Jedi-OT knights and the SIMless wonders
David Parker, Beecham Research
Long ago, in a cellular galaxy not too far away this ubiquitous device was specified by ETSI and in 1991 the first batch were produced by G&D. It provides secure, authenticated access for billions of people globally to cellular networks. It is of course the dear old SIM card. This invention has been an enabler for the growth of mobile telephony but has it done the same for M2M? And will it do so for the IoT in the future, asks David Parker, the senior analyst with Beecham Research.
Arguably, the SIM helped kick-off the M2M market, allowing lower cost data connection to generic public networks, where previously specialist data networks were required. As GSM evolved, offering GPRS packet data connectivity in the early 2000s, this made connecting machines even easier and allowed vertical markets such as vehicle tracking – along with GPS, wireless PoS, security alarms and a host of other nascent M2M applications to develop.
Initially, the Mobile Network Operators (MNOs) were slow to address the M2M opportunity. With it’s long sales cycle and low ARPUs it took some time for the MNOs to adjust to a new business model. Yet today there are over 300 million M2M connections globally, using cellular networks, the vast majority connected via a SIM card, with embedded SIM components that are more attuned to M2M needs now making an entry. This growth in connections has been impressive and set to continue at a rapid rate. Yet, to achieve the really huge number of objects forecasted for connection to the IoT, is the SIM the only answer?
There is a cohort of companies investing in Low Power Wide Area (LPWA) networks, who in Star Wars vernacular see the SIM as an object from the dark side. These Jedi-OT Knights see the SIM and established cellular networks in general as restricting growth of the IoT. Their approach is to use the un-regulated ISM bands, having the advantage of much lower costs and power consumption, and alternative ways of providing necessary security. Cellular networks are of course optimised for telephony and high-speed data, where power consumption is not a problem, while many IoT applications only transmit a few bytes of data each day and the end-point devices spend most of their time in ‘sleep’ mode to save power. Their argument is that cellular networks and the devices needed to access them are too costly for many IoT projects to make a return on investment. Also that networks using the ISM bands are not loaded with the costs of the 2G/3G/4G networks and can deploy city and even national scale networks rapidly and for a fraction of traditional wireless network costs.
These ISM-LPWA companies are promising to disrupt and revolutionise the IoT market, helping it to grow even faster, offering alternative wide area connectivity options to developers and end users who had until recently little choice other than to buy SIM and airtime packages from the MNOs. The most active international challengers so far to the dominance of the SIM are companies in the LoRa Alliance and Sigfox. Leaving aside the different engineering approaches of these companies, the biggest differences between them are in their business models.
Those using LoRa technology are building both private and public networks, all based on the Semtech transceiver chipset. Network builders can choose from a wide range of base station, gateway and end point components designed around the LoRa WAN specification. Networks covering large geographic areas can be built rapidly. Sigfox on the other hand are building national networks through partners who will own and operate them. This build and they will come approach means they can control all aspects of network interoperability, as well as device addressing and security. Making their IPR freely available to manufacturers means customers can choose from many Sigfox-ready, end-point devices, tested and approved for connection. Most of these connections make less than 10 calls per day of a few bytes each.
Clearly, there is room for both SIM based and SIM-less connectivity. In a rapidly growing market where lower costs and long battery life bring a host of new applications within financial and operational viability – LPWANs inhabit a world of very low data volume and very low revenues per connection, albeit with potentially huge numbers of them. This is clearly a challenge for MNOs who are now looking to maximise their investments in 4G/LTE. The regulated cellular world is responding with its own LPWAN technologies, based on LTE and specified in 3GPP releases. The Empire Strikes Back with promises of low power and low cost devices to enable connection to tried and trusted MNO networks. Known as LTE-M, this technology has the credentials to challenge the assault of the SIM-less wonders. The emerging struggle for IoT connections between established networks and the new LPWAN companies has something of an ‘Empire versus the upstart rebels’ ring to it but the most likely outcomes are that there will be business for both approaches to connecting things, as diversity and choice can only stimulate growth – may the force be with them!