Generation shift: the 2020s will see mass adoption of LPWA, growth of 5G and the end of 2G/3G

Matt Hatton

By Matt Hatton, Founding Partner, Transforma Insights

The next decade will see a radical shake up in the cellular technologies used to connect IoT devices, as described in Transforma Insights’ recently published technology forecasts. At the end of 2030 there will be 25 billion connected devices globally, up from 8.7 billion at the end of 2020. The relatively modest compound annual growth rate (CAGR) of 11% belies a lot of interesting changing dynamics in the market.

The first is the growth of new Low Power Wide Area network technologies. Transforma Insights predicts 4 billion LPWA connections in 2030 (up from just 220 million at the end of 2019). Almost two-thirds will be accounted for by 5G mMTC (massive Machine-Type Communications), the new terminology covering those LPWA technologies (NB-IoT and LTE-M), which operate in licensed spectrum. The remaining one-third will be technologies such as LoRa and Sigfox that operate in licence-exempt spectrum. Today LPWA networks are fragmented and growth narrowly focused on a few verticals and countries; China, for instance, accounted for 57% of the global total at the end of 2019.

The next major trend is the growth of 5G. Including the mMTC technologies, 5G will total 3.3 billion connected devices by 2030, up from just 100 million at the end of 2019. It should be stressed that this figure will be dominated by the mMTC technologies (NB-IoT and LTE-M) which account for over 80% of all 5G connections. This is not an overwhelming rush for high bandwidth, low latency connections. This is predominantly a reflection of the re-categorisation of these technologies, and their successors, as 5G.

Hand-in-hand with 5G’s growth will be the decline of 2G and 3G. This is due to two factors. Firstly, the refarming of 2G and 3G spectrum around the world mean that the appeal of choosing these technologies will decline rapidly. While they might continue to be included in multi-mode devices it will be increasingly rare for either of them to be the highest embedded technology and we expect by 2028 that will have stopped entirely. Secondly the aforementioned LPWA technologies will prove easily capable of supporting the same applications that 2G and 3G did, but with lower prices and longer battery life.

Another interesting trend relates to the increasing use of private networks supporting wide area network technologies. Private networks have been in the vanguard of operators and vendors efforts to exploit the opportunity of 5G. While they will remain comfortably the minority of connections, they will be significant: by 2030 6% of 5G non-mMTC devices will be connected to private networks. For LPWA technologies, private networks will be even more significant, accounting for 20% of all connections. The vast majority of this, however, will be accounted for by unlicensed LPWA networks such as LoRa deployed as campus networks. Unlicensed technologies will account for more than 80% of all private LPWA connections.

To find out more about the Transforma Insights forecasts, join us for a webinar “Forecasting the IoT market opportunity 2019-2030” on 2nd November 2020 at 08.00 Pacific, 11.00 Eastern, 16.00 GMT, 17.00 CET.

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