With SigFox in Crisis, Where Now for LoRa and the LPWAN Sector?

Article By : Nick Wood

In the last couple of months, SigFox, the strongest LoRa alternative, has filed for "rehabilitation."

About two years ago, I predicted that LoRa would be the winner amongst the competing technologies in the low-power wide-area network (LPWAN) sector. To briefly recap, by “LPWAN,” I mean low-power radio technologies aimed at being a “lite” alternative to cellular data technologies, typically using unlicensed spectrum, i.e., cost-free to use. These solutions are targeted at internet-of-things applications. A classic IoT application example is meter reading, wherein the data traffic demands are low and mainly unidirectional (from device to server).

My previous analysis was that the technical difference between the various offerings were not substantial, but LoRa offered the most compelling business model to achieve success. In the last couple of months, SigFox, the strongest LoRa alternative, has filed for “rehabilitation.” This is a French legal status roughly equivalent to the more commonly known U.S. Chapter 11 bankruptcy protection. This is not bankruptcy but a period of creditor protection whilst the company tries to restructure.

Nevertheless, the figures available from SigFox look ugly. They have raised $300 million (a lot of money, but arguably nowhere near enough, given their ambitions), but report net losses of €91 million on revenues of €24 million, as well as debts of €118 million. Whatever emerges from this process is unlikely to be a company or business unit with anything like the same global ambition. Existing customers may hope for the company’s survival, but it is hard to see many new ones wanting to place a bet on it anytime soon.

A few other dramatic market developments

There have not been such dramatic setbacks for other contenders in this space, but neither is there evidence of strong traction. Ingenu, a U.S.-based company, seems to be following a similar business model to SigFox in that it is offering a “one-stop shop.” It claims coverage for its network in a number of U.S. urban areas, but it is nevertheless a long way from offering country-wide, let alone global, coverage. So it seems likely to remain a niche solution.

LoRa to dominate LPWAN future?

LPWAN LoRa

So does that mean everything is set for LoRa to dominate the future of LPWAN? Well, yes and no. The strengths of LoRa remain impressive. Semtech owns the rights to the underlying radio technology, but the development of the networking protocols is driven by a multi-vendor industry body, the LoRa Alliance. Thus, the technology is not tied to the success or otherwise of a single vendor. In addition, Semtech is a well-established company whose fortunes do not depend on LoRa alone. This gives LoRa a resilience that other contenders lack.

Semtech has licensed the proprietary radio elements, meaning even basic transceivers are multi-vendor. Customers can buy devices from a variety of sources, so anyone wanting to prototype or experiment can simply buy what they need and get going without engaging with any particular company. The ability to cheaply set up private networks remains a core strength. It allows easy development and coverage of remote or difficult-to-access spaces, including rural areas or underground car parks. As of today, there is no obvious competitor offering this blend of appeal.

The one evident weakness, again unchanged, is the lack of consistent public network services or a wholly coherent plan to develop one. Particular areas may have good coverage, driven by a private operator, government, or local authority, but anyone looking for national coverage is unlikely to be satisfied, still less someone looking for a global solution. And the flip side of LoRa’s diverse and distributed model is that it isn’t entirely clear who would ever solve this. Network operators can merely pay lip service to supporting this kind of technology whilst primarily promoting use of their expensively acquired licensed spectrum.

LoRa: A stopgap?

The big question remains as to whether LoRa will simply be a stopgap until next-generation cellular data technologies NB-IoT and LTE-M truly take off. The situation here is harder to predict. Nobody can deny the cellular world is collectively a formidable player with massive investment in technology; large, well-financed network operators; and a strong global standards body. There seems little doubt that for many organizations seeking IoT data solutions, the cellular world will be a natural home, particularly those with national or global infrastructure.

Cellular operators as competitors

However, the diverse needs of IoT applications are not always going to be adapted to this kind of solution. Somewhat paradoxically, although the cellular operators are in principle strong competitors, it is not so obvious the LPWAN business is hugely interesting for them, at least yet. Their prime focus is serving data-hungry mobile-phone subscribers. A service with large numbers of nodes consuming relatively small amounts of data is not necessarily something they find easy to make much money out of, so any focus in this area tends to be on large and relatively data-hungry users.

In addition, there has been some progress on LoRaWAN public services. NB-IoT (the most “lightweight” cellular flavor) has gained little traction outside China, and some European operators (notably Orange) have adopted an LTE-M and/or LoRa strategy to cover requirements for data flows. Service providers are finding ways to co-operate on roaming, and there is even discussion of satellite networks to fill in the (typically rural) gaps. There’s still a long way to go to match the cellular world, but there is nevertheless progress.

LoRa well adapted to IoT

In my view, there remains a segment that LoRa is well adapted to, that of diverse IoT applications requiring some combination of low-power devices, awkward environments for cellular coverage, low data rates, and relatively self-contained solutions. It appeals to users that want control over their own service and solution on an ongoing basis. Many small and medium-sized companies will find LoRa better adapted to their needs than an engagement with an operator. Solution providers targeting diverse niches are also likely to find LoRa a useful connectivity tool for applications in agriculture, urban solutions, large building management, and so on. And in cities, public networks are increasingly an option.

Where Now for LoRa and LPWAN Sector?
(Image source: Insight SiP)

Future of LoRa/LoRaWAN ecosystem

So the remaining question is whether this space is large enough to support a strong supporting LoRa/LoRaWAN ecosystem in the long term, or whether the cellular juggernaut will ultimately sweep all before it. There don’t seem to be any other contenders left standing.

The continued growth of LoRa and the support of a diverse range of actors suggests that a cautious “yes” is the answer, and LoRa will become the ultimate survivor as the alternative to cellular solutions.

This article was originally published on EE Times Europe.

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