MWC18, Part 1: 1NCE IoT Service Named Winner of VDC’s Embeddy Award

by Steve Hoffenberg | 03/12/2018

At this year’s Mobile World Congress in Barcelona, IoT products and services took a giant leap forward. Unlicensed spectrum LPWAN products and services for IoT communications (such as LoRa, Sigfox, and Ingenu) have been available for several years. In prior years, offerings for licensed spectrum IoT services such as LTE Cat-M1 (a.k.a. LTE-M) and NB-IoT were mostly in the discussion and demo stages. Now, the sheer volume of announced IoT wireless modules and services for the licensed spectrum has ramped up, and many are already on the market.

IoT Modules

Mobile IoT Summit
At the annual Mobile IoT Summit which immediately preceded MWC this year, dozens of modules were on display (see photo), from vendors including AT&T, Cheerzing, China Mobile, Fibocom, Gosuncn, H3C, Hisense, Lierda, LinkLabs, MobileTek, NimbeLink, Pycom, Quectel, Ruijie, Sercom, Sierra Wireless, SIMCom, Telit, ublox, and ZTE.

IoT Modules

Some of the Cat-M and NB-IoT Wireless Modules on display at the Mobile IoT Summit


Graham Trickey, Head of IoT for the GSMA (the industry association behind MWC), noted that as of February 2018, there were 41 commercially launched mobile IoT (licensed spectrum) networks worldwide, and Cheng Zhu, President of Huawei’s Cellular IoT Product Line, said he expected 100 such networks to be operational by the end of the year, serving 150 million connected devices (primarily in China).

VDC’s Embeddy Award
At the main MWC exhibits in the halls of Fira Gran Via, IoT was in evidence across the show floors. But one modestly sized booth in particular caught our attention, that of startup 1NCE (pronounced “once”), which announced its licensed spectrum communications service for the flat rate of 10 euros for 10 years, in other words, the equivalent of 1 euro per year (about $1.23 as of MWC). 1NCE is backed financially and technically by Deutsche Telekom, the largest telecommunications provider (by revenue) in Europe. 1NCE will utilize NB-IoT (narrowband) technology, and will also support legacy 2G and 3G technology.

Of course there’s more to the story (described below), but suffice to say that VDC has chosen 1NCE as the recipient of our Embeddy Award for “Best of Show” at MWC. This award does not imply that 1NCE was the best IoT product or service on offer, but rather that it was the most notable and had the potential to have the greatest market impact. (VDC bestowed additional Embeddy awards for IoT hardware and software at the Embedded World show in Nuremberg, which coincided with the dates of MWC.)

Booth

1NCE booth at MWC


Back in January of 2017, VDC published a report entitled, LPWANs and 5G Technologies for IoT Communications. At that time, no NB-IoT modules were yet on the market, the first LTE-M modules had just begun to ship, and the first commercial LTE-M service (from Verizon in the USA) had only launched in mid-December 2016. As initial NB-IoT services rolled out in 2017, their prices were on the order of $10 or more per year per device. Now, 1NCE’s pricing threatens to force every licensed spectrum IoT service provider to recalibrate their expectations for revenue per device.

1NCE openly declares its own pricing as disruptive. Of course, many tech companies routinely describe themselves as disruptive, so the term has become hackneyed, but typically such usage is by companies that consider their technology—not their pricing—to be disruptive. In the case of 1NCE, we have to agree with the disruptive descriptor. 1NCE sets a new bar to which customers of other licensed spectrum IoT services will point, expecting similar pricing. And other operators will face challenges justifying significantly higher prices for similar services.

The praise we’re heaping on 1NCE comes with several caveats, however:

  • The flat rate of 10 euros for 10 years is not for unlimited data, it’s only for up to 500MB, or an average of 50MB per year. While that amount of data will be sufficient for many types of basic IoT devices, such as simple sensors and trackers, other types of IoT devices may require considerably more. And importantly, even for devices with low outgoing data requirements, the need to receive periodic firmware updates could chew up considerable data. 1NCE’s solution to such situations is simply to enable customers to buy another 500MB of data for another 10 euros. That may or may not be a viable solution, depending on the device and the business where it is used.
  • 1NCE’s service is carried on the Deutsche Telekom (DT) infrastructure, currently offering NB-IoT in eight European countries (Germany, the Netherlands, Greece, Poland, Hungary, Austria, Slovakia, Croatia), and the USA (under the T-Mobile brand). DT’s legacy 2G and 3G infrastructure covers even broader territory. However, competing vendors outside of DT’s footprint will feel less pressure from 1NCE’s pricing.
  • As of the MWC show, the 1NCE service was only in a testing phase. The company expects live rollout to occur in July or August of 2018. In that interim, competing vendors could swoop in with similarly priced announcements, stealing some of 1NCE’s thunder.
  • Several other IoT services vendors with whom we spoke at MWC questioned whether 1NCE’s pricing was sustainable. It is a fair question to ask: Can a company stay in business only generating a euro a year of revenue per device? Because DT already had its infrastructure in place for its own NB-IoT services, launching 1NCE effectively involved no CapEx. With little more than outlay for marketing and administrative costs, 1NCE will serve as DT’s trial balloon to test price sensitivity of NB-IoT services. Notably, DT will continue to offer NB-IoT services under its own brand name, using different service plans. For example, it currently offers an “entry package” for 199 euros, which includes six months activation of up to 25 SIM cards in Germany with 500 KB data per SIM. That works out to about 8 euros per year per device, and allocates less data per device than is offered by 1NCE. DT may find that 1NCE is cannibalizing DT’s own IoT data services, and decide to pull the plug on 1NCE. The mere fact that DT chose not to put its own brand name on 1NCE is indicative of that potential. Ultimately, such sibling rivalry could present a greater risk to 1NCE than services from other vendors.

For more on MWC 2018, look for Part 2 of our blog post.

View the 2018 IoT & Embedded Technology Research Outline to learn more.



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