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Internet of Things:Last Mile ConnectivityOptions Explained

01 | WHITEPAPER

Introduction

The Internet of Things has been hyped andhyped. And for good reason: It is nowbecoming feasible to connect almost anythingand everything, giving individuals andorganisations new and valuable insights.

However the question remains, which connectivitytechnology should be used for which purpose? Anenormous and diverse ecosystem has created a wide

variety of connectivity options, of varying maturity, generatingconfusion for both large and small businesses.

Internet of Things: Last Mile Connectivity Options Explained | 02

Today, the Internet of Things (IoT) relies heavily on short-range wireless technologies, such as WiFi, Zigbeeand Bluetooth. Over the next five years, long-range wireless technologies will play an increasinglyimportant role. Leading equipment maker Ericsson anticipates that the number of wide area IoTconnections will grow rapidly at a CAGR of 30% over the next five years, compared with a 20% CAGR forshort-range IoT connections (see graphic).

Wireless wide area technologies are in demandbecause they can provide flexible connectivityover distances of several miles, eliminating theneed to dig up roads and lay cables. Moreover,cellular technologies can support mobileconnections, such as those needed by connectedvehicles and wearable devices, such as fitnesstrackers.

This paper outlines the numerous ‘last mile’connectivity options now available to enterprises,while weighing the pros and cons of alternativetechnologies. In particular, it considers how newlow power wide area (LPWA) cellulartechnologies are making it cost-effective toexpand the IoT into new markets and applications.The discussion continues to explore the likelyimpact of reprogrammable SIM cards, which makeit straightforward for devices, machines,appliances and vehicles to switch betweendifferent service providers.

“Leading equipmentmaker Ericssonanticipates that thenumber of wide area IoTconnections will growrapidly at a CAGR of 30%over the next five years,compared with a 20%CAGR for short-range IoTconnections.”

Connected devices (billions)

1 In our forecast a connected device is a physical object that has an IP stack, enabling two-way communication over a network interface. Traditional landline phones are included for legacy reasons

2 Connected devices connecting to a wide-area network through a common gateway

0

5

10

15

20

25

30

2020 2021 2022201920182017201620152014

Wide-area IoT

Short-range IoT

PC/laptop/tablet

Mobile phones

Fixed phones

16 billion

29 billion

10%

CAGR20222016

0.4 2.1 30%

5.2 16 20%

1.6 1.7 0%

7.3 8.6 3%

1.4 1.3 0%

Source: Ericsson Mobility Report, November 2016

03 | WHITEPAPER

Last mile connectivity options

A device, machine, appliance or vehicle can beconnected in many different ways. It can use awide area network to relay data directly to aserver or it can use a short-range technology,such as WiFi or Bluetooth, to connect to a meshnetwork, hub or gateway. Wide area networkstend to be less complex than mesh networks asthe endpoints can be connected directly to agateway or base station, rather than relying on arelay system to transmit messages.

There are many different wide area and short-range technologies available, but they can bedivided into two categories: those that aredesigned for high throughput rates and,therefore, have relatively high powerconsumption and those that are designed tominimise energy consumption and, therefore,provide relatively low throughput. Conventionalcellular technologies and WiFi tend to offer highthroughput rates, while new low power wide area(LPWA) technologies and Bluetooth are lowenergy technologies (see graphic).

Low power wide area options

Designed specifically to support IoT, LPWAtechnologies are optimised for use in low costdevices that need to transmit small amounts ofdata. The objective is typically to provide low costand energy-efficient connectivity for a largenumbers of devices in a small geographic area.Such devices include sensors that can monitor cityinfrastructure, environmental conditions, mobileassets and supply chains, as well as energy andwater meters. Typically these connected devicestransmit regular updates, such as a temperaturereading, or configurable event triggers.

Broadly, there are two kinds of LPWAtechnologies: Standardised technologies that usethe licensed spectrum belonging to telecomsoperators and proprietary technologies thatoperate in unlicensed spectrum.

Proprietary LPWA technologies inunlicensed spectrum

A number of LPWA technologies, such as Sigfoxand LoRa, have already been deployed to connectsensors and other devices to the Internet ofThings. As they use unlicensed spectrum andhaven’t gone through a standardisation process,these proprietary LPWA technologies have cometo the market quickly.

However, these technologies are vulnerable tointerference from other radio signals transmittedusing the same blocks of unlicensed spectrum.Moreover, they are only supported by a smallnumber of vendors and typically don’t supportroaming across international borders.

