Why China is Leading NB-IoT Development Globally

Machine to Machine (M2M) communications have existed for years. It refers to the process of connecting remote machines to a central control point. Reducing costs of sensors and enhanced communications technologies mean that more ‘things’ can be connected. And by connecting them to the Internet a stream of data can be developed that can be used for everything from simple control to advanced analytics and machine learning. This is the difference with IoT.

For connecting different elements for different applications across different verticals needed a special wireless access technology to complement existing high-speed, high-power, high-throughput 3G, 4G access technologies. Most of the M2M connections over the last decade have been using 2G or 2.5G connectivity. However, with the evolution of LTE and road to 5G, 3GPP the global cellular standards body has ratified new standards such as LTE-M and NB-IoT.

NB-1 (NB-IoT), the narrowband evolution of LTE for IoT in 3GPP RAN, included in Rel.13 with specifications completed in Q2 2016. For applications with very frequent communication and a very low latency requirement or large amounts of data, NB-1 will be the best option. PSM and eDRX will drive these features and can enable up to 10 yrs of battery life in a scenario of a daily update limit of 200 bytes. (more on NB-IoT here)

China has been embracing NB-IoT technology since its announcement. 2017 is monumental as the first year for mass commercialization of NB IoT in China, completing the transition from lab and field test to commercial implementation. China’s leading position in the development of NB-IoT can be attributed to key positive factors in the country, including favorable policies, accelerating deployment of the network ecosystem by operators, technology development & improvement and component players.

Favorable Policies for NB-IoT Development in China

In China, developing IoT industry has risen to the height of national strategy. Chinese governments and regulators have always been striving to pave the way for NB-IoT network construction and application expansion. MIIT (Ministry of Industry and Information Technology) strongly promotes NB-IoT, with a target of over 20 million NB-IoT M2M connections in 2017, and reach over 600 million connections by 2020 across the nation. There is a strong government initiative in China.

Hardware System of NB-IoT in China

There are local providers in China able to offer the key elements within the NB-IoT hardware system—chipset and module. Local chip vendors HISILICON (owned by Huawei), PDA and SANECHIPS (owned by ZTE) have developed quality products alongside the likes of Qualcomm, who has been on the forefront of the evolution of wireless standards. In terms of modules, major domestic vendors based in Shanghai and Shenzhen have developed competitive products for further application. So far Huawei and Qualcomm are big winners when it comes to chip selection.

Examples of key Chinese NB-IoT Module vendors:

QUECTEL BC95 with HISILICON Boudica 120

 ZTEWelink ME3612 with Qualcomm MDM9206

Lierda NB05-01 with HISILICON Boudica 120

Software Environment in China

A complete software environment has been established for NB-IoT, including operation system, device management and IoT connection management platform, etc. Real-time Operation System (RTOS) is potentially a better choice running on MCUs for IoT devices, compared with traditional embedded OS. In terms of IoT management, Huawei and Intel have made great contribution. Huawei OceanConnect is an open ecosystem built on IoT, cloud computing and Big Data technologies. By now, OceanConnect provides over 170 open APIs and Agent software. Intel released its IoT E2E Reference Architecture and a portfolio of products.

Network Environment in China

The big three carriers in China, China Mobile, China Unicom and China Telecom have started NB-IoT lab testing as early as a year ago, and finally got the dedicated telecom number resource for IoT in Aug 2017. China Telecom had set up the biggest commercialized NB-IoT network (310K+ base stations upgraded), and expected more than 100 million users by 2018. China Unicom plans to provide E2E IoT solutions in key cities and expects to realize the national NB-IoT coverage in 2018.

Different from its competitors, the biggest mobile operator China Mobile is likely to implement NB-IoT and simultaneously use eMTC as a supplement. Equipped with more radio resources, more base stations and more investment, China Mobile can use NB-IoT to realize wide coverage and CAT.M for connecting smart vehicles, appliances, healthcare monitors, billboards, vendor machines, etc. in urban cities. As of May 2017, China Mobile had become the largest IoT network provider with more than 120 million IoT connections.

NB-IoT Applications in China

There has been a great deal of trials ongoing in major cities and demonstrative regions in 2017. By now, IoT applications are mainly focused on utility segments, such as smart gas/water metering, street lighting and parking, etc.

Examples of NB-IoT Deployments in China:

Shenzhen Water Group started deployment of smart water meters in Mar 2017

Deployment of smart parking system in Mount Longhu in Apr 2017

NB-IoT based ofo smart bikes were put into use in Beijing in Jul 2017

In brief, IoT is a long tail market, and it’s impossible for one solution to meet all IoT requirements. However, China is very ambitious for NB-IoT, initiating dozens of pilot and commercial projects across the nation. With the industrial ecology approaching mature, we have every reason to believe that large-scale application in key areas is on the horizon, and NB-IoT will continue to grow in China next year due to the government initiative.

Our full in-depth report on NB-IoT development in China is available for subscribing clients at our research portal

Flora is a Research Analyst at Counterpoint Research based out of Hong Kong. She started her career as an analyst for new market development with LeEco APAC, where she conducted market research regarding telecommunications, smart devices, internet and OTT business across APAC region. Furthermore, she moved to China Mobile International (CMI) to support globalization of the leading Chinese telecom giant, and help with strategic cooperation between CMI and global carriers. To pursue her line of interest in smart devices, IoT and mobile ecosystem, she joined Counterpoint Research team. In academics Flora holds a Master in Corporate Communications with the Chinese University of Hong Kong, and Bachelor of Law in International Relations and Regional Studies with Sun Yat-sen University.

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