Does China Have an Unfair Competitive Advantage in IoT?

Here are the folks at research firm Rethink Research discussing Huawei’s warning that this LTE NB-IoT hype is just a little overdone and that the technology for now is mainly for smart meters.

The warning about NB-IoT use case limitations is something I’ve mentioned previously, but what caught my eye was some stark differences on pricing.

As I mentioned last week, Verizon announced plans to charge $2 per month for its entry level (i.e. smart meter/once per day message) per LTE CAT M1 endpoint in the USA, but this is positively affordable compared to Deutsche Telekom’s NB-IoT pricing of EUR 9.95 per month for each connected machine. (!)

I wonder what Verizon and DT customers will think when they learn that China Telecom will charge $0.15 per month per smart meter for its NB-IoT endpoint?

Smart meters will only be transmitting incredibly small amounts of data on an operator’s network. Xujianmin suggested that China Telecom will be charging $0.15 per month per smart meter device connection.

Now, applying pricing in China to pricing in the U.S. and Germany is not necessarily apples-to-apples, and China may simply be selling NB-IoT services below cost in order to grab market share, stimulate a nascent industry, etc. But global cellular LPWAN markets are all launching at around the same time, have common infrastructure and silicon providers, and … a 1,333% difference between Verizon in the USA and China Mobile in China is kind of shocking, no? A 7,026% difference between Deutsche Telekom and China Mobile is … beyond shocking.

So either a) China Mobile is radically selling below cost, b) China Mobile has an amazing unfair cost structure advantage vis-a-vis the rest of the world’s carriers, or c) Verizon and DT finance departments don’t do marketing. Whatever the case, I think cellular IoT pricing is one of its biggest challenges, especially in commercial/industrial markets and China Mobile just highlighted this for the world to see.

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