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Telecom service providers are exploring the applications for the Internet of Things (IoT), as an extension of their network access offerings. Demand for IoT gateways, which manage and control complex connected environments by aggregating and transmitting sensor data, are on the rise.

According to the latest worldwide market study by ABI Research, IoT gateway shipments will grow to exceed 64 million units in 2021.

Home automation and security market components will likely account for over 50 percent of all IoT gateway shipments over the next five years. But it’s the mobility and transportation segments — as well as industrial and infrastructure — that are forecast to generate the most revenue for vendors and service providers.

IoT gateway market development

“The home automation and security market relies on gateways for aggregating and orchestrating communications between an increasing variety of home sensors and cloud services,” said Dan Shey, vice president at ABI Research.

However, ABI analysts believe that this segment will only represent around 30 percent of the market’s five-year value. This is because gateways in the home do not have the same requirements for ruggedness, antenna design, and processor requirements as gateways used in industrial and commercial settings.

The higher priced, albeit lower volume, sectors are mobility and transportation, as well as industrial and infrastructure. Emerging IoT gateway opportunities in fleet management are small, but growing.

Companies such as Omnitracs, PeopleNet, and Sierra Wireless and are offering gateways for multi-application communications in fleet vehicles, such as critical event reporting, fault monitoring, and navigation.

The industrial and infrastructure market segment, meanwhile, relies on many traditional markets like smart grid and video surveillance.

Outlook for IoT software and services

Looking ahead, this segment will also benefit from new higher growth markets through applications in the smart cities and manufacturing or process industries.

“There are many traditional names that have been serving the M2M and IoT gateway market for years, such as CalAmp, Cisco, Cradlepoint, Digi International, Eurotech, and Sierra Wireless,” according to Shey.

But these big name players are just a small share of the total supplier base, which includes both branded and white label vendors. According to the ABI assessment, within this growing IoT market, consolidation is not expected anytime soon and suppliers are increasingly turning to software and services to differentiate.

A senior government figure has said the UK must improve broadband services in order to prosper outside the EU.

Speaking to Microsoft’s Transform conference, Matthew Gould, Director of Digital and Media at the Department of Culture, Media and Sport, warned: “As we leave the EU, our future prosperity depends on us being connected, cyber secure, innovation-friendly and digitally skilled. This is a fantastically important mission.”

The government is part way through its Broadband Delivery UK (BDUK) initiative, part of the Department for Culture, Media and Sport. BDUK is aiming to:

1. provide superfast broadband coverage to 90% of the UK by early 2016 and 95% by December 2017.
2. provide access to basic broadband (2Mbps) for all from December 2015 .
3. explore options to provide superfast coverage to the hardest to reach parts of the UK .
4. encourage the take-up of superfast broadband by SMEs to support growth through the Broadband Connection Voucher Scheme (now closed) .
5. improve mobile coverage in remote areas by 2016 .

Broadband access is becoming increasingly vital for businesses and individuals to connect, share, and grow. In fact, a report from the Human Rights Council of the United Nations General Assembly declares access to the Internet a basic human right which enables individuals to “exercise their right to freedom of opinion and expression.”

With coverage on the increase, there’s a growing focus on providing the speed and capacity required to handle the next-generation of demanding applications. One promising technology is G.fast which utilises existing copper lines and yet is able to enable much faster speeds than most are used to.

BT is one leader in the deployment of G.fast and has been conducting trials since May this year. We reported yesterday that BT announced Openreach wholesale pricing for initial services that will deliver speeds of around 300Mbps before a boost up to 500Mbps later on.

“The speed at which you could connect five years ago would not be acceptable now, and what people see as OK now won’t be OK in five years’ time. So we’ve got to move with people’s requirements, and that’s not just speed, it’s latency and quality of service – all the things that make a decent connection. We are going to have to ensure the market is going to have to deliver ever better, faster connectivity. That means moving to giga-fast speeds of reliability that fibre to the premise brings. The market has not been as fast to this as it might have been.”

According to a study earlier this year by Akamai, a content delivery network, the UK receives an average of 11.6 megabits per second, compared with 14.1 in Norway, 15.3 in the Netherlands and 15.8 in Sweden.

With the European Commission setting a target of connecting 50 percent of all premises with speeds of 100Mbps or higher by 2020, Ovum Research believes this will drive a more “aggressive” deployment of G.fast technology in order to help operators meet targets. Such a rapid deployment will lead to Western Europe having more widespread G.fast availability than other regions.

“Other regions are expected to [be] less aggressive in deploying G.fast, with only 3 percent of broadband services in other markets migrating to the platform. Across these regions, the share of fixed broadband subscribers will range between 1 percent and 4 percent.”

The next iteration of G.fast – known as XG-FAST – is being developed by Bell Labs and broke the previous broadband record in tests with 10Gbps speeds.

Culture Secretary John Whittingdale said: “The UK already leads Europe when it comes to superfast broadband coverage and speeds, with around 40,000 more homes and businesses getting access every week thanks to the government rollout.”