The IoT industry that has been quiet for many years is heating up: some smart city projects have found new breakthroughs with the help of IoT technology. NB-IoT innovation projects such as smart manhole covers, smart street lights, connected vehicles, and shared bicycles are emerging.
From the perspectives of government, industry, and society, China Telecom completed the initial warm-up of the NB-IoT development in 2017. With the entry of Huawei, China Telecom, and Qualcomm giants, investors and entrepreneurs around the industry There are many people coming here. In 2017, the major Internet of Things exhibitions and forums are crowded, and gold prospectors have unlimited visions of the Internet of Things "qianjing", and everywhere they look forward to.
If the prelude to the domestic wide-area low-power IoT NB-IoT in 2017, it will be the main drama of NB-IoT in 2018. In addition to China Telecom, the central stage is crowded into China Telecom and China Unicom;
In November 2017, China Mobile announced a 139 cooperation plan to build a new NB-IoT network. In 2017-2018, it will invest 40 billion to build more than 400,000 NB-IoT base stations, and provide 2 billion yuan in subsidies for modules, and NB-IoT special subsidies. The rate can reach up to 80%, and fully reserve for the 2018 NB-IoT market competition. China Unicom's August 2017 IoT Ecological Conference also released a new NB-IoT strategy.
It is foreseeable that the NB-IoT competition will become more and more fierce in 2018, with more and more participants, and the three major operators will start the "Three Kingdoms" of the cellular IoT, bringing their network resources, capital investment, technology development, product innovation and industry. Alliance forces, enlarge the industry cake, and restructure the new interest structure.
The two keywords that NB-IoT cannot avoid in 2018 are: the battle for scale and the battle for models.
The network economy is an economy of scale. The Metcalfe method is outstanding in the field of the Internet of Things. If the NB-IoT market is not scaled up, there will be no network multiplier effect and it will also lose the corresponding market right to speak. According to public information, domestic cellular The competition structure of the Internet of Things market is roughly as shown in Table 1:
As can be seen from the table above, the scale of China Mobile's IoT connections in 2017 was> 200 million, which is more than the total of 43 million connections of China Telecom and 70 million connections of China Unicom. It has a market share of more than 65% and its network commercial value is the largest. The greatest influence.
In the era of the Internet of Things, the big one is Evergrande, and the strong one is Hengqiang. The scale determines the life and death of an enterprise. In 2017, China Telecom grabbed NB-IoT commercial food for half a year ahead of schedule. In 2018, the competition for NB-IoT will become more intense, and China Telecom's first-mover advantage will not last long.
China Mobile added 120 million connections in 2018, reaching 320 million; China Telecom added 60 million connections and the number of connections exceeded 100 million. China Unicom will not hand over its market share. The new IoT connections in 2018 will be based on NB- IoT-based. Among wide-area low-power cellular IoT connections, low-rate NB-IoT accounts for nearly 60%, as shown in Figure 1:
Figure 1 Distribution of wide area low-power IoT market connections
As shown in Figure 1, according to statistics, most of the domestic NB-IoT connections are applied to the fields of smart cities, smart homes, manufacturing, and sanitation. Related data shows that the domestic NB-IoT scale will be about 600 million in 2020, and it is foreseeable in 2018. The three major operators have placed NB-IoT at the top of their scale, but their development strategies will be different.
China Telecom's development of NB-IoT is competing for the lead. In 2017, China Telecom won the first-mover advantage in the development of NB-IoT, and this advantage will continue in the first half of 2018.
The reason is very simple. Although China Mobile will shift the focus of its IoT development strategy to NB-IoT in 2018, it will take time for the new FDD NB-IoT network to carry out laboratory testing, off-site testing, and commercial use. It is estimated that it will take nearly half a year to prepare This half of the year will be a valuable window of opportunity for China Telecom. It can be said that the first half of 2018 has laid the foundation for China Telecom's NB-IoT competition victory. If it is not a good start, there will be a risk of being surpassed.
The development of China Mobile NB-IoT is striving for industry-led and sustainable development. China Mobile is dominant in the mobile user market (more than 880 million users) and the cellular IoT market (more than 200 million connections), but lags behind in the NB-IoT field.
In the second half of 2017, China Mobile invested heavily in NB-IoT competition, collected 1.11 million NB-IoT antennas in advance, and tendered 146,000 base stations. China Mobile ’s huge investment was directed at the dominant position in the industry and quickly gathered many in the industry chain. Ecological partner.
The development of NB-IoT is also the need for China Mobile to focus on the future and sustainable development. At present, China Mobile's cellular IoT connections are mainly 2G and 2.5G, accounting for more than 80%. The global 2G network is facing a wave of withdrawal. With China's 2G network Withdrawing from the network, China Mobile is facing tremendous pressure to migrate tens of millions of 2G IoT connections to NB-IoT and eMTC.
2018 is the first year of large-scale new construction and commercial use of China Mobile's NB-IoT. It is also the initial year of planned migration of 2G stock connections. If you cannot effectively balance between 2G and NB-IoT, there will be "right-handed The embarrassment of “beating each other”, with the cost of NB-IoT modules approaching the level of 15-20 yuan / chip for 2G modules in 2018, it is inevitable that China Mobile will guide the orderly migration of IoT users.
In 2018, China Unicom's NB-IoT will largely follow the strategy. As of now, China Unicom has not seen a major layout. It remains to be seen whether there will be any major moves after the Spring Festival.
