Roaming and Monetisation Continue as Core Service Provider Challenges
A new report from Kaleido Intelligence, a leading connectivity market intelligence and consulting firm, has found that cellular LPWAN (Low Power Wide Area Networks consisting of NB-IoT and LTE-M) connectivity revenue will grow over twofold over the next 5 years, reaching $2.3 billion, compared to less than $900 million in 2022.
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The new report, NB-IoT LTE-M: Strategies Forecasts, found that China will account for approximately 55% of cellular LPWAN connectivity revenues in 2027, due to continued strong growth in NB-IoT deployments. The rest of the world will see LTE-M edge NB-IoT in terms of connection installed base, reaching 51% market share by the end of the forecast period, due to LTE-M's more direct incorporation into cellular standards.
Cellular LPWAN Roaming to Gain Traction from 2024
International roaming is a critical factor in supporting the growth of NB-IoT and LTE-M, and the lack of widespread roaming agreements thus far has hampered the growth of cellular LPWAN outside of China. Nevertheless, this landscape is changing, with an increasing number of agreements having been concluded to facilitate regional roaming.
Europe is expected to become a key LPWAN roaming region, with roughly a third of all LPWAN connections roaming outbound by the end of 2027.
Kaleido expects significant traction for roaming LPWAN to build from 2024 onwards, as PSM/eDRX modes are more broadly implemented in roaming agreements. Additionally, this year will see increasing operator migration towards the Billing and Charging Evolution (BCE) standard, which will enhance the opportunity to charge cellular LPWAN connectivity more effectively in roaming scenarios.
Strategy Shifts Needed for Monetisation
Monetisation in general is a problem for cellular LPWAN. With data rates low across the ecosystem, traditional operator monetisation strategies yield little revenue, with the average connection only expected to bring in 16 cents per month in 2022, declining to less than 10 cents in 2027 and approaching $1 per year on average for LPWAN connectivity.
Operators and connectivity providers must embrace initiatives such as BCE and VAS enablement in order to make this area of the IoT more profitable, and thereby increase investment in the sector.
James Moar, Principal Analyst at Kaleido remarked: "LPWAN has a delicate balancing act to maintain. Data-based monetisation has been shown to be uneconomical for network operators. Connectivity providers need to look to the BCE specification, non-cellular billable metrics and VAS to make LPWAN a more lucrative opportunity, while keeping the costs of connectivity itself low enough to keep the technology appealing to end users."
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About Kaleido Intelligence
Kaleido Intelligence is a specialist consulting and market research firm with a proven track record delivering telecom research at the highest level. Kaleido Intelligence is the only research company addressing mobile roaming in its entirety, covering:
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Research is led by expert analysts, each with significant experience delivering telco research and insights that matter.
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