Fragmentation, EU to influence growth of cellular IoT, claims new report

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The European cellular IoT market is becoming increasingly fragmented and subject to influence from EU policy decisions, a new report has claimed.

In the latest report predicting the evolution of the Internet of Things, ABI Research said there would be 416.5 million connections by 2023, up from 86 million at the end of last year.

Ryan Harbison, Research Analyst at ABI Research, said cellular tech such as NB-IoT and LTE-M would continue to face pressure from non-cellular tech such as Sigfox and LoRa.

He recommended operators worked harder on defining specific use cases and value-added solutions to offer customers more than conventional connectivity. He added there needed to be a greater focus among operators on understanding their customers' businesses to identify the opportunities for the tech.

[Read more: Deutsche Telekom, Vodafone in Europe's first NB-IoT roaming trial]

Another factor affecting the growth of the sector was European Union initiatives and regulations. The report found that 67.4 percent of the 86 million cellular connected devices last year related to telematics, driven by the EU's eCall initiative that requires new vehicles to transmit data in the event of a crash.

Additionally, 22 percent of connections related to smart city and infrastructure deployments, which ABI said was being driven by the EU's Smart Grids Task Force.

Harbison said: “European operators are largely realising that connectivity is the lowest common denominator and are shifting their focus to the long-term value these connections generate.

Vodafone’s M2M strategy is focused on putting a greater emphasis on its own cloud services than on just the connectivity component, while Deutsche Telekom and Orange have opened IoT labs to develop and test application-specific IoT prototypes.

"By focusing on these new technologies and market opportunities, European network operators can maximise the value that their connections and solutions provide.” 

A separate report last month said NB-IoT will be the dominant cellular IoT technology, with almost four times as many shipments as LTE-M chipsets.