Europe is a large and advanced market for IoT communications. Western Europe is one of the most mature regions with 20 to 60 million connected devices in each of the largest countries. Central and Eastern Europe still has great growth opportunities when it comes to the adoption of IoT, and there are significantly fewer players developing international IoT solutions for the global market. The Russian market has started to rise in recent years but is now facing uncertainty due to war and sanctions. Mobile operators in Europe had deployed 311.3 million mobile IoT connections in or out of the region by the end of 2022.
How is the European IOT market structured?
The European cellular IoT market is divided into two major segments. The international segment, consisting of large multinational organizations, companies with operations in multiple countries and export-oriented OEMs. The domestic segment, consisting of national players such as utilities, governments and local service providers, is highly fragmented, with each European country forming a separate market. The mobile IoT communications providers are positioning themselves to serve one or more of these segments. Major players tend to focus on the international segment in general and on the domestic segment core market areas. Smaller players tend to concentrate their footprint on the domestic segment. They take an opportunistic approach to the international segment, mainly supporting domestic customers in their international expansion.
The high degree of fragmentation makes it difficult to present fully accurate data for the cellular IoT market in Europe. Domestic mobile IoT simcards are typically reported to national telecom regulators and appear in official statistics. International IoT simcards are sometimes included national figures from the operator’s home market and sometimes counted separately, thus excluding them from all national data. Leading international players such as Vodafone have also deployed a significant number of global IoT simcards with international mobile country codes in Europe.
Vodafone is expanding as a provider of cellular IoT connectivity in Western Europe. It is predicted that approximately 80 percent of Vodafone’s 160 million IoT connections will be deployed in or from the region from Q4 2022. This corresponds to 128 million IoT subscribers and a market share of 41 percent. Orange and Deutsche Telekom are in second and third place with 29.1 million and 28.5 million respectively. Telenor is the fourth largest cellular IoT subscriber. Meanwhile, Telefónica lags behind the other major European operator groups with 14.9 million connections in the region. Telecom Italia was number six with 11.1 million connections, with a strong position in the home market. KPN is the market leader in the Netherlands with 10.1 million IoT subscribers, while Sweden’s Tele2 has embarked on a pan-European expansion and reached 10 million by the end of the year. CKH Group Telecom, Bouygues Telecom and Altice Group each had approximately 7-8 million connections across Europe. A1 Telekom Austria and Telia Company are important regional players in Central Europe and Scandinavia respectively, with 5.5 million connections each.
Where does Western Europe stand in the IOT market?
Western Europe is the most advanced area in Europe. At the end of the second quarter of 2022, there were approximately 206.4 million IoT subscribers in Western Europe, an increase of 17 percent from a year earlier. The market is partially integrated across national borders and is influenced by common trends across countries. EU policies are having a significant impact on the market, with regulations and policy recommendations driving the adoption of OEM automotive telematics and smart meters. The automotive, transport and logistics sectors, and utilities are the three most dynamic market segments in Western Europe. These are expected to represent the majority of volume growth in the coming years. At a national level, the most active geographic markets are the major automotive industry centers and countries rolling out smart meters with cellular connectivity. The European mobile IoT market remains a significant 2G market, with the majority of operators planning to switch off 2G networks as late as 2025. In many countries, 2G networks will last longer than 3G networks. However, most mobile operators are preparing for a transition to 5G and LPWAN technologies, such as LTE-M and NB-IOT.
All countries in Western Europe have some degree of official reporting of the number of mobile IoT subscribers, either from regulators or major operators. Based on this data, five of the region’s sixteen countries had more than 10 million mobile IoT subscribers by mid-2022.
- Germany is the largest market with an IoT subscriber base of 52 million, a growth of 28 percent from the previous year. Italy reported the second largest IoT subscriber base of 28.8 million and an annual growth rate of 5 percent.
- France was in third place with 24.1 million, followed by the Netherlands with 14.1 million. The Netherlands reported the highest growth rate in Western Europe, at 68 percent, largely driven by the rollout of smart electricity meters.
- The UK had 12.9 million IoT subscribers as of mid-2022. The official figures for Germany and the UK do not include Vodafone international simcards used in each country.
- Spain ranked sixth with 9.4 million subscribers, followed by Austria and Belgium with 9.3 million and 5.9 million respectively.
- The Nordic countries of Sweden, Norway, Denmark and Finland each had 1.6 to 5.2 million IoT subscribers.
- Ireland, Switzerland, Portugal and Greece are relatively small markets with installed bases of 0.8 to 2.5 million.
A significant portion of IoT subscribers in Western Europe are not registered in a country. Among the largest mobile operators, Vodafone, Orange and Telenor in particular have a very large share of non national IoT simcards.
How does the Benelux perform within the European IOT landscape?
The Benelux has a dynamic IoT market with strong acceptance of cellular IoT in combination with national LPWA networks. The growth in volume is driven by the continued rollout of smart meters in the region. In the Netherlands, KPN’s LTE-M network is used for the other installations in the rollout of smart electricity meters for 2.3 million customers. Proximus, on the other hand, has been commissioned to provide NB-IOT connectivity for approximately 1.3 million electricity meters in Belgium. At the end of the second quarter of 2022, the number of cellular IoT subscribers amounted to 14.1 million in the Netherlands and 5.9 million in Belgium. KPN has a leading position in the Netherlands with a market share of more than 50 percent. Proximus and Orange are the main players in Belgium. POST Luxembourg is another major provider of cellular IoT connectivity in the Benelux region with a subscriber base of 3 million, mainly in the automotive industry.
Where do Central and Eastern Europe stand in the IOT market?
