Matt Hatton, Founding Partner of Transforma Insights
The latest version of the 3GPP standard for mobile communications, Release 17, includes new variations of 5G specifically targeted at IoT.
‘ is defined.5G Degraded NR‘ (Also red hat for short), or sometimes ‘NR light‘. It’s an interesting evolution to try to create less complex 5G New Radio devices aiming to do in 5G NR what LTE-M and NB-IoT did in LTE. However, this iteration is unlikely to have a significant impact on the connectivity technology market landscape, at least for the next decade. In July 2022, Transforma Insights published a report titled “What is 5G RedCap and How Does It Fit into the Portfolio of Cellular IoT Connectivity Technologies?” I explained exactly why.
5G red cap promises to become 5G New Radio on par with mMTC technologies NB-IoT and LTE-M, achieving three objectives. The first was to reduce device complexity and cost. At hundreds of dollars per module, 5G is completely out of reach for all but a handful of IoT use cases. This is typically between US$10 and US$40 for LTE devices and around US$5 for NB-IoT, depending on the category. 5G RedCap has had some success here, perhaps registering an 80% price reduction. The second aim is to reduce power consumption. To fill a useful niche, RedCap needs to be able to run on batteries. Power savings of over 90% are reportedly possible. A third goal was to maintain at least LTE Cat-1 data speeds. It runs comfortably at speeds of 85Mbit/s.
None of these features really open up a significant part of the marketAs we do in our very detailed IoT predictions, it is worth noting for those looking closely at IoT use cases that IoT applications branch out and require high data rates (such as CCTV and connected cars). etc.) and the rest make up the majority. A number of use cases that require low cost and often battery power. In 5G terms, IoT applications require one of the following: eMBB (enhanced mobile broadband) or mMTC (Large Machine Type Communications), but both are rarely used.And today we demand almost nothing URLLC (ultra-reliable low-latency communication), certainly not for large-scale mass-market applications. There is a “bright line” between 5G RedCap capabilities and other technologies, but that doesn’t mean there is a big opportunity. The question is, is there demand for midrange technology? Our analysis suggests otherwise. 5G Redcap is “something between two stools” with moderate capabilities that are not optimized for anything.
Additionally, it’s worth noting that the main challenger for 5G RedCap is LTE Cat 4. This is fast and cheap even though RedCap supports lower latency and more frequency bands. Being fast and cheap far outweighs both of these features. In terms of cost issues, it is an order of magnitude below NB-IoT and LTE-M.
I have logic to add less complex variants 5GNR At a more cost-effective price point with lower power consumption and better bandwidth and latency. Ultimately, we’ve been talking about it for over a decade, there will be a need for 5G NR RAN to support low-power devices. But for the next decade, battery-powered cellular IoT will be dominated by his NB-IoT and LTE-M. Further improvements are planned for release 18, but please note that it will require very significant improvements to come close to the existing mMTC technology. I would rather expect something progressive.
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