The IoT in 2017
IoT services are in a race to get the economies of scale needed for commerical viability
Thomas Friedman’s book Thank You for Being Late suggests that the accelerated pace of technological change is getting fast enough to make new technologies obsolete before they have had a chance to cause much disruption. Anyone involved in deploying the Internet of Things (IoT) in Europe will be mindful of this dilemma – as 2017 continues the trend of the technology striving to get properly off the drawing board.
Consensus and compatibility for IoT communications remain a sticking point. Rather than a single seamless wireless network based on common protocols, multiple standards have emerged that have been rolling out gradually and patchily. There’s understandable concern from industry that they will start to show their age before they have had an opportunity to show what they can do.
Mobile network operators (MNOs) such as Vodafone and Ericsson are racing to introduce their IoT communications products over the top of existing licensed wireless network infrastructure, while companies with solutions that use unlicensed spectrum have been building out their services across territorial markets using local partners. All parties know that, unlike with traditional tariffed mobile services, IoT applications can only be commercially viable if they can quickly achieve massively wide-scale utilisation.
Some industry watchers insist that IoT connectivity will be the most important factor directing this market over the coming 12 months. “There’s no doubt that mobile IoT technologies like LTE-M, NB-IoT, and EC-GSM-IoT will have an increasing impact on the IoT market in 2017,” says Robin Duke-Woolley, CEO at Beecham Research. “These form part of what’s collectively termed LPWA [low power wide area], which also includes technologies that use unlicensed spectrum – such as LoRa, SigFox, and Ingenu. Increasing availability of these, at lower cost than traditional wide-area connectivity options, will open up new areas of possible applications.”
For Macario Namie, Cisco Jasper’s head of IoT strategy, high user volumes are unattainable without significant network coverage. “Coverage is king – without it no other feature matters,” he explains. “With both NB-IoT and LTE-M operators can deploy instant nationwide coverage with a software upgrade. That’s what [drives the belief] that licensed LPWA technologies will win in the public network market.”
The expense of rolling out a new network to support the IoT would be prohibitive to wide-scale deployment, so “a software-only upgrade to an existing network is a key factor to its success,” agrees Stamatis Georgoulis, senior director of product management at Cobham Wireless. “2017’s IoT technology and applications will be advancements on the network trials and deployments we’ve already seen. We will see the deployment of managed spectrum IoT technologies like NB-IoT and LTE-M, where quality of service, spectrum efficiency, security, and wide geographical coverage can be achieved or supported by MNOs using current network infrastructures.”
But while the contesting mobile IoT technologies may have tremendous potential, says Duke-Woolley, it takes MNOs into a different market than what they are used to. “Adjusting to the lower average revenue per user of M2M and standard IoT connections compared with mobile phone tariffs is a challenge [for MNOs],” he explains. “The user revenues being proposed for mobile IoT are lower still. The only way that business makes sense for MNOs is to have spectacular volumes. The burning question is: how is that achieved with the highly diverse set of IoT applications being proposed? Can MNOs make mobile IoT technologies actually pay off?”
So we’re left with a chicken and egg scenario similar to those MNOs have faced before. Nick Allott, CEO at NquiringMinds, says MNOs have two things in their favour that will come to the fore in 2017: “They can run a service and basic operations at scale, and they have very strong retail and distribution networks. These strengths are invaluable – but only when the rollout hits scale.”
Unlicensed spectrum players, meanwhile, are approaching the market differently – with lower-cost technology. SigFox’s recent announcement of below-$2 connectivity modules shows it is targeting applications that MNOs will, economically, be unlikely to reach – even with the new mobile IoT technologies. Duke-Woolley adds: “Theoretically there is enough opportunity for all the LPWA technologies in the market. The argument goes that the licensed spectrum alternatives will dominate in the end, with unlicensed spectrum players losing out… That said, the unlicensed players continue to gain investment funding, and to gain significant connection volumes.”
Broadly, the MNOs will address the ‘top of the pyramid’; the highest value applications that require widespread coverage and guaranteed quality of service, believes William Webb, Cambridge Wireless deputy chair and Weightless SIG CEO. “Unlicensed solutions will address the bulk of the applications, as well as enabling connectivity where there is no cellular coverage.”
Defending the IoT from malicious intent will also be a challenge. In its Predictions 2017 report market research company Forrester warned that there will be a large-scale IoT security breach over the coming 12 months, and that hackers will continue to use IoT devices to promulgate distributed denial of service (DDoS) attacks.
