Sunday, 5 June 2011

Neul's new kid on the RAN block faces challenges but there are opportunities

Machina Research recently hooked up with the ever-excellent Mobile Europe magazine to produce their Insight Report supplement which dives into a particular theme in depth. For the June/July issue the focus is on M2M. As part of the work I interviewed a lot of people about the evolution of the market. To get the whole thing you'll need to read the report but I thought I'd flag up an interesting interview with newcomers Neul. Here's the gist.

There is a new potential competitor to these established WWAN technologies (GSM/GPRS/EDGE, 3G, LTE) in the form of Neul’s new open standard, “Weightless”, which is specifically aimed at M2M. There is a real need for an M2M-specific WWAN standard according to Neul’s CTO William Webb: “There is no ubiquitous low-cost low-bandwidth M2M network standard. Cellular just about cuts it, but it’s high power, bulky, complex and expensive. GPRS has been around for 15 years and has failed to address the opportunity and with 3G and 4G the operators are going in the wrong direction”. With a battery life of 5-10 years and an expected price point of “a couple of dollars” the new standard does overcome some of the hurdles with traditional WAN technologies.

However, there are some continuing barriers. Unlike existing WAN technologies, there are no existing deployments today although Webb anticipates that roll-out is relatively cheap and easy: the UK would require around 5,000 base stations to achieve 99.7% population coverage. Neul are even prepared to deploy the first network themselves: “The goal is to license our technology to multiple operators around the world” said Webb, “but we may need to deploy the first network, in the UK, to get interest going”. As noted above, it cannot cope with high bandwidth applications such as in-car entertainment. Also, Weightless uses unlicensed spectrum although Webb claims the frequency hopping used by the technology mitigates the risk from other users of the spectrum. In the event that the band does become too crowded Neul also has a strategy to migrate to licensed spectrum. The new standard also has high latency, typically around one second, which is higher than existing WWAN standards although Webb points out that many M2M applications don’t need very low latency when you dig into it.

So do I think Neul is the solution to all of M2M's problems? Of course not. M2M encapsulates a diverse range of applications, all with different needs. There is no single network technology that would be appropriate for every application in every circumstance. Some need coverage, some need capacity, some low latency, some low cost. Even within applications or indeed within a single connection there will be multiple technologies used. Smart metering for instance will use WWAN, powerline, short range or a combination of them depending on circumstances. When the technology answer is 'horses for courses' then a new technology with characteristics that set it aside from the alternatives has an opportunity. Then it just becomes about costs. Is it affordable to deploy and run a network given the amount of revenue that can be generated by the applications that will run on it? Existing WAN networks have the advantage that they are already installed and have profitable services running over them. Supporting M2M has a negligible cost. Deploying a whole new set of infrastructure to support M2M services has radically different economics. That is where Neul will stand or fall.

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