LTE and M2M:

Converging Paths
 Introduction
LTE is taking the wireless world by storm. According to the Global Mobile Suppliers
Association (GSA), 49 operators worldwide had launched commercial LTE services as
of January 2012, and 285 had committed to commercial network deployments or were
engaged in trials or technology testing. In fact, LTE rollouts are now happening faster than
expected. According to GSA, by the end of 2012, we can expect 119 commercial LTE
networks operating in more than 50 countries. And, despite early questions about whether
LTE deployments would be limited to high-density areas, LTE has become the de facto
standard for the next generation of cellular networks.

Alongside this unprecedented growth in LTE, however, the wireless world is seeing another
major trend reshape the industry: machine-to-machine (M2M) communications. Just as LTE
can unlock a new world of high-speed wireless applications, M2M promises to transform a
wide range of industries by enabling remote communication with virtually any device—from
cars to coffee makers, oil pipelines to insulin pumps. Yet, while both market trends show
no signs of slowing down, thus far they have proceeded along separate trajectories. Many
in the industry can imagine tomorrow’s connected devices, and can clearly perceive the
benefits of lightning-fast LTE connections. But few seem to be talking about how the two
fit together.

In fact, there are many M2M applications that can benefit from LTE networks right now. But
even for those M2M solutions that don’t require LTE speeds and latency, there are good
reasons to believe that LTE will play an important role in the future of M2M services.

This paper explores the market forces driving original equipment manufacturers (OEMs)
and other M2M stakeholders to consider LTE for connected devices and applications.
It also discusses some of the barriers preventing lower-speed M2M applications from
taking advantage of LTE, and what Sierra Wireless and others are doing to help evolve LTE
technology for a broader range of M2M solutions.

Market Drivers for LTE in M2M

When examining LTE services in M2M, it is important to make a distinction between two
classes of M2M applications: those for which LTE’s high speed and low latency will provide
immediate benefits, and those with less demanding connectivity requirements.

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 High-Performance M2M Applications

In the first category, there are a variety of M2M applications, Four Reasons to Think
especially video applications, that can immediately about LTE for M2M
benefit from LTE data rates up to 100 times faster than 2G • Longevity: The lifecycle
technology. Examples include connected devices performing of older cellular networks
surveillance or transmitting video content. Devices may also is unpredictable, and the
cost of upgrading deployed
combine video services with another form of computing—for
technologies can be exorbitant.
example, a digital sign display that uses network-based facial LTE will support connected
recognition technology to identify the age and gender of the devices in the field for many
person viewing it, and target advertising appropriately. years to come.
• Potentially lower service
But the advantages of LTE go beyond fast speeds. LTE also costs: LTE is much more
supports 10 times lower latency (the time a packet of data spectrum-efficient than
takes to travel between a source and destination) than 2G and previous- generation
3G technologies, which can have an even more significant technologies and less
expensive to operate, likely
impact than throughput on some applications. For M2M
lowering operational costs over
applications where responsiveness is critical—for example, the lifetime of the connected
applications controlling sensitive equipment, industrial alarms device.
and controls, traffic systems, medical devices, and voice- • Scalability: Most LTE
over-IP—low LTE latency can enable connected applications networks deployed today
that would not otherwise be possible. support IPv6, making them
well suited to mass M2M
For all of these applications and others for which speed, deployments that older
responsiveness, and performance matter, LTE can provide a networks cannot support.
superior solution to previous-generation cellular technologies. • Superior performance: For
As LTE network deployments continue to expand around the M2M applications that require
higher speeds and better
world, expect these types of M2M applications to grow as
responsiveness, LTE is an ideal
well. solution.

Lower-Speed M2M Applications

But what about the other category of M2M applications? Many of today’s M2M devices
simply do not require LTE performance. And, since the cost of building and purchasing
first-generation LTE embedded modules remains higher than 2G and 3G cellular solutions,

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 those developing M2M applications may find it difficult to justify investing in LTE. In the
long-term, however, there are good business reasons to be thinking about LTE, even when
higher speeds are not required. These include:

• Longevity: One of the most important advantages of LTE is the technology’s

longevity—an important asset for connected devices that will have long lifecycles.
Automotive M2M devices may need to operate in the field for 10 years or more, and
connected industrial equipment and infrastructure will likely have an even longer lifespan.
While these applications may function well over 2G networks, the expected lifecycle of
those networks varies greatly from region to region. Mobile network operators (MNOs) in
some parts of the world are actively shifting away from 2G services. For example, several
tier-1 MNOs around the world have either already decommissioned their 2G networks
or discontinued any new product certifications on 2G networks. The factors driving
these decisions—regulatory changes, scarce spectrum, mobile broadband subscriber
growth—can be difficult to predict. OEMs developing M2M devices have to consider
that, depending on the market, 2G services may not be available for the full expected
lifecycle of the device. Increasingly, they will need to weigh the incremental upfront
costs of using LTE modules with the costs of performing a major field replacement
down the road.

