Matt Hatton, Founding Partner, Transforma Insights
The latest iteration of the 3GPP standards for mobile communications, Release 17, includes a new variant of 5G aimed specifically at IoT.
It’s defined as ‘5G Reduced Capability NR’ (or RedCap for short), or sometimes ‘NR-Light’. It’s an interesting evolution, to try to create a lower complexity 5G New Radio device, with the intent of doing for 5G NR what LTE-M and NB-IoT did for LTE. However, with this iteration, and likely for at least a decade to come, it is highly unlikely to have a significant impact on the connectivity technology market landscape. In July 2022 Transforma Insights published a report entitled ‘What is 5G RedCap and how does it fit into the portfolio of cellular IoT connectivity technologies?’ which explained exactly why.
5G RedCap promises to be the 5G New Radio equivalent of the mMTC technologies NB-IoT and LTE-M, delivering on three aims. The first was to reduce the complexity of the devices and therefore the cost. At hundreds of dollars per module, 5G is completely out of reach of all but a very few IoT use cases. That compares to typically USD10-40 for LTE devices, depending on category, and around USD5 for NB-IoT. 5G RedCap has been somewhat successful here, recording a price reduction of perhaps 80%. The second aim was to reduce power consumption. To fill a useful niche RedCap needs to be capable of running of a battery. Reports are that power savings of over 90% are possible. The third aim was to maintain data speeds of at least those of LTE Cat-1. With speed of 85Mbit/s it comfortably does that.
None of these capabilities really opens up a significant part of the market. What is noticeable for anyone looking closely at IoT use cases, as we do in our highly granular IoT Forecasts, is that IoT applications bifurcate, with some requiring high data rates (e.g. CCTV or connected car) and the remainder, accounting for the vast majority of use cases, needing low cost and often battery power. To put it into the terminology of 5G: IoT applications either need eMBB (enhanced Mobile Broadband) or mMTC (massive Machine Type Communications), but rarely both. And today almost nothing demands URLLC (Ultra Reliable Low Latency Communication), certainly not large scale mass-market applications. While there is ‘clear blue water’ between the capabilities of 5G RedCap and other technologies, that doesn’t mean there is a big opportunity there. The question is: is there demand for a mid-range technology? Our analysis suggests not. 5G Redcap ‘falls between two stools’ with middling capabilities that are not optimised for anything.
Furthermore, it’s worth noting that 5G RedCap’s main challenger is LTE Cat 4 which is both faster and cheaper, albeit that RedCap supports lower latency and a greater set of frequency bands. Fast and cheap trumps both of those capabilities, by a long way. And on the question of cost, it falls short of NB-IoT and LTE-M, by an order of magnitude.
There is a logic to adding a lower complexity variant of 5G NR at a more cost-effective price-point, with low power consumption and superior bandwidth and latency. Ultimately, and we’re talking more than 10 years, there will be a need to support low power devices on 5G NR RAN. But for the next decade battery powered cellular IoT will be dominated by NB-IoT and LTE-M. We should note that Release 18 promises some further refinements, but they will need to be very significant to come close to the existing mMTC technologies. We expect something rather more incremental.
Image and article originally from iotbusinessnews.com. Read the original article here.