Digitizing Industry

The German Connection

  • Why it matters

    Why it matters

    European mobile providers are pushing to establish their technology as the global standard, over the U.S. rivals.

  • Facts

    Facts

    • The internet of things could generate up to €23 billion ($24.3 billion) by 2020 in Germany alone, according to consultancy McKinsey.
    • Narrowband IoT, or Internet of Things, is a new wireless technology that can transmit data even through thick walls and over long distances.
    • The technology was developed by German mobile providers that are now pushing to spread it globally.
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    Audio

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76980597CC streetlights and technology
In future, streetlights can be connected to the internet and automatically report when they need to be repaired. Source: Creative Commons

Soccer games have long posed logistical challenges in ball-crazy Germany, and a new wireless technology could solve some of these.

One example is rubbish. Each time Berlin’s soccer club Hertha BSC club plays at home, for example, the trash cans at the main station are overflowing. The moment the trains with the rival team’s fans arrive in Berlin, the bins fill up fast. But nobody knows how fast, and the time staff spend checking whether or not the each bin is full and when to empty it is wasted.

Now, new wireless technology will measure trash levels and bounce that information back to railway station service personnel via ultrasound sensors. It’s thanks to narrowband Internet of Things, or narrowband IoT, that gives the batteries in sensors a longer lifetime and enables data transmission even through thick walls and across long distances.

“The technology will seriously advance the country’s digitization,” Hannes Ametsreiter, chief executive of Vodafone Germany, told Handelsblatt.

By 2020, studies say 50 billion gadgets will be connected to the internet. That opens new revenue channels and allows businesses to become more efficient. The internet of things could generate revenues of €23 billion ($24.3 billion) by 2020 in Germany alone, according to a McKinsey report in 2016.

“Globally, several standards will likely coexist in the mid and long term.”

Thorsten Robrecht, vice president advanced mobile solutions, Nokia

Narrowband IoT could help extent the network in order to link the greater number of gadgets. “Billions of devices could be connected that way,” Mr. Ametsreiter said over the weekend. The technology is one of the hottest topics at this year’s Mobile World Congress, the world’s largest mobile industry trade fair in Barcelona, that started on Monday.

For cell phone operators, narrowband IoT could help offset plummeting sales in traditional telephone services. German providers’ revenues dropped by 2.7 percent per year per client between 2011 and 2015, according to a recent study by PwC.

Both Vodafone Germany and Deutsche Telekom plan to invest in narrowband IoT.

“The technology offers diverse applications. That will create new business models besides traditional connectivity, offering us new revenue streams,” said Claudia Nemat, the Deutsche Telekom board member responsible for technology and innovation.

One of these new business opportunities could be taking a share of the sales that companies generate based on the technology, instead of just selling mobile internet data packages and call flat rates to retail customers.

Vodafone’s Mr. Ametsreiter said that the technology could be available all across Germany within three years.

Deutsche Telekom plans on selling the technology starting in April, Ms. Nemat said, adding narrowband should be widely available. “It’s important to have global standards. Many of our commercial clients are successful mid-sized companies and large corporations that operate globally,” she told Handelsblatt. Deutsche Telekom will promote narrowband in eight European countries.

Network equipment providers were involved in developing the technology and were optimistic. “We view narrowband IoT as the mobile industry’s next success story,” said Tao Yang, chief executive of Huawei Technologies in Germany.

Nokia is hopeful too, but warned other technologies will likely compete with narrowband IoT. Thorsten Robrecht, vice president in charge of advanced mobile solutions at the Finnish company, said: “In the global neural system of billions of connected devices that’s currently being developed, several standards will likely coexist in the mid and long term,” he said.

Besides narrowband IoT that’s currently taking the lead in Europe, other technologies are being developed, and North America is likely to adopt a different one, according to Mr. Robrecht.

Some see narrowband IoT as just a stepping stone to an even more important innovation, the 5G mobile network. This new standard is supposed to enable cars to drive on their own and doctors to operate remotely on patients. Such futuristic visions require a network that’s extremely fast and absolutely reliable, and one that can transmit massive amounts of data.

But since not all things networked have such high standards, narrowband will still have a place in the internet of things. A parking spot for example only needs to indicate whether it’s free or not; a window just needs to report if it’s closed; and trash cans only need to call an employee when they’re full.

The technology is still largely unknown technology and the big providers are now looking for partners. “Cooperation with the industry and municipalities is good, but it’s still in the early stages,” said Ms. Nemat of Deutsche Telekom.

One example is using narrowband on streetlights so they signal defects automatically to repair crews, and can be dimmed remotely as needed. Deutsche Telekom also uses the technology to digitize electricity and water meters to monitor consumption from afar.

Vodafone has similar projects in the pipeline. Together with grid operator Netze BW, the firm developed an emergency call system that allows employees to press a button to raise the alarm. Possible customers include prison guards in dangerous situations or plumbers who got locked in the basement.

“The new technology promises massive savings for companies,” said Mr. Ametsreiter. “That’s why they’re willing to invest in it, and that’s an opportunity for us.”

 

Ina Karabasz is an editor at Handelsblatt’s companies and markets team, covering telecommunications, IT and security issues.  To contact the author: karabasz@handelsblatt.com