“The top three factors that will shape the IoT industry in 2017 will be security, security, and security,” predicts Namie. “Security of the network, security of device hardware, and security at the IoT application layer. We have seen just the tip of the iceberg in terms of vulnerabilities, notably in consumer-grade devices. Enterprises are demanding greater security technologies and threat mitigation strategies, both for their own connected products and vendors’ connected products.”
“IoT devices are designed for ease of use. Security is often a minor consideration,” warns Neil Martin, product manager at Panda Security. “Many IoT devices are easy to hack and compromise, offering a toehold in corporate and home networks. Device makers deliver their ‘toys’ with the same default username and password – which many users don’t change. The operating systems and control apps are less frequently updated to patch discovered vulnerabilities. Communication data sent to and from the IoT may be unencrypted.”
As wireless IoT networks appear in 2017 they will present a tantalising target for hackers. “Recent DDoS attacks have highlighted the damage that can be caused through the hacking of IoT devices,” points out Georgoulis. “We are sure to see an increase in such attacks in 2017.”
Security “will remain a significant IoT issue. It will probably take a crisis, however, before the industry is fully galvanised into action,” warns Allott. “Many key IoT players are progressing with their rollout plans, ignoring security issues. From the customer perspective the lack of [a] solid story here is manifesting as a subtle pervasive friction and resistance to large-scale IoT adoption.”
In fairness, a secure IoT can only be possible if secure storage and trusted execution is available on endpoint devices, and IoT device vendors haven’t had many options up until now, points out David Rogers, CEO at Copper Horse. “The fact that secure chipsets are starting to come to market will help the IoT sector generally, and will have a beneficial impact on industry and consumers.”
Extending licensed and unlicensed coverage
In February 2016 Ericsson, Orange and Intel completed a live trial of EC-GSM-IoT technology using the 900 MHz band. It achieved a coverage extension of 20 dB beyond GSM – a seven-fold claimed improvement in the range of low data rate applications. Ericsson cellular networks optimised for the IoT will be operational in 2017, the operator says.
Seven months later the UK government-backed Digital Catapult launched its Things Connected support programme that will (initially) run 50 LoRaWAN base stations across London to establish the UK’s largest LoRaWAN network. The free to use initiative aims to provide a testbed to support evolving IoT technologies.
In October 2016 Vodafone announcedthat it would launch NB-IoT in four European markets (Germany, Ireland, the Netherlands, and Spain) in the first quarter of 2017. Vodafone also announced roll out of the NB-IoT standard across all the countries it operates in by 2020.
Time is ticking
Deployment timescales for NB-IoT and LTE-M will prove critical if these technologies are to become the network of choice for both local and national IoT applications. “Deployment timescales are important in that they need to be soon,” Duke-Woolley says. “Unlicensed spectrum alternatives are already being deployed, some in large numbers, and LTE-M/NB-IoT are in a ‘catch up’ situation.” If they fall behind further because of later deployment it would not help their anticipated market share, Duke-Woolley believes.
Deployment timescales will prove a “tricky” question, Allott acknowledges. “NB-IoT and LTE-M essentially have a monopoly on national-level coverage through licensed spectrum. To that end IoT applications that require national coverage are totally dependent on their timelines for rollout; the IoT service provider is 100 per cent dependent on [NB-IoT’s/LTE-M’s] rollout.”
But for local- or campus-level IoT deployments, where ISM band technology can be used, different rules apply. “These can be rolled out straight away – and every deployment eats into the market potential of NB-IoT and LTE-M,” Allott says. “The pertinent question is what percentage of IoT applications are ‘local’? If it’s high, and [licensed spectrum] rollout is slow, then MNOs could miss the boat… It’s hard to resolve this question currently, however, because many IoT business models are embryonic at best, so it’s difficult to resolve the national versus local question.”
At this stage in its progress, “perhaps the biggest issue with wide-area IoT solutions is the lack of clarity as to which wireless technology to build into any device,” says Webb. “Open standards bodies, such as Weightless, aim to provide a means for the industry to deliver greater consensus. The answer might be to have multiple solutions covering licensed and unlicensed.”
“There are perhaps going to be some messy deaths of some proprietary radio n etworks in 2017,” says Rogers. “There is only so far you can go before the market decides who the winners are. The question is, what will happen to those IoT solutions deployments afterwards? Will the equipment be replaced – or will it live on for a few years in isolation?”