If the notice on further promoting the all-round development of the mobile Internet of things (hereinafter referred to as the notice) issued by the Ministry of industry and information technology not long ago is an official announcement on the selection of Internet of things connection technologies in different scenes in the future, cat 1 has officially become the “protagonist” of medium speed Internet of things connection scenarios with voice demand. Then, China Unicom’s centralized purchase of 5 million sets of cat 1 chips is a key step to break through the “differentiation” of the Internet of things due to the trend of the times.

When: cat 1 becomes the “protagonist” of medium and low speed scene

The launch of the new deal of the Internet of things further points out the direction of the migration of Internet of things connection technology. It can be determined that after the retirement of 2G / 3G, Nb IOT, LTE cat 1 and 5g will become the “troika” driving the development of Internet of things connection technology in the future, and work together to detonate the IOT industry.

The overall objective of the notice is to promote the migration and network transfer of 2G / 3G Internet of things services and establish a comprehensive ecosystem of mobile Internet of things with the coordinated development of Nb IOT, 4G (including lte-cat1) and 5g; On the basis of deepening 4G network coverage and accelerating 5g network construction, Nb IOT is used to meet the needs of most low rate scenarios, cat 1 is used to meet the needs of medium and constant rate IOT and voice, and 5g technology is used to meet the networking needs of higher rate and low delay; It also clearly guided the new IOT terminals not to use 2G / 3G networks for the first time, and promoted the migration of existing 2G / 3G IOT services to NB IOT / 4G (CAT1) / 5G networks.

According to the division of high, medium and low network rates, the distribution of cellular Internet of things connections is roughly “136”, 10% “high rate”, 30% “medium rate” and 60% “low rate”. The low rate and medium rate scenarios previously involved in 2G / 3G account for more than 90%. The report points out that by the end of 2019, the number of Internet of things connections of the three major domestic operators was about 1.15 billion, 2G accounted for about 42%, and the number of connections it carried was nearly 500 million.

Facing the window period of the alternation of new and old cellular Internet of things connection technology, 2G / 3G withdrawal has entered the countdown. In the future, who will take over the massive Internet of things connection market left after 2G / 3G withdrawal?

After 2G network withdrawal, Nb IOT will meet the needs of large-scale narrow-band low-speed scenarios with the characteristics of wide coverage, low power consumption, low cost and Dalian connection, and will be applied in small data volume and low-speed scenarios such as intelligent meter reading, but NB IOT cannot meet the low-speed scenarios requiring voice; After 3G network withdrawal, 4G LTE and EMTC will be able to carry voice and medium rate scenarios. However, domestic operators are not active in EMTC, and the EMTC industrial chain is not open and robust enough. It is difficult for EMTC to realize network construction in China in the short term. Therefore, 4G LTE will undertake the important task of medium rate connection scenarios of the Internet of things.

Although the rate scenarios in the Internet of things connected by LTE can be supported by cat 1 and cat 4, industries such as public network intercom, sharing economy, financial payment, wearable / tracking, smart energy and industrial control need a certain rate, meet a certain high-speed mobile demand, be sensitive to delay, support voice, and pay more attention to low cost and low power consumption. For the connection requirements of LTE IOT network industry with low requirements for network speed, stability, reliability and low cost, if cat 4 is used to carry it, it is as wasteful as shooting mosquitoes with cannons; Moreover, the current mainstream cat 4 is difficult to meet the above industry needs with high requirements for module cost and power consumption in terms of power consumption and price; Cat 1 takes into account the advantages of performance, power consumption, cost and comprehensive network coverage. It is more suitable for medium speed, especially medium and low speed scenarios with voice requirements.

The launch of the new deal of the Internet of things is equivalent to officially announcing that cat 1 will play a leading role in the medium speed Internet of things connection scenario with voice demand in the future.

Business: 5 million sets of chips are collected for ripening industry

When, the sign of things!

TSR, an industry information agency, predicts that cat 1 will maintain rapid growth. In the global market in the next few years, the average annual shipment of LTE modules will reach more than 80 million units, while cat 1 modules will maintain an average annual shipment of more than 30 million units in the future.

