By Timothy Ferry – December 21, 2017 – American Chamber of Commerce in Taipei (Taiwan Business TOPICS)
Few technological advances have gained the world’s attention like the Internet of Things (IoT), defined by global analytics firm IDC as “a network of uniquely identifiable ‘things’ that communicate without human interaction using IP connectivity.” Some 13 billion connected devices are already in operation, used mostly in manufacturing, transportation, smart cities, and consumer applications, and IDC forecasts global annual growth of nearly 17% for IoT hardware, software, services, and connectivity. Another leading research firm, IHS, estimates that more than 30 billion devices will be connected by 2020, with the number rising to 75 billion by 2025.
Taiwan is betting big on leveraging its strengths in cost-effective, advanced manufacturing to grab a chunk of the global IoT market, calculated by IDC to currently stand at US$800 billion and rising to US$1.4 trillion by 2021. The Tsai administration has included technological development of IoT-enabled devices under its “5+2” industrial development plan. The Asian Silicon Valley segment of the plan will focus on R&D into IoT, while the Smart Machinery segment will develop machine-to-machine communication in industrial processes.
The government has already allocated some NT$11.3 billion (US$357.9 million) this year for internet infrastructure, mobile broadband services, e-commerce, smart applications, test beds, industry-university collaboration, digital talent, and regulatory adjustment, according to the National Development Council. The NDC reports that Taiwan’s share of the IoT value chain is expected to climb from the current 3.8% to 4.2% in 2020 and 5% by 2025.
To encourage innovation in the sector, the government has released radio spectrum in the sub-gigahertz range for IoT use, and the Telecommunications Management Act approved by the Executive Yuan and now in the hands of the Legislative Yuan would ease restrictions on companies looking to invest in IoT.
A key element of Taiwan’s strategy in IoT and the overall development of the telecom sector is partnering with foreign firms. This effort got a big boost this October with the launch in Taiwan of French telecom Sigfox’s Low Power Wide Area (LPWA) network aimed at enhancing IoT connectivity.
Philippe Chiu, managing director of Unabiz, Sigfox’s local partner, says conventional technology is too costly to promote ubiquitous IoT connectivity. He notes that short-range solutions like Bluetooth have shortcomings such as their need for expensive infrastructure and maintenance, while cellular connectivity provides longer range but requires each device to have its own SIM card, adding to the cost.
“Obviously the unit cost needs to come down” to achieve mass saturation of connected devices, he says. “To do that, we have to rethink everything about the technology, and that starts with the radio.”
Rather than relying on streaming technology, the Sigfox system employs low-power transmitters attached to devices that send snippets of information – datagrams – to the cloud at fixed durations, usually every 10 minutes or so, or whenever a change occurs. Sigfox has installed a network of antennas around Taiwan that are able to pick up the information transmitted by the device, transform it into a traditional IP packet, and route that through its network directly to the customer backend. “The datagram will know which device is reporting,” says Chiu.
Sigfox doesn’t manufacture the radio transmitters but instead offers its technology to manufacturers such as Texas Instruments to enable an open ecosystem. “Our job is to install enough antennas to ensure connectivity,” says Chiu. “We install the access stations – routers and antennas – on rooftops all around Taiwan. This is long distance technology, so we don’t have to install too many antennas. If we did, the costs would rise and so would the prices.” So far, the Sigfox network is able to cover over 90% of Taiwan’s area.
Equally important is the business model of offering a unified contract for Sigfox’s entire global network. “If you sign from any Sigfox country, you get access to all of the Sigfox territories,” says Chiu. This allows businesses to benefit from a global volume discount with no roaming fees. Sigfox is currently fully deployed in 17 countries, including Singapore, France, and Belgium, and is partially deployed in another 19.
Bike-share startup O-bike is already using Sigfox technology, and many logistics companies are interested in putting it on containers to track shipments.
While Sigfox is pioneering nation-wide IoT connectivity in Taiwan, it will surely be joined by others in the future. “Infrastructure is an ecosystem, and it’s not possible for one company to create a whole ecosystem,” notes Arthur Shay, a lawyer with the law firm Shay and Associates.
Since many players will likely join the traditional telecoms in building infrastructure, “the critical issue will be interconnection,” he says. “If everyone can build their own system, then it’s important for have regulations to drive interconnection.”
Read the original article on Taiwan Business TOPICS website.
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