Is LTE the Future of M2M?

Twenty something years ago, the concept of interconnected devices and smart monitoring systems that require less or no human intervention were limited and mostly powered and operated by either large corporations or the government itself. But as technology shifts its focus on the Internet of Things and M2M technology, manufacturers, application developers and even consumers begin to embrace new trends. Businesses also begin to venture into new markets.

The consumer's view of connected products is exemplified through the use of Smartphones, wearable technology, mobile and cardless payment transactions as well as the new connected car technology. However, on a business to business side, the concept of connected devices has become an integral part, embodied in telematics applications, smart grid technology, telemetric applications in the manufacturing and industrial sectors, home security as well as healthcare.

The deployment of machine-to-machine communication has been around for years. And one that propelled its continued development is the involvement of 2G communication networks. Currently, most M2M solutions deployed like smart grids, home security systems and basic telematics utilize 2G networks since it is sufficient for low bandwidth applications. Over 90 percent of existing M2M wireless modules operate on 2G, according to Beecham Research. However, 3G technology has become a standard for most consumer technology products, driven by the increase in demand for smartphones, tablets, dongles and mobile connectivity in general.

Migration from 2G to 3G, the next generation of mobile communication standard, which offers a relatively huge increase in speed, has become inevitable. When one of the major US mobile operators announced the shutdown of its 2G networks, several questions were raised. And some of which were from M2M module operators and providers. Although, 3G offers a good number of advantages. Larger amounts of data are being transmitted and more complex applications across different industries can be supported, the cost of moving 2G to 3G can bring about quite an incremental cost for operators.

However, what comes after 3G may be a totally different matter. It appears that to some, 4G LTE is not what M2M communication and development needs. While it offers better, faster connections for mobile data users and consumers, it may be a different scenario altogether for M2M module providers and operators. Migrating to LTE requires more bandwidth, a powerful hardware premium, band fragmentation that adds cost making it more complex, and inconsistent coverage for mission-critical applications. On the other hand, it is undeniable that many operators and end users are already exploring LTE in their M2M solutions deployment. 4G LTE implementation has begun in some regions in Europe and is now gradually implemented in the US as well.

A report LTE for M2M: The Long-Term Opportunity Begins Now from Heavyreading.com identified that one reason users are considering LTE is for future-proofing. According to the report, they would rather pay a premium for LTE hardware as replacing 2G devices when operators decide to shut down their networks could be more expensive. It makes much sense to them as no one really knows how long these 2G networks can remain active. There may be other considerations that the network operations need to take, such as 2G network depreciation and cost to operate them, among others. Another consideration for LTE is its spectral efficiency. With LTE, operators expect to reduce the cost of delivering services that use the current communication technologies. It is expected to help them turn a profit on these applications. Heavyreading.com also noted that prices for LTE modules have already decreased to as low $80 and prices are still expected to decrease by 20 percent annually.

It is true that thousands of different applications, that use M2M technology to leverage the Internet of Things, are planned, some even in testing phase. Some of current ones may have already migrated to 3G and some may be ready to move to the next level. And at the rate that technology is evolving, data consumption and demand are rapidly increasing as well, so it is very likely that LTE will become the new standard, and older technologies will eventually be phased out. LTE will be the future of mobile connectivity, no doubt. But whether LTE is the future of M2M is yet to be seen.