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Connectivity in IoT: swimming against the current

IoT is expanding rapidly. We project a fourfold increase from 6.3 billion connections in 2016 to over 25 billion in 2025. LPWA is emerging as one of the drivers behind this connections growth. Operator momentum is building around the rollout of LPWA technologies, particularly LTE-M and NB-IoT. As of the end of May 2018, 52 commercial networks were launched globally. Technically, LPWA is a genuinely good piece of innovation: low power consumption improves data economics without compromising spatial coverage. The problem for operators is that because LPWA transmits low data volumes at low speeds, it is priced as a utility – with little leverage. Given the promise of IoT representing the ‘next wave of connectivity’, it is therefore an unfortunate irony that connectivity itself will account for a very low share of value: only 5% by 2025.

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