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As a mainstream operator in the global operator group, NTT DoCoMo’s move will have a certain impact on the entire IoT industry.

Editor’s note: This article from the micro-channel public number “Things Intelligence” (ID: iot101) , of: Zhao Xiaofei.

Introduction

On March 30, NTT DoCoMo, the largest telecommunications operator in Japan, announced on its official website that in consideration of the current business environment, in order to focus on operating resources, the company decided to stop NB-IoT services on March 31, 2020. . As a mainstream operator in the global operator group, NTT DoCoMo’s move will have a certain impact on the entire IoT industry.

On March 30, NTT DoCoMo, the largest telecommunications operator in Japan, announced on its official website that in consideration of the current business environment, in order to focus on operating resources, the company decided to stop NB-IoT services on March 31, 2020. .

As a mainstream operator with a significant position in the global operator community, this move by NTT DoCoMo will have a certain impact on the entire IoT industry. Former Gartner research vice president Matt Hatton tweeted that “this is big news because this is the announcement by leading operators to stop NB-IoT services in the third largest economy in the world.”

What impact will NTT DoCoMo stop NB-IoT services have on the NB-IoT industry? In my opinion, although under the influence of NTT DoCoMo, other overseas operators may opt out of NB-IoT services in the future, but the main development trend of NB-IoT will not be affected by these choices.

Why do you say that? We can analyze from the following three aspects

1. The head effect of the cellular IoT, NB-IoT is more obvious, and partial withdrawal does not affect the overall situation.

Global operators are the absolute mainstay in providing cellular IoT connection services.As the core source of connections outside mobile phone communications, the Internet is also an important source of revenue. However, from a global perspective, the cellular IoT presents a very obvious head effect, and most IoT connections are concentrated in a few operators. Although the value of connection pipelines is decreasing, for operators, first of all, there must be large-scale connections before it is possible to explore large-scale benefits.

The data released by Counterpoint, a well-known market research institution, shows that in the first half of 2018, the top 10 global operators occupied 83% of the global cellular IoT connection, and the top 5 manufacturers occupied the global cellular IoT connection. 73% share, while the top 3 vendors account for 60% of the global cellular IoT connection. This concentration will be further strengthened by 2025.

Proportion of cellular IoT connections of major operators (Source: Counterpoint, IoT think tank mapping)

Observe that the top ten manufacturers occupying the vast majority of the global market are all operators from China, the United States and Europe. The top three operators are China’s three major operators. After more than a decade of development, with the help of demographic dividends, the three major domestic operators in mobile users or fixed network users are beyond the reach of other operators. There is no suspense for the number of IoT connections in the top three; Vodafone, as the operator with the widest business scope in the world, has become the head operator of the IoT with its unparalleled “one point access, global service” advantage; There are several operators in the United States, and two European operators, Telefónica and Deutsche Telekom, are similar to Vodafone and have global markets.

In general, Chinese and American operators mainly rely on their huge domestic markets to rank in the top ten, and European operators rely on international operations, covering Europe, Africa, South America, Southeast Asia and other places, and also occupy a place in the global IoT connection market. . Among the global telecom operators, the top ten companies account for 83% of cellular IoT connections, and the other hundreds account for only 17%. By 2025, the proportion of other hundreds of operations will further drop to 13%, and the head effect will be increasingly obvious. For operators, when the most basic guarantee of the number of connections cannot be reached, how to realize revenue? Therefore, it is certain that, with the exception of a few head operators, most operators cannot obtain the dividends of the development of cellular IoT.

As part of the cellular IoT, NB-IoT will inevitably have a head effect. Although there is currently no specific NB-IoT connection data for mainstream global operators, according to public data, as of January 2020, the number of global NB-IoT connections exceeded 100 million, and by February 2020 China’s NB-IoT connections exceeded 100 million It is certain that most of the NB-IoT connections are concentrated in the Chinese market, and the head effect is more obvious.

From this perspective, the three major operators in China and a few mainstream operators, such as Vodafone and Deutsche Telekom overseas, may become the top vendors with the highest concentration of NB-IoT connections in the world, while a large number of other operators have a limited proportion. Under such a background, some operators can withdraw from NB-IoT, and their withdrawal cannot change the overall development trend of NB-IoT, because the core head manufacturers are the driving force of industrial development.

2. Stop the NB-IoT service, but the IoT service has not stopped

According to the latest GSMA data, as of January 2020, there were 129 cellular IoT networks launched by 64 operators worldwide, of which 93 were NB-IoT networks.

Source: GSMA

According to the analysis in the previous section, most of the number of cellular IoT connections will be concentrated in a few head operators, and in the 93 NB-IoT networks, obviously there are a large number of networks that can carry very limited connections. In my opinion, it is not only NTT DoCoMo that will stop NB-IoT services in the future, and other overseas operators may also make the same decision.

