Long distance and low power communication for logistics

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Today, we transport goods throughout the world over long distances and between countries and continents. What matters in the logistic world is for the products to reach the customers on time and undamaged, while continuously optimizing the capacity and efficiency of all assets. Wireless based Machine-to-Machine (M2M) communication technologies represent a prospective solution in achieving these goals.

At present, cellular technologies such as 2G (i.e. GSM with GPRS/EDGE), 3G (HSPA, HSPA+) and LTE have proven to be a popular choice for M2M communication. Especially in the transport and logistics industry, which has a need for long distance communication. Scalability, availability, interoperability and high bandwidth are some of the critical elements for long distance communication to work seamlessly. However, the commercial cellular technology standards are not optimized for M2M, and they struggle to fulfill requirements of the new Internet of Things (IoT) businesses such as extended battery life, cost effective coverage, lower device cost and support for a massive number of devices.

It is also worth mentioning that the 2G (GSM) network is expected to become obsolete before 2020. Many operators around the globe have already started to work on the master plan for the complete switch off of GSM network. This development will allow the telecom players to use the GSM spectrum for the 3G/4G network more efficiently as the carrier efficiency of 3G/4G is much higher than 2G technology. As a benefit, operators will be able to carry more data (and therefore more customers) and hence generate more revenue.

Undoubtedly, the needs of the IoT/M2M industry will drive the future wireless technology standards due to its sheer amount of market potential. McKinsey estimated the total IoT market size in 2015 was up to USD 900 Million, growing to USD 3.7 Billion in 2020 attaining a 32.6% CAGR. According to the forecasts of the consulting firm, the Internet of Things (IoT) has a potential economic impact of $2.7 to $6.2 Trillion until 2025.

forecast-iot-industrySource: McKinsey& Company Global Institute Analysis 2016

That Internet of Things is setting new standards already evident in the telecom industry, as we can see that Low Power Wide Area (LPWA) technologies get materialized. LPWA technology is mainly tailored to the needs of the machine to machine communication with the promise of extended battery life, lower device cost and larger coverage as well as support for a large number devices. Hence with LPWA overall lower capital expenditures and operating expenses during the product lifetime are expected. At present, there are two original versions available, namely licensed cellular based and unlicensed proprietary LPWA.

Three separate tracks for licensed LPWA technologies are being standardized in 3GPP:

  • LTE for Machine type communications (LTE-M)
  • Narrow Band GSM (NB LTE-M)
  • Extended Coverage (GSM EC-GSM)

3GPP latest releases have introduced and will continue to add several techniques to improve the performance of IoT applications based on LTE. One example worth mentioning here is the improved Power Save Mode (PSM). In Release 13, 3GPP has introduced enhanced Discontinuous Reception (eDRX), which will provide up to 10 years of battery lifetime for end devices.

Besides providing extended battery life, the latest LTE releases will have other improvements. For instance coverage improvement via new coding (seven times for LTE-M and 10 times for NB IoT compare to standard LTE), lower device cost by simplifying the RF modules, lower deployment cost by making Narrow Band IoT systems compatible with standard LTE and therefore reuse the same hardware and share spectrum without coexistence issue. EC-GSM is also expected to bring similar benefits to the legacy GSM system.

New releases for LTE/4G optimized for IoT

New releases for LTE/4G optimised for IoT

For unlicensed LPWA, new proprietary radio technologies provided by for example SIGFOX and Lora, have been developed for the sole purpose of M2M communication with very limited demands on throughput, reliability or quality-of-service.

The goal of the Lora Alliance, LoraWAN adopters, and SigFox is that mobile network operators adopt their technology for IoT deployments over both cities and nationwide low power, wide-area networks. Sigfox wants to become a global Internet of Things player. The company owns all of its technology; from the backend data and cloud server to the endpoints software. But the differentiator is that SigFox is essentially an open market for the endpoints. SigFox endpoints use commodity MSK radios, and they are relatively inexpensive.

In contrast, the Lora Alliance is more open than SigFox, strictly because of the rather open sourced specification that governs how the network is managed. Any hardware or gateway manufacturer can build a module or gateway that conforms with the Lora specifications. Lora is likely the better option if you need bidirectionality and a higher network density. Unlicensed LPWA hasn’t the coverage of network operators yet, but it can save costs for communication if you install this on critical zones of your supply chain like terminals and urban areas.

The unlicensed proprietary IoT technologies are gaining momentum in the market and competing with licensed provider-depended technologies. It is too early to give any prediction of which technology will be dominant in the M2M market. In the case of mobile, the technology is primarily there to make money for network operators. It needs to be reliable enough to sell contracts, which is the return for infrastructure investment.

In addition to LPWA, embedded SIM (eSIM) technology would bring additional benefit to the M2M market sector. With this technology, SIM card will be built-into the end device as a fixed hardware component. They can be remotely programmed to support different operators’ profiles or switch between them. While SIM-less solutions are already possible with Lora and Sigfox, LTE-M and NB IoT technologies will also be introducing embedded SIM solutions shortly. As a result, operational costs are likely to decrease significantly.

One study predicts that the SIM-less solutions would cost merely 1 to 20€ per year per connected device. Compare this to 30 to 75 € per year for an SIM-based solution. During the next decade, the eSIM will replace the SIM based M2M communication and will be the enabler for more advanced and cheaper logistics and telematics solutions.

Lastly, we would like to highlight that the EU parliament made a historic decision to cut the roaming charges significantly. That means that the cost of data transmission within Europe will be considerably less (maximum two cents for a text message). Therefore, the operational cost for tracking infrastructure will decrease dramatically.

In the future, 5G networks are projected to switch on from 2020 or earlier. 5G will be a real pillar for all IoT applications as it promises many advantages over LTE/LTE-A such as higher scalability, improved energy efficiency, increased coverage, etc.

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