Cellular

Ran

ge

Battery Life

LONG

SHORT LONG

Local network(WiFi, ZigBee, Z-Wave)

Personal network(Bluetooth)

Low-Power Wide-Area Network(LPWAN: Sigfox, LoRa, Dash7)

Source: Alexander Vanwynsberghe, Blog article 'Long-range radios will change how the Internet of Things communicates'

Internet of Things: Last Mile Connectivity Options Explained | 04

Stockholm-based CLX Communications, a globalprovider of cloud-based communication servicesand solutions to enterprises and mobile operators,says that these issues present a significant barrier tothe adoption of LPWA technologies in unlicensedspectrum. “Quality of service is high on the agendafor many value-added resellers servicing bothdomestic and international roaming use cases,” saysJon Campbell, Director, Messaging & IoT EMEA atCLX. “It is simply unrealistic to rely on unlicensedspectrum for ad-hoc connectivity, especially whereregular contact is required. The consistent feedbackis that cellular is the default connectivity of choice,with other technologies playing a complimentaryrole, such as checking in at home locations via WiFiand using cellular whilst in transit.”

Indeed, one of the main challenges facingunlicensed spectrum LPWA technologies isensuring widespread coverage. “With LoRa andSigfox, you need to make sure there is coverage ina particular market for that particular technology,”notes Andrew Brown, Executive Director,Enterprise and IoT Research at Strategy Analytics.“But contrary to some suggestions that everythingwill shift to NB-IoT and 5G, unlicensed LPWA isgoing to stick around because it is meeting theneeds of specific use cases and price points. LoRawill likely be the winner in this segment because itis rapidly building an ecosystem of solution

providers, aggregators and chip vendors, whereasSigfox remains more proprietary with a closedecosystem. Fundamentally, the use case willdetermine the most appropriate technology.”

Standardised LPWA technologies inlicensed spectrum

Three new LPWA technologies, NB-IoT, LTE-M andEC-GSM-IoT, have been standardised by 3GPP foruse in licensed spectrum. Mobile operators aroundthe world are now adapting their cellular networksto support these technologies, paving the way forcommercial services during 2017. They make useof operators’ existing infrastructure, but aredesigned to provide better coverage thantraditional cellular services. Early operator trialssuggest that 3GPP-compliant LPWA technologiescan provide connectivity in previously hard-to-reach locations, such as basements and deepinside buildings. In addition, the use of licensedspectrum means 3GPP-based LPWA connectivitywon’t suffer from interference, increasing reliabilityand quality of service.

NB-IoT and EC-GSM-IoT, in particular, have beenoptimised to transmit brief messages – about thelength of an SMS – such as those required by theuse cases shown in the graphic below.

Traffic characteristics of deployed massive IoT connected devices in a city scenario

WATER METERS

100 bytes

12 hours

10,000/km2

Typical message size

Message interval

Device density

ELECTRICITY METERS

100 bytes

24 hours

10,000/km2

GAS METERS

100 bytes

30 minutes

10,000/km2

VENDING MACHINES

150 bytes

24 hours

150/km 2

BIKE FLEET MANAGEMENT

150 bytes

30 minutes

200/km2

PAY-AS- YOU-DRIVE

150 bytes

10 minutes

2,250/km2

Source: Ericsson Mobility Report, November 2016

05 | WHITEPAPER

3GPP-standardised technologies are underpinnedby the scale and breadth of the well-establishedexisting cellular ecosystem, meaning solutions willbe available from a large number of vendors andin a consistent way across the world. As a result,vehicles, wearables and other mobile assets will beable to stay connected across internationalborders, while manufacturers will be able to shipconnected products internationally and benefitfrom the resulting economies of scale.

Standardised technologies also benefit fromeconomies of scale making it feasible to deploylarge numbers of connected sensors in relativelysmall areas, such as a farm or an industrial plant.Andrew Brown of Strategy Analytics says it shouldbe feasible to sell NB-IoT modules for US$5-10 apiece, about the same as for a LoRa module.

“Standardised technologies have the advantagethat you know they will work. They are a worry-free option supported by an ecosystemalignment,” says Sylwia Kechiche, Lead Analyst atGSMA Intelligence. “And I have been impressedwith how fast things have come together for NB-IoT, in particular.”

LPWA technologies in licensed spectrum can alsobenefit from mobile operators’ built-in securitysystems and end-to-end control over theconnectivity. Operators can deliver secureconnectivity and support for authenticationappropriate to the IoT use case.

Conventional cellular technologies

There are high throughput IoT use cases, such asstreaming video to a passenger in a car orconnecting security video cameras, which need ahigher level of performance than that delivered byLPWA networks. These use cases generally need touse 3.5G or 4G cellular services, such as thoseprovided by LTE Advanced, to provide the necessaryhigh bandwidth connectivity (see graphic below).

