Can The Altice-SigFox Partnership Accelerate LPWAN In The U.S.?

By Keith Tamboer

Mobile operators outside the of the U.S. have been investing in Low Power Wide Area Networks (LPWANs) to compliment cellular networks as they seek to expand the market for IoT services. The addition of LPWAN enables operators to unlock the market potential for IoT for use cases that don’t require high data throughput or low-latency networks. 

European operators have been early adopters of LPWAN and have made significant progress in trialing and deploying networks over the past year. Orange and Bouygues have already started deploying networks in France based on the LoRa standard while KPN, Proximus, and Swisscom are in the early stages of rolling out LoRa networks in the Netherlands, Belgium, Luxembourg, and Switzerland. In the Czech Republic, Deutsche Telekom has partnered with SigFox to build a dedicated IoT network.  

LPWAN deployments aren’t limited to Europe. SK Telecom recently announced plans to build a nationwide IoT network in South Korea and is also a financial backer of SigFox along with Japan’s NTT DoCoMo and Spain’s Telefonica – an operator with a significant IoT presence in Latin America.

But U.S. mobile operators have been far less receptive toward LPWAN. AT&T and Verizon are more inclined to favor LTE-M and, ultimately, the promise of NB-IoT.  LPWAN advocates like the LoRa Alliance, SigFox, and Ingenu have been forced to grow their U.S. businesses without the benefits of leveraging the longstanding enterprise relationships that network operators like AT&T and Verizon have with their business customers.

But, the conundrum faced by the LPWAN community in the U.S. may have just gotten a big boost in their favor. While the recently announced deal between French operator SFR and SigFox that enables SFR to better compete with Orange and Bouygues for LPWAN deals in France. The really interesting part of the deal is how SFR’s parent company Altice can become a serious IoT player in the U.S. Altice, a multinational mobile, cable, and media company that has recently expanded its presence in the U.S. The company owns 70% of SuddenLink, the 7th largest cable operator in the U.S., and hopes to close its $17.7B acquisition of Cablevision, the 5th largest U.S. cable operator, in Q2 2016. When the Cablevision deal is complete, Altice will have a U.S. customer base of more than 4.5 million which includes annual business services revenues that exceed $700M. SigFox could deploy network equipment across the combined SuddenLink/Cablevision footprint thereby expanding and densifying its own network. The ability to sell IoT solutions through SuddenLink & Cablevision B2B distribution channels and tapping into existing business customers is also a huge potential upside.

In the longer term, cable companies could be preferred partners of LPWAN network operators. Cable companies recognize the business upside of IoT but lack ubiquitous mobile network coverage to be viable players in the market. While Cable continues to flirt with the concept of offering wireless service as an MVNO or via Wi-Fi only, those efforts have yielded limited success. Partnering with an LPWAN provider would enable Cable to have a serious IoT offering and accelerate the development of its own IoT ecosystem. It’s a particularly attractive alternative in the near term as existing cellular solutions are too costly and don’t have the required battery life for use cases best suited to LPWAN. If Cable moves quickly, they could be first movers on the portion of the IoT market that doesn’t need to transmit high volumes of data.

An LPWAN tie up with Cable also brings potential scale beyond Altice.  Industry groups like NCTA and initiatives like CableLabs encourage cooperation among cable operators. An idea that works for one operator typically permeates to others. If Altice and SigFox can capitalize on their new partnership and demonstrate real business value, other cable companies are likely to follow. Comcast, the largest U.S. cable company, has been eying IoT as a growth engine and recently established an organization to focus on IoT. Comcast’s current focus is growing its Xfinity home automation business but a closer partnership with an LPWAN provider could significantly expand its addressable market.  

Over the last several years, Cable has made significant inroads into business services, a market historically dominated by traditional telecom operators. If the Altice-SigFox partnership shows promise, it could lead to far larger opportunities for both LPWAN and Cable.