IoT cellular base to reach 9bn connections by 2023

Berg Insight says number of IoT cellular connections grew 70% in 2018, mainly driven by China

The global market for IoT connections over cellular was worth €6.7 billion ($7.5bn) in 2018, and will grow to approximately €29.4 billion ($33.1bn) by 2023.
The global market for IoT connections over cellular was worth €6.7 billion ($7.5bn) in 2018, and will grow to approximately €29.4 billion ($33.1bn) by 2023.

The number of cellular IoT subscriptions increased by 70% worldwide in 2018, according to Berg Insight.

There were 1.2 billion IoT devices connected by cellular services in 2018, the analyst company said, which it predicts to grow to 9 billion by 2023.

A new report from Berg Insight said that revenues from cellular IoT connections will grow by a CAGR of 34.4% from €6.7 billion ($7.5bn) in 2018 to approximately €29.4 billion ($33.1bn) in 2023. Meanwhile the monthly ARPU (average revenue per user) is expected to drop to €0.27 (30 cents).

The leading market for cellular IoT devices is China, which accounts for 63% of the market, the company said.

“China is deploying cellular IoT technology at a monumental scale,” said Tobias Ryberg, Principal Analyst and author of the report. “According to data from the Chinese mobile operators, the installed base in the country grew by 124 percent year-on-year to reach 767 million at the end of 2018. The country has now surpassed Europe and North America in terms of penetration rate with 54.7 IoT connections per 100 inhabitants.”

Berg Insight said that the Chinese government is a big driver of IoT adoption in the country, along with the private sector.

China has widespread adoption of connected cars, fleet management, smart metering, asset monitoring and other traditional applications for cellular IoT, and IoT is also giving rise to new consumer services enabled by connectivity like bike sharing.

The government drive is the most distinctive characteristic of the Chinese IoT market, Berg Insight said, as the government is actively driving adoption as a tool for achieving domestic and economic policy goals, and to implement its vision for urban life in the 21st century.

China Mobile is the world’s largest provider of cellular IoT connectivity. At the end of 2018, the operator reported 551 million IoT connections and a year-on-year growth rate of 141 percent. China Unicom and China Telecom ranked second and third with 110 million and 106 million connections respectively.

In the report, Berg Insight also analyses the IoT business KPIs released by mobile operators in different parts of the world and found significant regional differences. The monthly ARPU for cellular IoT connectivity services in China was only €0.22, compared to €0.70 in Europe. Global revenues from cellular IoT connectivity services increased by 19% in 2018 to reach € 6.7 billion. The ten largest players had a combined revenue share of around 80%.

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