Cellular LPWAN to Generate Over $2 Billion in Recurring Connectivity Revenue by 2027

     A new report from NB-IoT and LTE-M: Strategies and Forecasts states that China will account for about 55% of LPWAN cellular revenue in 2027 due to continued strong growth in NB-IoT deployments. As LTE-M becomes increasingly tightly integrated into the cellular standard, the rest of the world will see an installed base of NB-IoT connections at the edge of LTE-M reaching 51% market share by the end of the forecast period.
     International roaming is a key factor supporting the growth of NB-IoT and LTE-M, while the lack of widespread roaming agreements has so far hampered the growth of cellular LPWAN outside of China. However, this is changing and more and more agreements are being made to facilitate regional roaming.
     Europe is expected to become a key LPWAN roaming region, with around a third of LPWAN connections roaming by the end of 2027.
      Kaleido expects LPWAN roaming networks to have significant demand starting in 2024 as PSM/eDRX mode is more widely implemented in roaming agreements. In addition, this year more operators will move to the Billing and Charging Evolution (BCE) standard, which will enhance the ability to more efficiently charge LPWAN cellular connections in roaming scenarios.
      In general, monetization is a problem for cellular LPWANs. Traditional carrier monetization strategies generate little revenue due to lower data rates in the ecosystem: in 2022, the average connection cost is expected to be only 16 cents per month, and by 2027 it will fall below 10 cents.
      Carriers and telecom service providers should take initiatives such as support for BCE and VAS to make this IoT field more profitable, thereby increasing investment in this area.
      “LPWAN needs to maintain a delicate balance. Data-driven monetization has proven unprofitable for network operators. Telecom service providers need to focus on BCE specifications, non-cellular billing metrics, and value-added services to make LPWAN a more profitable opportunity while keeping the cost of the connection itself sufficient low to keep the technology attractive to end users.”