries. Take a look at some of our recent projects.

From our BlogLatestBlog Post

  • BT’s patronising stance on Open RAN really does no one any credit

    Apologies in advance to our many highly-valued international readers, but this post definitely needs a Union Jack running over it. We’ll start by telling you why, quoting the body that works on behalf of the Queen to protect our national cyber security:

    Read more

  • Layer upon layer: why re-using existing infrastructure just makes so much fibre sense

    For thousands of years, and probably from not long after the end of the last Ice Age 12,000 years ago, a major track connected the Celts in the far South with their cousins in the North. By the time of the Roman Conquest, the British were still using this route; recognising its utility, legionnaires soon paved it and called it Ermine Street, using it to connect their capital, Londinium, with their far-off bases in Lincoln (Lindum Colonia) and York (Eboracum). Later, the English called it the Old North Road; and our A1 largely follows the same route. That’s continuity in infrastructure for you.

    Read more

  • Italy’s trying to go back to the future to get universal broadband. We don’t think it’ll work

    One broadband operatore to rule them all? Rome’s attempt to build a national broadband service in a day. Reports on possible Italian state intervention raises less than comfortable memories of Blunders down Under and under-priced manifesto offers.

    Read more