A new report from the IoT analyst firm Berg Insight estimates that the global number of cellular IoT (e.g. NB-IoT, LTE-M, LTE, 2G, 3G, etc) subscribers increased by 70 percent during 2018 to reach 1.2 billion.  IoT growth was driven by “exceptional adoption” in China. 

The market research firm forecasts that there will be 9 billion IoT devices connected to cellular networks worldwide by 2023.

China, which accounted for 63% of the global installed base in 2018, is expected to continue to be the key driver for IoT adoption, as the Chinese government is actively driving adoption as a tool for achieving domestic and economic policy goals.

“China is deploying cellular IoT technology at a monumental scale”, said Tobias Ryberg, principal analyst and author of the report.

According to data from the Chinese mobile operators, the installed base in the country increased by 124% year-on-year to reach 767 million at the end of 2018.

China has overtaken Europe and North America in penetration rate with 54.7 IoT connections per 100 inhabitants, Ryberg said.

He said the role of the government is the main explanation for why China is ahead of the rest of the world in the adoption of IoT.

“The most distinctive characteristic of the Chinese IoT market is however the way that the government is systematically using new technology to implement its vision for urban life in the 21st century,” Ryberg said.

“At the same time the private sector also implements IoT technology to improve efficiency and drive innovation.”

China has witnessed widespread adoption of connected cars, fleet management, smart metering, asset monitoring and as well as new consumer services like bike sharing.

The report also analyses the IoT business KPIs (Key Performance Indicators) released by mobile operators in different parts of the world and found significant regional differences.

While China has the world’s highest IoT penetration rate, Europe seems is doing better job in terms of monetizing the IoT business.

According to the report, the monthly ARPU for cellular IoT connectivity services in China was only €0.22 ($0.25), compared to € 0.70 in Europe.

Global revenues from cellular IoT connectivity services increased by 19% in 2018 to reach €6.7 billion. The ten largest players had a combined revenue share of around 80%.

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Editor’s Note:  The most popular cellular IoT network in China is NB-IoT.  China Telecom Offers NB–IoT Nationwide. ChinaTelecom has built the world’s largest NB–IoT network so far by upgrading 310,000 base stations acrossChina to support NB–IoT. … It is using the 800MHz spectrum band, which is being refarmed for 4G in China and enables good in-building penetration and very wide coverage.

A GSMA case study illustrates how China Mobile, China Telecom and China Unicom enable consumers and businesses to benefit from better services using NB-IoT, while opening up new business models for mobile operators and their partners.

Supporting extensive coverage and low power consumption, NB-IoT is making it feasible to securely remotely monitor and control very large volumes of everyday devices, appliance, machines and vehicles. Both consumers and businesses in China are now benefiting from greater convenience, better reliability, and improved safety and security.

Above image courtesy of GSMA

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In a separate report, Berg Insight says 5G will reach the IoT market in late 2020. 

The first 5G cellular IoT modules will become available to developers this year, enabling early adopters to create the first IoT devices based on the standard. Based on the experience of previous introductions of new standards, 5G will however not be an instant hit. By 2023, Berg Insight forecasts that 5G will account for just under 3 percent of the total installed base of cellular IoT devices.

“5G still has some way to go before it can become a mainstream technology for cellular IoT”, says Tobias Ryberg, Principal Analyst and author of the report.

“Just like 4G when it was first introduced, the initial version of 5G is mostly about improving network performance and data capacity. This is only relevant for a smaller subset of high-bandwidth cellular IoT applications like connected cars, security cameras and industrial routers. The real commercial breakthrough will not happen until the massive machine type communication (mMTC) use case has been implemented in the standard.”

mMTC is intended as an evolution of the LTE-M/NB-IoT enhancements to the 4G standard. Since NB-IoT has only just started to appear in commercial products, there is no immediate demand for a successor. Over time, fifth generation mobile networks will however become necessary to cope with the expected exponential growth of IoT connections and data traffic. The report identifies homeland security as an area where 5G cellular IoT can have a major impact already in the early 2020s.

“5G enables the deployment of high-density networks of AI-supported security cameras to monitor anything form security-classified facilities to national borders or entire cities”, says Mr. Ryberg.

“How this technology is used and by whom is likely to become one of the most controversial issues in the next decade.” 

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References:

http://www.berginsight.com/News.aspx?m_m=6&s_m=1

https://www.gsma.com/iot/nbiot-iot-commercial-case-study-china/

https://www.telecomasia.net/content/berg-insight-china-driving-global-cellular-iot-adoption