Post written by:

Bertrand Copigneaux

Head of the R&D Practice

The development of critical IoT is mainly a B2B and B2B2C demand that will be strongly driven by the digital transformation of the vertical industries.

A pure B2B market

These developments are of interest to many industries, ranging from automotive, manufacturing, health, energy, public services. Indeed, and contrary to traditional cellular technology development (which relies heavily on consumer markets). The global market is thus limited in volume, with an estimated 60 million units by 2030, but it will be compensated by high ARPUs as the technology will meet a critical demand in many industries generating important cost reductions and new revenues opportunities.

  • The leading markets in volume will be automotive, in which the development of the most advanced autonomous cars will use critical IoT capabilities to perform tasks such as complex intersection control, dynamic area management, and cooperative cruise control and platooning. The automotive industry is already strongly involved in the standardisation process of 5G with the establishment of the 5G Automotive Association (5GAA).
  • Other verticals of importance include connected health in which critical IoT capabilities promise the general application of remote and/or robotics surgery.
  • Manufacturing will also be strongly impacted, as critical IoT capabilities are one of the building blocks of the smart factory (enabling advanced automation and remote control).

The development of critical communication capabilities will be an essential enabler for the development of the Internet Of Things (IoT). It will enable IoT use cases to go beyond data collection and to respond to complex scenarios which require precise actuation, automation and mission-critical communications. The requirements of critical IoT communications are numerous and diverse, ranging from an increased reliability and resilience of the communication network to ultra-low latencies and high capacity. They will also need to integrate the context of the mission with the ability to respond to strict energy-efficiency constraints or to cover large outdoor areas, deep indoor environments or vehicles moving at high speeds.

5G as the main horizon for critical IoT

Starting from LTE Advanced, cellular communication standards have begun to respond to these requirements by developing new technologies. The first developments are opening new possibilities, especially for public safety operations, but they are still limited in scope. They notably lack the ability to provide the ultra-low latencies required by many critical use cases. The development of 5G is seen as the key opportunity to enable critical IoT communications, and indeed many of the planned 5G features (from network slicing and massive MIMO to new messaging services, cellular vehicle-to-everything or improved relay capabilities) provide very significant advances for critical scenarios, including reliable, low latencies. Highly dependent upon both the creation of new technologies and the deployment of new communication networks (requiring both important investments all along the value chain), critical IoT capabilities are unlikely to be widely available before 2025.

Disruptions in the communication ecosystems

These promising prospects are attracting many players to examine and prospect their future place in the critical IoT market. The capabilities of 5G will indeed lead to more complex value chains with more players providing connectivity and bundling connectivity with vertical-specific services. It is seen by telcos as an opportunity to diversify and offer vertical-specific services. The rest of the value chain is also eager to benefit from new revenues: from equipment providers betting on small cell networks, to OTT players looking over unlicensed networks or pure vertical players integrating connectivity in their new services.