This decision is also based on the market-oriented operation of each operator. As analyzed in the previous section, if an operator has very few NB-IoT connections, the cost-benefit status of continuing operations is not ideal, or its contribution to its overall development strategy is limited, then stopping NB-IoT services is also a normal rational business decision. Of course, head operators with a large number of connections will continue to operate as a major strategic business.

In terms of NTT DoCoMo, the company started to provide NB-IoT connection services in Japan in April 2019, and stopped the service in less than a year. But stopping the NB-IoT service does not mean to stop providing IoT services. In its announcement, the company still provides users with LTE-M (eMTC) and Cat.1 services. We also see that in different districtsIn the regional market, most operators will choose between NB-IoT and LTE-M based on their own advantages and regional characteristics. Only a few vendors will deploy both. After all, deploying two networks at the same time faces high costs. Eventually more operators choose to deploy NB-IoT. Each operator has its own way of doing business, and different network system choices represent different ideas for the development of the Internet of Things.

Some analysts also believe that NTT DoCoMo is only suspending NB-IoT. After 5G large-scale commercial use in the future, the 5G mMTC scenario will still need the support of low-power large-connection technology. May be re-enabled.

3. The NB-IoT industry structure is facing reshuffle, and deep application is more meaningful than Guangsha.

As mentioned in the previous section, some operators may still stop NB-IoT services due to business conditions in the future, but these are only the long tail part of the NB-IoT industry structure, which account for the majority of the connection share. Head operators are still the core driving force for the development of the NB-IoT industry. The author believes that the NB-IoT industry structure is facing a new round of reshuffle, and it does not make much sense to pursue the “wide spread network” state of commercial NB-IoT deployed by most operators worldwide. Because of the head effect of the cellular IoT, after all, the future industrial structure may be that 5% of operators occupy more than 80% of the NB-IoT share, so in the future, we should pay more attention to the in-depth application actions of these head manufacturers.

Among these head vendors, Chinese operators occupy the top three indisputably. He had said earlier “ milestone: domestic 5G NB- The number of IoT connections exceeded 100 million and the big connection accelerated . It was mentioned in the article that the three domestic operators have more than 10 million connections, two of which have exceeded 40 million. Among them, water meters, gas meters, fire smoke detection, and electric bicycle anti-theft have achieved more than 10 million connections, while smart manhole covers, smart door locks, tracking and positioning, and smart street lights have more than a million connections. Driven by these large-scale connections, NB-IoT technology and business models in many industries have been thoroughly verified. At the end of 2019, the Director-General of the Ministry of Industry and Information Technology reported on the ideaIn China, the Director of the Information and Communication Department Wen Ku specifically emphasized “adhering to application traction and promoting NB-IoT innovation and development”. It can be seen that policies continue to support NB-IoT.

Among overseas operators, operators such as Vodafone, Deutsche Telekom, and Spanish Telecom will also become NB-IoT head vendors. At present, Vodafone has launched NB-IoT services in 16 countries, and Deutsche Telekom has launched NB-IoT services in 8 countries. Its smart door locks, smart parking, smart meters, water meters, sharing economy and other applications have also reached millions of connections in total. Of course, these vendors are not only opening networks and providing services in multiple countries, but also doing a lot of work to simplify IoT connections.

Taking Vodafone as an example, in June 2018, Vodafone and Deutsche Telekom successfully achieved the world’s first NB-IoT international roaming test in Europe; in October 2019, Vodafone and the US operator AT & T jointly announced that they will NB-IoT network for roaming cooperation. The scope of cooperation includes both AT & T’s NB-IoT network in the United States and Vodafone’s NB-IoT network covering Spain, Germany, Italy, the United Kingdom and the Netherlands. Vodafone also plans to change NB-IoT The network roaming cooperation has been extended to 40 operators worldwide, which means that users only need to sign a contract with Vodafone to use the NB-IoT network of 40 operators worldwide. These actions make the access of NB-IoT more convenient and provide more services for users.

NB-IoT has very obvious characteristics of economies of scale. It can bring value to users on the basis of large-scale connections, which is meaningful to operators. Therefore, during the current reshuffle of the NB-IoT industrial structure, the in-depth application of a few head operators is more meaningful for the overall development of the NB-IoT industry, and it is also the backbone of promoting the development of the industry.

Even if there is an extreme situation, for example, more than 80% of the commercial NB-IoT operators have stopped service or closed the network, as long as the head operators still vigorously promote NB-IoT as a key business , Then the global NB-IoT industry is still developing rapidly. If a network has only a small number of poor NB-IoT connections for a long time, whether to withdraw from the service has no impact on the entire industry. With the development of NB-IoT, the reshuffle of the industrial structure will inevitably take place. The number of connections and service capabilities are converging towards a few head vendors, and some long-tail operators will withdraw from this market.

To sum up, in the context of the global cellular IoT head effect, although NTT DoCoMo is a mainstream operator, it does not have the position of a head manufacturer in the NB-IoT format, and it has withdrawn from the NB-IoT service. The impact on the entire industry is limited. After all, the actions of the few head operators who account for the vast majority of connections represent the development trend of NB-IoT.