Can China Mobile’s “Big Connection” strategy support the future of the industry?

China Mobile is the first operator in China to explore the Internet of Things business. In 2010, it established an Internet of Things base in Chongqing, and since then, its business has started to scale up. In 2012, it invested in the establishment of China Mobile Internet of Things Co., Ltd., which specializes in operating a dedicated Internet of Things network and promoting the large-scale application of the Internet of Things in various industries. This marked the beginning of the mobile Internet of Things ecosystem.

"NB-IoT has a bright future." Zhou Yajun believes that NB-IoT has many advantages over LoRa.

Among low-power wide-area technologies, LoRa is advancing hand in hand with NB-IoT, and the competition between the two has never stopped. Facing the rising popularity of LoRa, Zhou Yajun expressed his optimism about NB-IoT. He said that in terms of network coverage, NB-IoT wide-area coverage has become a trend, while LoRa is difficult to cover continuously; in terms of stability, NB-IoT is a licensed spectrum and is relatively stable, while LoRa is an unlicensed spectrum and is susceptible to interference and instability; in terms of chip selection, LoRa chips are monopolized by one company, while NB-IoT chips are open supply channels.

At the same time, in terms of evolution direction, NB-IoT will evolve to 5G, while LoRa will find it difficult to evolve to 5G. From the perspective of the industry ecology, NB-IoT is flourishing, while LoRa is relatively closed.

The number of NB-IoT chip manufacturers has grown from HiSilicon and Qualcomm in 2016 to about 18 at present, with about 20 chip models. As the market scale expands, new chip platforms continue to enter the market.

From 2016 to 2018, the number of manufacturers developing NB-IoT module products increased from about 10 to more than 40. The price of modules also dropped from 80 yuan in 2016 to an average of 30 yuan today. China Mobile predicts that the average price will be less than 20 yuan next year, and the cost will gradually decrease.

China Mobile IoT has even reduced the price of NB-IoT modules to RMB 19.5, and the new price will be implemented on January 1, 2019. According to the trend of NB-IoT, China Mobile IoT has also actively laid out its plans and has established a professional module team with the intelligent module department as the core, benchmarking against the industry's leading companies and striving to create an organizational structure that adapts to market development. As of October 2018, its team size exceeded 200 people, of which product and R&D personnel accounted for more than 70%.

However, Zhou Yajun also said that due to cost pressure, shrinking profit margins and other factors, the module industry is expected to be reshuffled, and module manufacturers with backward production capacity and smaller scale will be eliminated.

"By 2020, we will reach a scale of 5 billion connections, recreate China Mobile, and support the 'Chinese Dream' with the 'Mobile Dream'." Zhou Yajun introduced that China Mobile IoT has formulated its own strategic positioning and strategic goals. China Mobile IoT is implementing the "Big Connection Strategy", that is, to open up a big market, build a big network, consolidate big capabilities and build a big ecosystem, and strive to become a global leader in digital innovation.

Focusing on the strategic goal, China Mobile IoT is laying out the "3+2+N" IoT ecosystem. "3+2+N" refers to the three infrastructure elements of cloud (OneNET), pipe (public IoT), and end (chip module), two customer markets (individuals and enterprises), and N partners. At present, China Mobile IoT has formed an IoT capability that fully covers cloud, pipe, and end.

In terms of "cloud", China Mobile independently developed the industry's mainstream open platform OneNET. It is reported that as of May 2018, the platform has 42.2 million connections, 69,200 users, more than 7,500 corporate users, and 81,000 products carried by the platform.

In terms of "management", in the first half of 2018, the number of IoT smart connections increased by 155 million, reaching 384 million, and IoT revenue increased by 47.6% year-on-year. In addition, China Mobile has also built a new NB-IoT premium network infrastructure.

In terms of the "terminal", China Mobile has launched a large number of communication module products. These products are mainly developed independently, supplemented by joint research and development. The products currently on sale include three series: automotive grade, industrial grade, and consumer grade. It has 9 self-branded communication modules under development, including 3 2G products, 1 4G product, and 5 NB-IoT modules.

In addition, China Mobile also focuses on the design of communication chips. Since the release of the first chip in November 2016, China Mobile has launched a number of chips that support remote upgrades. In 2018, China Mobile released the first chip in China that provides "eSIM+ connection services". This chip is the smallest of its kind and is also designed to meet the needs of miniaturization of IoT devices.

Some people believe that there is no large-scale market for NB-IoT modules. If the bidding is used for mobile phones, cameras, etc., there is no problem and a large number of consumers can use them. But what can China Mobile's 5 million NB-IoT module bidding be used for?

Based on this, China Mobile launched the "NB Strike" special campaign, with the goal of having more than 10 million NB-IoT users in the entire network by February 2019, a 10-fold increase from before the campaign began. During the campaign, the net increase in NB shares exceeded 50%. At present, the "IoT Station" in the campaign has completed 7 provinces, 6 scenarios, and 5 business pilots (smart meter reading, smart parking, smart smoke sensors, smart locks, and smart street lights). It can meet the blind spot filling needs of various scenarios such as basements, factories, exhibition halls, residential communities, and mobile logistics.

Recently, China Mobile launched the NB-IoT smart lock public version and supporting products, which can help traditional lock companies reduce the development cycle by 50%. The smart lock open platform developed based on OneNET will also be open to smart lock companies.

At the same time, for individual household users, China Mobile has also launched packages based on broadband or mobile phone charges + smart security packages. Broadband installation and maintenance personnel can come to the door to install and service smart locks.

In terms of environmental monitoring, China Mobile provides NB-IoT-based combustible gas/water immersion/smoke alarms, PM2.5/formaldehyde/temperature and humidity measuring devices, etc.

In addition, China Mobile's NB-IoT positioning terminal "Electric Vehicle Guardian" helped Zhengzhou's electric bicycles achieve standardized management. This is the first case in the country where NB-IoT technology has been applied on a large scale to the electric bicycle field.

summary:

As can be seen from the above, China Mobile has been continuously increasing its efforts in IoT construction, especially in NB-IoT. The NB-IoT network it has worked hard to build has now been deployed in 346 cities across the country.

When it comes to chips and modules, which are key links in the Internet of Things, China Mobile relies on its advantages as an operator to integrate resources from the industry chain and jointly promote effective cost control for upstream companies such as chips and modules.

If China Mobile relies solely on the meager income from "connectivity", it will not be able to make ends meet. It is also constantly exploring and innovating industry applications with practical significance. How to make money in the era of the Internet of Things is not only a challenge faced by China Mobile, but also a pain point for the entire industry.

The road ahead is still long, and China Mobile needs to continue exploring.

Produced by Global IoT Observer

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