• Potentially lower service costs: Another benefit of LTE is the potential for lower
service costs in the future. As an IP-based technology, LTE allows MNOs to use a “flat”
IP core network, as well as standardized, self-organizing network technology, making it
much simpler and less expensive for them to deploy, operate, and expand the cellular
network. LTE also offers MNOs a great deal of spectrum flexibility, with the ability to
deploy LTE in many bands and combinations of bands—and deploy next-generation
services in virtually any part of the spectrum an MNO has available. Finally, LTE offers
much more capacity per MHz than 2G networks, and studies have demonstrated that
it provides twice that of HSPA+ 3G networks, even when using comparable antennas
and spectrum allocations. All of these factors can lower capital costs, and operating
costs, which lowers the cost per bit for MNOs, and ultimately translate to lower costs
for customers.

• Scalability: LTE is also extremely scalable, as unlike 2G and 3G networks, it is being

deployed today with support for IPv6 addressing. This is becoming crucially important

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 as the world’s supply of available IP addresses rapidly dwindles. IPv6 exponentially
expands the IP address space, making it possible to enable the ultimate M2M vision of
an “Internet of Things.” The fact that LTE networks support IPv6 also makes them well-
suited to future mass M2M deployments that might be constrained by the limitations of
older networks that rely on IPv4 addresses and network address translation (NAT).

Overcoming Barriers to LTE Adoption in the M2M

Marketplace
High-performance connected devices are already reaping the benefits of these LTE
innovations. For developers of lower-speed/lower performance M2M applications, however,
there remain some barriers that the industry must overcome before LTE becomes the
cellular technology of choice. These include:

• Varying coverage: LTE rollouts are proceeding quickly, and there is no doubt that
LTE will be deployed in large-scale national and regional networks (and not just in high-
density areas) worldwide. But, as LTE is a new technology, the coverage today is still
evolving—and is not currently as ubiquitous as 2G and 3G networks. The dynamic state
of the LTE market also means that LTE coverage can vary greatly from region to region.

• Device cost: Another area of concern of OEMs developing lower-speed M2M

applications is cost. Since LTE is still new, and since the technology is more complex
than 2G (requiring support for more frequency bands and band combinations, more
complex receiver configurations, and more sophisticated antennas) today’s LTE
modules carry higher upfront costs than 2G technologies. Indeed, some OEMs building
lower-speed M2M solutions may feel that, due to the higher-performance (and higher-
cost) components used in LTE, the LTE standard itself is just not optimized for their
applications as currently constructed.

Some of these barriers will be overcome simply through the passage of time. For example,
the cost of LTE modules and devices will go down in time, as is the case with all new
technologies. Lack of LTE coverage in some areas will also be resolved as LTE deployments
proceed around the globe. (Additionally, it should be noted that since many MNOs are

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 deploying LTE at lower frequency bands, such as 700 MHz, LTE networks may ultimately
provide even better coverage than higher-frequency 3G services for indoor applications.)

However, significant efforts are now under way by network operators, LTE technology
providers, and standards-making bodies to make LTE more amenable to M2M applications
of all varieties.

Lowering Costs

The inherent variation and spectrum flexibility of LTE mean that it will likely always be more
complex than 2G systems. But, M2M technology providers are working to address these
complexities to bring costs down for M2M deployments. For example, Sierra Wireless and
others are using new tunable component technologies to allow modems and antennas to
handle more and wider bands, and help address the wide variation seen in today’s LTE
deployments. Ideally, this technology could eliminate the need for multiple filters, and other
components that add cost to the device.

It is also important to recognize that the bill of materials is just one part of total cost of
ownership (TCO) of an M2M solution. GSMA studies suggest that hardware costs actually
make up only 5 to 15 percent of TCO, and that service and operational costs can add up
to much more over the life of the device. Major LTE vendors are working to bring down
TCO for M2M applications by making it less expensive to develop and operate them. For
example, Sierra Wireless built its Open AT® operating system from the ground up to simplify
M2M application development by providing all of the essential wireless services, TCP/
IP connectivity, and hardware resources that M2M applications require, without requiring
an extra processor. Open AT also draws on the Eclipse Project to provide an integrated
development environment (IDE) with embedded M2M language tools, runtimes, application
editors, and more that make it very easy to develop M2M applications for connected
devices.

New M2M management solutions, such as Sierra Wireless’ AirVantage™ Platform also
provide comprehensive tools for developing M2M applications and managing devices,
subscriptions, and underlying assets. Combined with intelligent LTE gateways, these types
of solutions abstract M2M management from the cellular network technology, allowing
OEMs and developers to create M2M applications once, and port them to 2G, 3G, and 4G
networks without code changes.

