IoT

5G RedCap set to dominate cellular IoT growth, but when?

13th February 2024
Sheryl Miles
0

5G RedCap is poised to become the dominant technology brand for cellular IoT but not until commercial devices are widely available from 2026 onwards.

This growth will be at the expense of 2G as that approaches its sunset in various markets, and the various 4G IoT protocols will still account for the majority of connections for the next few years.

5G RedCap’s two variants, standard RedCap and extended RedCap (eRedCap) are projected to account for almost one third of cellular IoT connections by 2030, at 30.17%. Even then the 4G variants will still dominate the field between them at 68.71% connections, but both 2G and 3G will have virtually disappeared from the scene.

Yet 4G IoT connections will be declining more steeply by then as sunset starts looming in some markets, and it is anticipated RedCap’s surge continuing from 2030 onwards. RedCap is likely to overtake 4G as the leading cellular IoT technology set by 2032 or 2033.

In 2023 4G and 2G had the cellular IoT field almost totally sown up between them, the former on 88.23% of connections, the latter on 10.3%, leaving just a smattering for 3G. But RedCap connections will generate higher revenues when they come on stream and so will account for a greater proportion of that total by 2030. It is projected that RedCap will account for 61.3% of all cellular IoT revenues by 2030, at $16.6 billion out of $27.1 billion, yet only beginning from 2024. This shows up on the plot of IoT revenues per connection over the forecast period.

The first version of RedCap, targeting emerging use cases that require higher performance than the 4G variants but not as much as full 5G NR (New Radio), will account for early RedCap deployments as it becomes more commercially available during 2024. There have already been significant deployments in China, which in 2022 accounted for around two thirds of all global cellular IoT connections.

eRedCap will pick up the pace after it becomes commercially available around 2026, and by 2030 will be taking one third of all RedCap connections. After 2030 we anticipate eRedCap climbing to become the leading RedCap variant because it will have a larger addressable market of use cases, including the 40% of those currently served by 4G Cat-M or Cat-1.

Originally eRedCap was intended more as the second generation of the RedCap technology, which to some extent it is, incorporating further advances in power efficiency. But it is now positioned as a separate category, leaving the first version of RedCap as a more powerful variant appealing to intermediate use cases.

The global cellular IoT dimension is skewed at present by the large number of LPWAN Cat-NB connections, which have competed with the non-cellular LoRa in particular in the smart metering field.

Geographically it is also skewed by China, primarily on the back of large scale Cat-NB deployments. As saturation approaches the gap will narrow progressively, but with equally populous India among those catching up, we envision the APAC region as a whole still accounting for 61% of cellular IoT connections by 2030, at 3.87 billion out of 6.42 billion.

At the lower end of cellular IoT the Cat-NB LPWAN technology is supported under 5G and is included in the forecast. Originally the 3GPP announced that both Cat-NB and the higher performing but more power consuming Cat-M technologies would both continue evolving as part of the 5G specifications. In the event the Cat-M work has been incorporated in RedCap, specifically under the eRedCap variant.

But Cat-NB is still being developed separately, with key objectives including full alignment with 5G NR and support for Non-Terrestrial Networks (NTNs). The last of these is critical for a growing number of IoT applications in remote locations beyond the reach of cellular networks.

There is also work overcoming limitations of Cat-NB, including lack of support for multicast distribution of content such as updates, and precise positioning. Support for transparent roaming is also being added to support LPWAN IoT use cases that require mobility, as well as coexistence with other 5G NR mechanisms as far as possible. It may be that Cat-NB will eventually fold into the RedCap brand.

This is the latest forecast in the RAN Research Archive, which now includes:

  • Network Slicing Market Forecast 2023-2030
  • Small Cell Densification Market Forecast 2023-2030
  • Open RAN Equipment 2023-2030 - Market Forecast
  • Fixed Wireless Access (FWA) 2022-2028 – Market Forecast
  • Energy Use of Video and Mobile Networks – Market Forecast
  • Connected Cars – Market Forecast
  • 5G Network Slicing – Market Forecast
  • RAN Automation – Market Forecast
  • Private 5G Networks and WiFi - Market Forecast
  • Small Cells and Network Edge - Market Forecast
  • Open RAN and Macro RAN – Market Forecast
  • 4G Deployments as 5G Backbone - Market Forecast
  • vRAN and Open RAN Migration - Market Forecast
  • 5G Core Migration - Market Forecast

Rethink Technology Research is an analyst firm that has established itself over its 21-year history as a thought leader in 5G, and all forms of wireless; the entertainment ecosystem and streaming media; the Internet of Things; and energy and renewables.

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