• In China, cumulative NB-IoT connections were around 95 million by the end of 2019.
• The upward trend is poised to accelerate through 2022, the connection of NB-IoT is expected to reach nearly 400 million, growing at ~150% CAGR from 2017 to 2022.
• NB-IoT will become an integral part of IMT-2020 or 5G, addressing the burgeoning demands for low-speed, low-bandwidth connections in utilities, households and industries.

Back in 2017, NB-IoT (Narrow Band Internet of Things) became a reality in China, closely following the readiness of 3GPP Release-13. The standardized low power wide area (LPWA) technology has distinctive advantages in aspects of battery life, chip cost, network capacity and coverage. Such characteristics promote the widespread adoption of NB-IoT in applications of remote control and monitoring.

Exhibit 1: NB-IoT - Best Solution for LPWA

Building on the success of pilot projects, NB-IoT quickly gained traction in public services. With the continued fiscal stimulus and policy support, the burgeoning NB-IoT applications, such as smart gas and water management, are becoming an integral component of smart city developments across China.

By the end of 2019, the cumulative NB-IoT connections surpassed 95 million, representing a net addition of nearly 62 million over 2018, with over 90% of the growth split between China Mobile and China Telecom. Leveraging the end-to-end NB-IoT solution, from eSIM chip to cellular module, from connection management platform OneLink to cloud platform OneNet, China Mobile had caught up with China Telecom, the pioneer of NB-IoT services in China, respectively enabling more than 40 million connections.

Exhibit 2: NB-IoT is Poised to Take off

Currently, the increasing adoption of NB-IoT in public and enterprise services is the main growth momentum, with more proven practices stepping into the large-scale commercialization. The installed base of NB-IoT-enabled smart water and gas metering, fire-fighting, bike tracking had each broken through the 10 million mark.

Thanks to the comprehensive improvements, the new generation of NB-IoT is compliant with 3GPP Release-14 and fits in more use cases, leveraging the faster uplink (150Kbps) and downlink (100Kbps) speed, deeper coverage (3dB enhanced), better mobility (80km/h), as well as the support of cell-based location.

NB-IoT is fast proliferating in diverse segments, such as smart street lighting, smart parking, intelligent manhole covers, smart home appliances, smart door locks, and assets tracking such as vehicles, personnel, pets, etc.

Along with the growing willingness to deploy cellular IoT in utilities, households and industries, as well as the legacy GSM connections gradually shifting to NB-IoT, the narrowband technology is becoming a significant growth point, next to LTE. The upward trend is poised to accelerate through the forecast period, with the penetration of NB-IoT reaching over 26% of cellular IoT connections in 2022. By then, the net addition enabled by NB-IoT will outnumber LTE new connections.

In July 2019, NB-IoT was officially submitted to ITU-R as the candidate technology standard of 5G mMTC (Massive Machine Type Communications), which means NB-IoT will become an integral part of IMT-2020 or 5G. In the new decade of the 2020s, Chinese operators will focus on NB-IoT for the massive low-speed, low-bandwidth connections, with LTE Cat.1 as a supplementary technology to address the voice-centric demands.