5G RedCap set to dominate cellular IoT growth

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Cellular IoT is set for robust growth over the next decade, with 5G RedCap (Reduced Capability) becoming the dominant connectivity technology for low-power wide-area networks (LPWANs).

According to ReTHINK Research, the 5G RedCap standard and extended variants (RedCap and eRedCap) will account for almost one third (30.17%) of all cellular IoT connections by 2030. The growth will come largely at the expense of retiring 2G networks and slowly declining 4G IoT protocols.

The first RedCap devices are expected to become commercially available in 2024, with growth accelerating after eRedCap hits the market around 2026. Rethink Research predicts RedCap technology will overtake 4G as the leading cellular IoT platform between 2032-2033.

Part of the appeal of 5G RedCap is the higher revenue potential per connection compared to existing IoT protocols. By 2030, RedCap is forecast to generate 61.3 percent of all cellular IoT revenue ($16.6B out of $27.1B) while only accounting for 30 percent of connections.

Geographically, the Asia Pacific (APAC) region will continue to dominate the IoT landscape with 61 percent of all connections by 2030. This lead is thanks largely to early massive deployments of NB-IoT devices in China. As saturation approaches in China, India’s growth will help offset some of the decline.

ReTHINK Research’s forecast suggests the outlook remains positive for 4G CAT-M and NB-IoT in the near term. 5G standardisation work is underway to enhance NB-IoT with 5G alignment, support for non-terrestrial networks (NTNs), transparent roaming, and more.

While 4G IoT still reigns supreme today, 5G RedCap is poised to take over the top spot within the next decade. The timing coincides with 2G and 3G sunsets, providing a clear path for the new 5G technology to enable the next wave of IoT innovation.

An executive summary of the research is available here (full version paywalled)

(Photo by Honey Yanibel Minaya Cruz on Unsplash)

See also: Nokia boosts IoT capabilities for the industrial edge

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