Deutsche Telekom Joins the $578 Billion LPWAN Party With European City-Scale Rollouts

Late last month, Deutsche Telekom (DT) made a big announcement: the company has rolled out NarrowBand-IoT (NB-IoT) networks across Europe. Digging into the details, DT told us that it now has NB-IoT capability in eight countries, all across Europe: Germany, the Netherlands, Greece, Poland, Hungary, Austria, Slovakia, and Croatia. Other key details in the announcement are that ista is a partner of DT, offering the “first NB-IoT smart building solutions,” and that the latter has also developed a “Prototyping Hub” to develop solutions for different industry segments.

To be clear, the implementation won’t actually start until Q2 2017; however, the company disclosed it is working on pilots with “large” customers related to meter reading, smart parking, and asset tracking. These rollouts are also not blanketing entire countries (yet), but instead focused on adding networks to cities for specific use cases; DT did claim they plan to expand the coverage to more cities throughout 2017. While the German telco was indeed quick to the mark to make announcements of a smart parking installation in late 2016, Vodafone was the first to announce a large commercial deal with two cities in Spain – it collaborated with a water utility to secure a long-term NB-IoT meter-reading contract.

While DT’s coverage map sounds far and wide, it is by no means the first mover. As shown in Figure 1, NB-IoT trials have been going on across Western Europe, Eastern Europe, and Scandinavia. MNOs (mobile network operators) in the U.S. are testing sister standards to NB-IoT, such as LTE-M1, and companies are testing a mix of these two in large Asian markets. To put this in perspective, NB-IoT coverage is far behind that of other competing LPWAN standards, such as LoRaWAN and Sigfox. While LoRa is slowly gaining coverage (and has planned deployments on all continents), Sigfox has already gained significant coverage across Europe (more than 50% in many countries) and is planning to use its massive fundraising round to scale in the U.S., South America, and China.

It should come as no surprise that MNOs such as DT are pursuing NB-IoT, and quickly. The standard was frozen in June 2016 by the 3GPP industry body. We predicted in a recent report that MNOs are going to be what drives the success of NB-IoT, as they have demonstrated themselves capable of operating large-scale, reliable networks. Whereas Sigfox licenses other network operators, and LoRa has seen a mix of MNOs (e.g. KPN in the Netherlands) and private operators (e.g. LORIOT, Acitility), NB-IoT is supported by a host of component manufacturers and MNOs, with a combined revenue of $578 billion across almost 80 countries (see Figure 2). This dwarfs the financial might of Sigfox’s partners, and also that of the LoRa Alliance; these two combined are only active in 36 countries. In addition, many MNOs have roaming agreements, which increases coverage for the NB-IoT group even further, to over 200 countries.

We predict this huge industry support will be what pushes NB-IoT to surge to the lead by 2022, likely amassing over 90% of LPWAN connections globally. Readers are urged to hedge their bets with respect to LPWAN standards, as many of the large MNOs are (such as SoftBank), but to look ahead and consider the long game with respect to LPWAN penetration. Furthermore, Lux’s Digital Team will reach out to DT to learn more about the ista partnership and the disruptive potential in the building and industrial automation space.

By: Alex Herceg