Although 2G cellular networks are still widespreadand widely used, particularly in the developingworld, Sylwia Kechiche of GSMA Intelligence saysadoption of LPWA technologies is being driven inpart by uncertainty around the future of 2Gcellular networks that currently serve a largeportion of M2M applications. She notes that someoperators have closed down 2G networks in SouthKorea, US, Australia and Japan, as they look to re-farm the spectrum for use with 4G and 5G.

The development of 5G is the next major step inthe on-going evolution of the global mobileecosystem. The mobile industry is on course tobegin deploying commercial 5G networks from2020 onwards. Currently being standardised by3GPP, 5G networks should be able to support vastnumbers of connected devices, while alsoenabling ultra-reliable and low latencyconnectivity for demanding applications, such aslive virtual reality broadcasts and remote controlof equipment and vehicles.

Scaling up in performance and mobility

LTE Advanced>10 Mbps

n x 20 MHz

LTE Cat-0Up to 1 Mbps

20 MHz

LTE-M10s of kpbs up to 1 Mbps

-1 MHz narrowband

NB-IoT

Today+

Mobile Video security Wearables Object tracking Utility metering Environment monitoring

Smart buildingsCity InfrastructureConnected healthcareEnergy managementConnected car

Release 12

Sample use cases

Release 13 & beyond Release 13 & beyond

Up to 10s of kbps-200 kHz narrowband

Scaling down in complexity and power

Source: Qualcomm, Harmonizing the industry on a narrowband IoT (NB-IoT) specification, September 2015

Internet of Things: Last Mile Connectivity Options Explained | 06

Short range technologies

Short-range technologies typically use unlicensed spectrum and provide coverage of up to 100 meters.Short-range technologies include WiFi, Bluetooth, ZigBee and NFC (see graphic),

Although many of these short-range technologiesare proven and mature, their reliance onunlicensed spectrum makes them susceptible tointerference. Their short range also means theyneed to be connected to a mesh network or alocal hub or gateway, which is then connected toa cellular network or a fixed-line network.

Short-range technologies often rely on buildingowners configuring and maintaining themcorrectly. “CLX is seeing a growing number ofsolution providers using cellular to support astatic solution, such as home oil monitoring andhome automation, to enable them to retaincontrol of the connectivity and bypass unreliableand changeable home WiFi services,” says JonCampbell of CLX.

In some cases, cellular and short-rangetechnologies are used together in a tetheringarrangement. For example, a 4G cellularconnection can be used to connect a WiFihotspot to the Internet. This configuration can beused to enable passengers inside a vehicle, forexample, to connect tablets and laptops to onlineservices and apps. “Short-range technologies arevery fragmented, but many of them, such as WiFi,

Bluetooth and ZigBee, are low cost and proven,”says Sylwia Kechiche of GSMA Intelligence. “Theycan also be used in conjunction with cellular,whereby short-range technologies can leveragethe security credentials from the SIM, for example,using the Generic Bootstrapping Architecture(GBA).”

The existing market momentum continues to fuelthe evolution of short-range technologies. Forexample, the latest version of Bluetooth (Bluetooth5) has been designed to work over a range of 200meters (4X that of Bluetooth 4) and double thebandwidth. Bluetooth 5 also has better locationawareness and increased broadcast message size(8X that of Bluetooth 4), enabling the technologyto be used to push alerts to users from beacons,such as those deployed in retail stores.

At the same time, WiFi is expanding into newfrequency bands, with 802.11ad enabling high-speed data transfers in high frequencies and802.11ah operating below 1GHz. Whereas 802.11adcould be used in the networking, mobile device,computing, and peripheral spaces, 802.11ah couldsupport low power IoT devices and wirelesssensor network applications.

High BW

Medium BW

Low BW

Short Range

802.11ac802.11ad802.11n

5G

4G

3G

2G

802.11a802.11b802.11g

BlueToothBLE

WBAN802.15.6 WPAN

802.15.3

ZigBee /802.15.4

VSAT

LPWANRFID /NFC

Medium Range Long Range

Source: Peter R Egli 2015 (appeared in the article by Alain Clapaud 'IoT: Waveband Wars about to hot up'

07 | WHITEPAPER

Reprogrammable SIM Cards

The expansion of the IoT is also being enabled bythe growing availability of reprogrammable SIMcards. This technology enables a manufacturer toembed a SIM card in a device, appliance, machineor vehicle and then have it provisioned to work ona specific operator’s network once the producthas been deployed in the field. This makes itstraightforward for the customer to change theconnectivity provider without having to servicethe device, appliance, machine or vehicle – theSIM card can be reprogrammed over the air.