In the LTE era, traffic management, the greater the network traffic, while the value of unit traffic continues to decline, it can still achieve a price-for-quantity exchange to obtain high-speed and large-bandwidth traffic dividends. NB-IoT is a low-cost, low-rate, low-frequency, low-traffic LTE service. Its operating law is opposite to 3G / 4G. There is a well-known income distribution in the NB-IoT industry, as shown in Figure 2:
Figure 2 Revenue distribution of the NB-IoT industry chain
In the above figures, the connections only account for about 12-15% of them. The billions of IoT connections cannot bring expected benefits to operators. From the publicly disclosed IoT revenue data, the three telecom companies ’ The revenue of the Internet of Things does not exceed 1% of the main business revenue, and the highest proportion of global Internet of Things revenue is only 10%, which is achieved through acquisitions.
The value of the IoT connection is low, and it is necessary to jump out of the traffic operation model and extend to the upstream and downstream of the IoT industry chain, such as upstream terminals and modules (20-25% of the value); or want to extend the downstream of the industry chain (platform + Industrial value of application solutions accounts for 60-70%) Carry out new business model innovation; or complete the end-to-end connection of the Internet of Things, and provide integrated intelligent solutions for the Internet of Things. The current cellular IoT business models are mainly as shown in Figure 3:
￼Figure 3 Business model of cellular IoT
As shown above, the core of the NB-IoT model battle for operators in 2018 is to get rid of traffic and connection-based profit models:
The first is to explore the upstream expansion of the industry, carry out the sales and lease of IoT terminals / modules, and obtain equipment sales revenue;
The second is to explore the downstream extension of the industrial chain and provide vertical industry customers with IoT solutions, API open platform calling services, or IoT data services, etc., to obtain continuous operating or technical service income.
A successful practice is that China Telecom's estrus monitoring IoT cloud platform "Little Shepherd" business for the dairy industry is shown in Figure 4 below.
Figure 4: China Telecom's NB-IoT Little Shepherd Business Model Innovation Practice
As shown in the figure, in addition to NB-IoT IoT connection revenue:
The first is to cooperate with dairy monitoring integration service companies to reduce the cost of IoT sensor terminals by collecting cow monitoring collars, and to sell on telecommunication channels to obtain the difference in sales of IoT terminal sales.
The second is to provide IoT cloud integration services, such as cloud dedicated lines, Tianyi Cloud and IOT platform services, which connect millions of dairy collars to the IOT cloud platform and Tianyi Cloud resource pool, and use cloud dedicated lines to implement end-to-end solutions for estrus in cows. Service-based comprehensive income.
The third is to provide monitoring and Internet of Things data services to help dairy companies improve milk production efficiency, raise scientific breeding and breeding levels, promote the integration of new Internet of Things technologies with the real economy, achieve customers, and obtain continuous operational value-added benefits.
The battle for scale and the model are actually the "left and right legs" of NB-IoT development in 2018. The expansion of the scale only opened the left leg. While expanding the scale of IoT connections, it does not necessarily bring IoT business value. The innovation of the business model of the Internet of Things is the right leg of a step forward.
The strong driving force for the development of NB-IoT in 2018 is the market and the guidance of commercial interests. As shown in Figure 2 above, the IoT industry is divided into four modules: chip module, connection, platform, and application solution, which respectively correspond to the industrial value. Up, middle, and downstream of creation are related to each other in terms of supply, conduction, and demand.
Entering 2018, the battle over the scale and mode between the three major operators will bring a new pattern of benefits to the upstream and downstream of the industrial chain, and will affect the industrial ecology to a certain extent.
First, the competition for scale is good for upstream manufacturers. In 2018, the scale of NB-IoT will exceed 100 million shipments, which means development dividends. For example, giants such as Huawei and Qualcomm control most of NB-IoT patents; TOP10 of Qualcomm, Huawei, MTK and other chips Enterprises will usher in great development. With the large increase in shipments, the unit price of chips will be lowered, which will stimulate the scale of NB-IoT modules and terminals. Sunsea Communications, Gaoxin, Qijun IoT, Guanghe NB-IoT orders from TOP10 module companies like Tongtong will increase significantly.
The development tide of NB-IoT is coming, and the experience for different companies is different. It means a development bonus for giant companies and may face shuffling for SMEs, especially those small and medium-sized chips that have not made sufficient preparations and business plans in advance. Module companies, Dongfeng of NB-IoT in 2018 will blow these companies to the ground.
Secondly, the model competition is beneficial to vertical application partners in the downstream of the industry, especially leading companies in the segmented field, and comparative advantage companies. The three major operators in the IoT potential market will inevitably carry out various forms of close cooperation with terminals, enabling platforms and traditional enterprises in segmented industries, such as equity investment, standard alliances, R & D cooperation, resource exchange, Strategies such as exclusive agreements and channel reuse are different from industrial alliance cooperation. In the future, close cooperation in vertical industries will transform the contract relationship between A and B into a mutual interest relationship, and become a "win-win, sharing, symbiosis" horizontal interest cooperation relationship.
There are countless partners in the field of vertical subdivisions, such as Sanchuan Wisdom in smart water meters, Ningbo water meters and other small and medium-sized technology innovation companies; smart agriculture fields such as Auto, Yunyang Data, etc. Other vertical application companies include Fanger Technology, Huali Technology, iSoftStone, Hyman Technology, ADLINK Technology, etc.