With the introduction of the new deal on the Internet of things, industry users in medium speed, especially in low and medium speed Internet of things scenarios will accelerate their migration to cat 1, and the market scale of cat 1 will also accelerate. China Unicom’s large-scale centralized purchase will not only comply with the development trend of the Internet of things industry, but also vigorously promote the development of cat 1 industry.

The announcement shows that China Unicom plans to purchase 5 million sets of cat 1 chips, place orders in batches according to the actual demand, and the final number of winners is 1. In addition, the maximum price is also limited to US $3.9/set.

Chip is the core link of the Internet of things industry chain. At present, mainstream chip suppliers Qualcomm, Ziguang zhanrui, Aojie Technology (ASR), mobile core, core wing information, etc. have already launched a number of cat 1 chips, which not only reduces the module cost for downstream module manufacturers, but also helps enterprises and industrial users quickly realize the commercialization of Internet of things products.

In an interview with c114, a chip practitioner said that the price of $3.9/set offered by China Unicom was “friendly”. According to the current exchange rate, USD 3.9 is about 27.3 yuan. “The bid price limit threshold is set reasonably. Basically, all enterprises engaged in cat 1 chip manufacturing can participate in the bidding.”

In terms of scale, the centralized purchase of 5 million sets of cat 1 is not a small cake for the industry, which can further boost the development of cat 1 industry. To borrow the person’s evaluation, “this is a good start.”

Although the plate is big, it’s not easy to really eat this cake. What needs to “knock on the blackboard and draw the key points” here is that there is only one final bid winner of China Unicom’s centralized procurement, which also means that the competition will be more sufficient and the price war may be difficult to avoid.

Potential: the way of differentiation of Unicom’s Internet of things

Take advantage of the situation and make things happen!

In recent years, the Internet of things has become a new business growth point for operators. According to the financial report of China Unicom, in 2019, the number of Internet of things connections was close to 190 million, and the revenue reached 3.04 billion yuan, a year-on-year increase of 46%.

According to data analysis, the number of Internet of things devices installed will show explosive development in the next few years. It is estimated that there will be 22.5 billion connected Internet of things devices in 2021. For China Unicom, differentiation is the best way to achieve a breakthrough in the Internet of things.

China Unicom has been active in promoting the development of animal networking. In August 2017, China Unicom’s first pot of gold after the mixed reform hit NB IOT Internet of things, and cooperated with Guangzhou fund to introduce social capital to jointly build a 10 billion internet of things industry fund. It is used for the layout of Internet of things, intelligent manufacturing, industrial Internet and other fields.

However, for China Unicom, Nb IOT has always been a “load-bearing forward”.

Because the bandwidth of 900MHz spectrum resources of China Unicom was only 6mhz before, and the network construction was greatly limited, more than 80% of Nb IOT base stations had to be deployed in 1800MHz band. The coverage of 1800MHz frequency band is much smaller than 800MHz and 900MHz, and the 1800MHz NB IOT industrial chain is not mature. This also means that China Unicom has to make more efforts.

China Unicom has spared no effort in promoting NB IOT. The 2019 financial report shows that China Unicom has opened 200000 NB IOT base stations, and the network quality has been greatly improved. However, the final effect is to open up some gaps with the competition between China Mobile and China Telecom.

By the end of February 2020, the number of Nb IOT connections of the three major domestic operators had exceeded 100 million. From the distribution of operators, the number of Nb IOT connections of China Telecom and China Mobile had reached more than 40 million respectively, and that of China Unicom reached 10 million.

Moreover, the use scenario of 5g is relatively limited at present, which is mainly applicable to the networking requirements of higher rate and low delay. In contrast, cat 1 is the key to the success of China Unicom’s Internet of things business differentiation.

This centralized purchase can be described as the “time” to embark on the new deal of the Internet of things industry. China Unicom can win only by making good use of the situation and taking the road of differentiation. It is reported that the whole LTE network of China Unicom has opened the cat 1 capability, realized the seamless connection of business opening, and has precipitated the industrial Internet practice.

Editor in charge: PJ

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