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 Optimizing LTE for M2M

Recognizing the importance of lower-speed M2M

Enhancing LTE for M2M
applications in the marketplace, and the functional limitations
of the current LTE standard in supporting them, standards- Mobile network operators, standards
making bodies are hard at work on enhancements to the LTE bodies, LTE technology providers, and
protocol. Development is now under way on support for a others are working together to optimize
new class of low-cost LTE devices that: the LTE standard for a broader range
of M2M applications. Efforts include:
• Operate at sub-1 Mbps maximum data rates, Make
• Developing a new class of low-
it possible to use only a small part (e.g., 1.5 MHz) of cost, low-speed LTE devices
bandwidth on the front end—a tiny fraction of the current • Reducing congestion
minimum requirement of 20 MHz caused by large-scale M2M
deployments
• Use a half duplex and single receiver (instead of full
• Minimizing the footprint of LTE
duplex and receive diversity receivers for each band)
devices accessing the network
• Use lower transmit power to reduce power • Improving power efficiency
consumption and hardware costs with longer sleep cycles for
latency-tolerant applications
Sierra Wireless, along with many other LTE vendors, is and configurable mobility
working closely with standards groups to bring these LTE management functions
enhancements to the marketplace. Ultimately, these efforts
will allow developers of lower-speed M2M applications to
take advantage of a new class of LTE device that features fewer hardware components,
less complexity, and a lower cost, without sacrificing coverage. (For more details, see 3GPP
Specification TR 36.888, and the 3GPP Study Item Description RP-111112.)

Improving LTE Efficiency and Performance

Stakeholders throughout the LTE ecosystem are also working with standard-making bodies
to address the congestion issues that can affect cell sites of all kinds (2G and 3G as well as
LTE) when large numbers of devices are trying to attach to the network simultaneously. This
can be particularly important in industrial or energy M2M applications where large numbers
of devices may be deployed in a small geographic area.

For example, new standards work aims to identify “low-priority” M2M devices to delay

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 them from trying to reconnect if they fail the first time. Engineers are also developing a new
LTE broadcasting scheme that would allow the network to prevent all low-priority devices
from accessing the network during certain timeframes.

Standards groups are also working with LTE technology developers to create standards to
protect the network from congestion or failures from roaming connections. For example,
standards groups are developing protection mechanisms that allow networks to allow home
subscribers access the network, but block roamers. This would be important for assuring
that, in collocated networks, a failure in one network wouldn’t immediately lead to a huge
spike in traffic (and potentially even a failure) in the other.

In addition to this work, LTE vendors and standards groups are working to improve coverage
and minimize the footprints of M2M devices accessing the cellular network. One area ripe
with possibilities is the potential to trade speed for coverage. Currently, LTE is optimized to
use its larger bandwidth to deliver faster data rates. But theoretically, for M2M applications
that don’t require higher speeds, some of that spectrum could be used to improve in-
building penetration, improving coverage for in-building M2M systems.

Note that, while all of these innovations could theoretically be applied to cellular networks of
all kinds, they are most likely to appear in LTE networks, where MNOs are already investing
in deploying new technology in the cell site. (For more details on some of these efforts, see
the 3GPP work item System Improvements to Machine-Type Communications.)

Enhancing M2M Power Efficiency

Sierra Wireless is also working with others in the industry to improve the power efficiency
of M2M devices. In a standard cellular module, power consumption is largely a result of
receive functions. In human-to-human communication (in a cell phone, for example), it’s
important to design devices with very short sleep cycles, that are able to “wake up” and
receive a connection in a very short time, typically less than a second or two. In many M2M
applications, however, it is perfectly acceptable for a device to take several minutes to
connect with the network after receiving a page.

Standards bodies are now working to change the LTE standard to accommodate this
reality, developing longer sleep cycle durations for latency-tolerant M2M applications. The
LTE standard is also being adjusted to make the period for mobility management functions

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 configurable per device. This would mean, for example, that unlike a cell phone, a stationary
piece of industrial equipment need not check in with the network every two hours minimum
to report its location (and need not waste capacity and battery life performing that function).

Conclusion
Connected devices and applications promise to revolutionize the wireless industry, but
today, solutions for low-speed M2M applications and high-performance M2M applications
are evolving along two different paths. Those that can immediately benefit from high
speeds and performance are rapidly embracing LTE, while those developing lower-speed
applications have largely remained with previous-generation cellular modules. However,
these M2M evolution paths will soon converge. Ultimately, the advantages of LTE—most
notably its longevity, scale, and operational efficiency—are simply too great for OEMs and
other M2M stakeholders to ignore.

Sierra Wireless, along with other leading LTE technology vendors and standards groups,
is working to optimize LTE for M2M. This work encompasses a broad range of efforts to
improve LTE efficiency for OEMs that require high performance and low latency in their
M2M applications, and to lower LTE costs and complexity for those that do not.

Sierra Wireless is also drawing on its extensive expertise in multi-mode/multi-frequency

solutions to develop the most effective LTE modules and devices. As a global pioneer in first-
generation LTE technologies and the market leader in M2M, Sierra Wireless has cultivated
mature and extensive LTE testing protocols, advanced antenna design capabilities, and
in-depth knowledge of MNO networks and certification processes worldwide. As a result,
Sierra Wireless is well positioned to help OEMs and M2M application developers avoid the
many potential pitfalls inherent in LTE, and streamline the development and approval of
their LTE-connected devices.

Both the M2M marketplace and LTE technology will continue to evolve. Sierra Wireless
is investing resources to assure it will continue to be the global leader in both industry
revolutions.

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