Market Insight

CTIA 2015 Announcements Build Momentum for LTE MTC

September 22, 2015

Sam Lucero Sam Lucero Senior Principal Analyst, IoT Platforms
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News Overview

  • Several cellular M2M component players made announcements at the CTIA Super Mobility 2015 tradeshow in September regarding the introduction of LTE-MTC chipsets and modules.
  • Companies making announcements included Sequans Communications, Telit, and u-blox.
  • LTE-MTC (Machine Type Communications) represents a branch evolution of the LTE cellular standard emphasizing low power consumption and low cost (and, eventually, greater end-point volume scalability and communications robustness).
  • This optimization for M2M applications contrasts with the development of LTE for smartphone and consumer applications, which emphasizes faster data-rates.
  • LTE-MTC current, and upcoming, standards include LTE Cat-1, LTE Cat-0, and LTE Cat-M. (There is also discussion of the development of a narrowband iteration of LTE, known variously as “Narrowband LTE (NB-LTE)” and “LTE Evolution”.

Our Analysis

The LTE Cat-1 standard was actually ratified by the 3GPP in its Release 8 specification in 2008. Designed to provide a max downlink data rate of just 10 Mbps Cat-1 wasn’t brought to market initially, as the mobile industry focused on utilizing the faster Cat-3 through Cat-6 variants. However, over the last twelve months there is growing interest in Cat-1 from the M2M market for two primary reasons:

  • First, 2G networks will be shut-down in the near future in the US, and even 3G network shut-downs have been announced in Europe. These developments have caused a desire to “future-proof” M2M deployments by using LTE technology.
  • Second, Cat-1 is ideal for the growing M2M environment as it is 1) already available in the US, 2) enables a single antenna implementation (in a case-by-case operator approval of waiving the second antenna requirement), minimizing the changes needed to current 2G/3G single antenna equipment designs, 3) enables a 30% cost reduction relative to Cat-4, and 4) provides data speeds sufficient for most M2M applications.

In the US, three of the four leading mobile operators—AT&T, Verizon Wireless, and T-Mobile USA—have either already enabled Cat-1 support on their networks or have committed to doing so in the near future. On the device side, Telit announced at CTIA that it would introduce a Cat-1 module (the LE910) in October or November 2015 and follow this up with four more modules supporting Cat-1 to be introduced through 2Q 2016. Module maker u-blox announced (the week before CTIA) a portfolio of Cat-1 modules, including the TOBY-R2 and LARA-R2, to be available in 1Q 2016. Earlier, module maker Gemalto and chipset provider Sequans Communications announced a partnership to introduce LTE Cat-1 modules in 2H 2015. During the CTIA show, Sequans Communications also announced that a cellular router from Encore will use its Cat-1 chipset.

The LTE Cat-0 standard was ratified in March 2015 with 3GPP Release 12. Cat-0 only provides for a single antenna option and augments the cost optimizations enabled by Cat-1. Also, Cat-0 delivers an enhanced power saving mode (PSM) that is settable from two seconds to 24 hours, greatly extending battery life. However, it’s uncertain how much industry support Cat-0 will garner; Cat-0 may be passed over in favor of Cat-M, which provides much more significant benefits over Cat-1 than does Cat-0. Telit did introduce the LE866 running pre-release firmware for Cat-0, which they demonstrated at the Ericsson booth. The company will likely introduce further Cat-0 module products in 2H 2016, pending operator support for the standard. u-blox and other module makers have so far refrained from setting Cat-0 module release dates. Nevertheless, Sequans Communications demonstrated Cat-0 technology at CTIA 2015, in conjunction with Ericsson, and is committed to Cat-0 technology.

The LTE Cat-M standard should be ratified with 3GPP Release 13, currently set for March 2016. Cat-M should be a very significant enhancement to Cat-0. While the standard is still under discussion in 3GPP, it seems very likely there will be massive reduction in modem complexity compared to Cat-1 modems, along with reducing receive bandwidth to 1.4 MHz. Several interviewees stated a goal of at least approaching current GSMs modems in cost, though this may not be achieved with the final, completed standard.  In addition, Cat-M should enable a range of power saving options up to the ability to achieve 10+ years of battery life and significantly more ability to connect from remote and challenging locations with a 15-20 dB coverage enhancement. IHS does not expect Cat-M product announcements until 2H 2016 at the earliest, and it is likely commercial deployment won’t occur until the 2017 timeframe.

IHS believes the development and release of LTE MTC modules is a significant step for the cellular M2M market. With these solutions, the industry will be able to largely address the most notable deficiencies of cellular technology with respect to the unique requirements of the M2M market. This includes—but is not limited to—pricing, power consumption, and network longevity.

IHS believes LTE MTC modules will comprise a noticeable proportion of the M2M market only a couple years after introduction. Initial uptake is likely to be driven by the US, where 2G technology will be unavailable by the end of this decade at the latest. AT&T publicly announced its 2G sunset for 2017, and IHS now believes that T-Mobile USA will follow suit in early 2018 in order to refarm that spectrum for LTE. For clients that may have considered switching to CDMA 1xRTT or 3G HSPA, IHS recommends adoption of LTE Cat-1 as the better option, because of the minimal cost premium to 3G HSPA and the much better prospects for network longevity.

 

 

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