23 May 2018
Will LPWA or cellular technologies such as 2G, 3G, 4G and 5G drive the internet of things? Analysys Mason has forecast the future of IoT connectivity by
network type across the world
NB-IoT will be the dominant network
for IoT in 2026
NB-IoT – narrowband internet of things –
technologies will dominate IoT, but 3G and 4G cellular
technologies, followed by LTE-M, will support large volumes of
connections. According to Analysys Mason, the overall number of
connections will reach 5.1 billion in 2026.
Of these, 1.6 billion will use 2G, 3G, 4G and 5G cellular
connections and 3.5 billion will use low-power wireless access
(LPWA) including NB-IoT and LTE-M.
The number of 3G and 4G connections will grow at 24% a year.
LTE represents a viable alternative for automotive applications
but does not meet the cost and power needs of most IoT
applications. These are addressed by LPWA networks.
There is no dominant LPWA technology. LTE-M connections,
which are largely complementary to those using NB-IoT, will
grow at 131% a year to 9 million. Other LPWA connections that
are more direct substitutes for NB-IoT will grow in number to
617 million, driven by new network operators such as Thinxtra
as well as traditional players such as Orange.
NB-IoT will have 38% of total
connections in 2026, backed by Chinese market
Support from the Chinese government has driven the
widespread deployment of NB-IoT by all three Chinese operators,
and will benefit other operators using NB-IoT.
In 2017, most of the commercial NB-IoT contracts were in
Several operators launched LTE-M in 2017, including
AT&T, Telstra and Verizon.
The LTE-M share of the total market was less than 1% but
this will grow significantly during the forecast period to
reach 19% by 2026.
LTE-M is a substitute for some 2G telematics applications in
the automotive and fleet sectors, and has been adopted first by
many of those operators that have decommissioned their 2G
According to Analysys Mason, 3G and 4G will capture a 27%
market share in 2026. This category, comprising mainly LTE
connections, is largely connecting applications in the
automotive and fleet sectors that can support the higher cost
of 4G devices and may require higher bandwidth.
5G will constitute just over 1% of the total connections in
2026, but this will be the average across all application
groups. For automotive and embedded SIMs specifically, 5G will
have a 4% share of the total connections.
However, widespread adoption will depend on the replacement
cycles of the vehicles as well as the ability to achieve good
NB-IoT will dominate, but will
co-exist with other LPWA technologies
Although NB-IoT will form the largest market in 2026, other
LPWA technologies will be important. Several will continue to
gain momentum. Many operators are deploying more than one LPWA
They have identified different use cases for each
technology, each representing a significant opportunity. LTE-M
is better suited to supporting mobility, whereas LoRa or Sigfox
better support static applications.
Operators can justify investment in more than one technology
because all are relatively inexpensive to deploy.
It is uncertain which technologies will gain traction and
which will cease to exist.
There were more LoRa announcements than NB-IoT announcements
in 2017, but the latter are more likely to have wide coverage
as more will be for national networks.
All three Chinese operators and operators with significant
footprints are supporting national NB-IoT deployment,
suggesting that the coverage will be greater than that of
Analysys Mason expects that NB-IoT will be deployed at scale
and will take a greater share of connections over the forecast
period; support for LoRa, Sigfox and LTE-M will continue.
China will dominate the market by
2026 with 1.1 billion connections
China will be the biggest market for IoT of all types by
2026, according to Analysys Mason, with North America and
Europe in second and third places.
Both Canada and the US are in the process of closing 2G
networks, even though 2G connections formed 17% of the total in
There will be few remaining 2G IoT connections in North
America by 2019. Operators that have not decommissioned their
2G network have smaller IoT bases overall but will have
deployed more connections on 3G/4G.
The market share for 3G/4G networks – 55% of the
total IoT connections in 2017 – will decrease over the
forecast period as LPWA networks take over.
LTE-M was deployed by the two largest operators in the
region, AT&T and Verizon, in 2017, and Bell Canada and
Telus also plan to deploy it. Operators are implementing LTE-M
to support a large number of use cases, especially those
requiring mobility such as in the aftermarket automotive and
asset tracking sectors.
All sources: Analysys Mason. Adapted with permission from an
Analysys Mason report, IoT Forecast: Worldwide Technology
Trends 2017-2026, written by Michele Mackenzie, principal
analyst, Rémy Giraud, research analyst, and William
Hare, senior analyst