“It is extremely important that you can put a SIM ina vehicle and activate it anywhere on anyone’snetwork,” says Andrew Brown of StrategyAnalytics. “In many IoT markets, manufacturers arelooking to deploy standardised kit and they don’twant to interfere with it once it is integrated intoequipment. You don’t want to produce vehicles ormeters and have to go and customise them inparticular markets. Standards-based technology,such as eUICC, and reprogrammable SIM cards areextremely important for those markets.”

The GSMA has created an Embedded SIMSpecification designed to be a single, de-factostandard mechanism for the remote provisioningand management of M2M connections, allowingthe “over the air” provisioning of an initial operatorsubscription, and the subsequent change ofsubscription from one operator to another. TheGSMA says more than 20 operators, two leadingM2M Alliances and numerous equipmentmanufacturers have backed the Embedded SIMSpecification.

Analysts say this technology will be particularlyimportant for connecting assets that travel acrossinternational borders, as it will enable them toswitch from one network to another. Expertsexpect companies in the automotive, fleetmanagement, asset management, supply chainand logistics sectors to be the leading adoptersof reprogrammable SIM solutions.

Internet of Things: Last Mile Connectivity Options Explained | 08

As explained in this paper, new cellular technologies are paving the wayfor a major expansion of the IoT. Over the next five years, the numberof cellular IoT connections is set to grow rapidly. Ericsson forecasts therewill be 1.5 billion cellular-connected IoT devices by 2022, up from about400 million cellular IoT devices at the end of 2016. Similarly, MachinaResearch, which uses a different methodology, anticipates that cellularIoT connections will grow from 334 million at the end of 2015 to 2.2billion by 2025, of which the majority will use variants of LTE.

Demand for LPWA connectivity will be one of the key engines drivingthis growth. Machina forecasts the industry will add 83 million LPWAconnections in 2017, taking the total at the end of this year to 142 million.By 2025, Machina anticipates 2.97 billion connections will use LPWAtechnologies - 11% of all IoT connections. LPWA technology will be mostwidely applied in homes, with building automation, security, whitegoods and household information devices accounting for more than abillion connections by 2025, according to Machina. Other analysts areeven more bullish about LPWA. Strategy Analytics, for example, predictsthere will be 5 billion LPWA connections as early as 2022.

Conventional cellular technologies are also set to play a major role in thedevelopment of the IoT. Ovum anticipates there will be 212 million 2Gand 212 million 4G IoT connections in 2021, while 3G will have 172 million.

As these forecasts highlight, no single connectivity solution can serveall IoT use cases. The connectivity requirements of rural farms, forexample, are vastly different to those of an urban home automationsystem. However, industry experts believe the IoT will increasinglygravitate towards standards-based technologies. Leif Östling, CTO atSymsoft and key participant in the GSMA Connected Living project,which developed the Subscription Management for the Embedded SIMspecifications, concluded ‘Given the long life cycle of IoT devices, a keyfactor in reducing the overall cost of ownership of cellular IoTconnectivity will be the ability to change the Operator on a SIMremotely. A common, open, standardised and secure architecture existstoday and will pave the way for massive adoption of eSIM technologynot only in IoT but in consumer communications over the next 5 years.'

Indeed cellular networks are now versatile enough to connect everythingfrom dense clusters of sensors tracking local environmental conditionsto high definition video cameras monitoring a home or manufacturingplant and in-vehicle systems navigating busy urban roads.

Although some enterprises will continue to employ application-specificconnectivity, many will want to harness the economies of scale andinteroperability associated with standards-based services. The recentstandardisation of several LPWA technologies by 3GPP, together withthe availability of reprogrammable SIM cards, looks set to usher in anexciting new era for the IoT.

Conclusions

© 2017

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About CLX Communications

CLX Communications AB (publ) connects enterprises to people andthings. We combine programmable API’s and cloud computing withour unparalleled Tier 1 Super Network to make it easy for businessesto embed global communications, including voice, SMS and mobiledata into their apps, business processes and IoT devices.

Our leading communications Platform-as-a-Service (CPaaS) deliversone of the highest service levels in the industry whilst processingmore than 1 billion API calls per month across 6 continents. Weprovide services to 4 of the top 5 CPaaS companies, and 3 of thetop 5 global internet brands with Tier 1 connectivity on which manyof their services rely.

CLX Communications AB (publ) is listed on the Nasdaq in Stockholm.

Find out more: www.clxcommunications.com