Central and Eastern Europe is generally several years behind Western Europe in M2M/IoT adoption. As in Western Europe, national regulators in most countries have some form of reporting on the number of cellular IoT subscribers. At the end of the second quarter of 2022, the region had approximately 53.2 million IoT subscribers, an increase of 18 percent from the previous year. Russia ranks first as the largest market in Central and Eastern Europe and as one of the largest markets for cellular IoT communications in Europe, next to the most important countries in Western Europe. At the end of the second quarter of 2022, there were approximately 32.6 million cellular IoT subscribers in the Russian Federation, an increase of 20 percent year-on-year. The number of IoT subscribers reached 35.5 million at the end of the year. The ongoing war in Ukraine is contributing to significant economic uncertainty in the country in several ways.
MegaFon and MTS compete strongly for market leadership in Russia, with estimated market shares of 40-45 percent. Beeline (VEON) and Tele2 (Rostelcom) follow with 10 and 3 percent respectively. Vehicle telematics is the largest application category and represents more than 40 percent of the installed base. Various regulatory initiatives have had a positive impact on demand. Firstly, the ERA-GLONASS emergency response system has been mandatory on all new approved car types in Russia since 2018. Secondly, in 2015, the Platon road charging system was introduced in Russia, to collect tolls and compensate for damage to federal highways by heavy vehicles. The system reached more than 1.8 million vehicles by early 2023. Additionally, legislation was introduced in 2018 requiring cash registers to be monitored remotely. In the same year, a new law was introduced requiring smart meters to be installed for replacements and new connections from mid-2020. Part of the communication needs will be supported by cellular communication.
Poland is the second largest geographic market in the region with 6.6 million IoT subscribers in it, up 22 percent from a year earlier, according to data from the national telecommunications regulator. Orange is the market leader in the domestic market, followed by T-Mobile and Plus. Hungary is the third largest market with more than 2.1 million cellular IoT connections. Vodafone and Telenor (PPF Telecom Group) compete strongly for market leadership. Romania, Czech Republic, Slovakia and Bulgaria each had 1.2-1.5 million IoT subscribers. In the Baltic region, Estonia, Latvia and Lithuania each reported around 0.5 million IoT subscribers, meaning the installed base in the region exceeds 1 million. Regulators in Serbia and Croatia respectively reported 0.3 million IoT subscribers at the end of the second quarter of 2022. North Macedonia and Slovenia are smaller markets with around 0.1 million IoT subscribers each.
LPWA networks in Europe
LoRa has emerged as the most widely supported LPWA network standard in Europe. At the beginning of 2022, approximately 80 mobile operators and industrial players were operating large-scale networks based on these technologies in the region. 3GPP Release 13 introduced LTE-M and NB-IOT. There are now 124 NB-IoT and 55 LTE-M networks worldwide. LTE-M is growing due to the 2G phase-out in North America, Europe and parts of Asia.
What is the position of NB-IOT and LTE-M?
3GPP Release 13 marked a new era in mobile communications by introducing the LTE-M and NB-IOT standards for machine-type communications. Pre-commercial trials of LTE-M and NB-IOT networks began in 2015, followed by the first commercial launches in 2016. By the end of 2022, a total of 124 NB-IOT networks and 55 LTE-M networks had been launched worldwide. There were no new launches of NB-IOT or LTE-M networks during the year. LTE-M connections represented approximately 4 percent of the total number of cellular IoT connections, while NB-IOT connections accounted for approximately 18 percent. NB-IOT connections are largely concentrated in China. Demand for LTE-M services is mainly driven by the phasing out of 2G services in North America, Europe and parts of the Asia-Pacific region.
What is the position of LoRa networks?
LoRa has emerged as a key networking platform for IoT in Western Europe, supported by mobile operators, industrial players and dedicated LoRaWAN network operators. Mobile operators operating LoRaWAN networks include Orange, KPN, Proximus, Swisscom, BT and Three Austria. KPN and Proximus completed their respective rollouts in the Netherlands and Belgium/Luxembourg in 2016. Orange has rolled out a national network in France, covering 95 percent of the population. Other notable players in the telecommunications sector operating LoRaWAN networks include broadcast network operators Digita in Finland and Cibicom in Denmark, and Italian broadband provider Unidata. Industrial players that have built large-scale LoRaWAN networks include energy groups E.ON (Digimondo), smart meter manufacturer Minol-ZENNER Group, German distribution system operator Netze BW and one of Italy’s largest regional utilities, A2A.
Sweden-based LoRaWAN network operator Netmore and its networking business European Connectivity Networks, co-owned by Polar Structure, have embarked on an extensive expansion across Europe in 2022. The companies have rapidly expanded their operations and now operate in the United Kingdom, France, Spain, Sweden, Norway and Ireland. Their approach to coverage on demand for network expansion opens up opportunities for large-scale national and international IoT projects. Just like Netmore, the large LoRaWAN neutral host operator Everynet has also recently gained ground on the European market. The company joined Cellnex in December 2021 to roll out new networks in Italy, the United Kingdom and Ireland. In Spain, Everynet has partnered with American Tower and has rolled out a public LoRaWAN network in major metropolitan areas.
What is the position of The Things Network?
Europe is also home to The Things Network, an admirable non-profit organization that operates a LoRaWAN network that relies on community engagement and consists of a collection of more than 20,000 gateways. What makes this network truly special is that it is fully owned and operated by a passionate community of nearly 200,000 members. This community is committed to supporting and promoting innovation in IoT. The services of The Things Network are tailor-made for developers and are perfectly suitable for realizing prototypes and developing proof of concepts. But it doesn’t stop there. The initiators of The Things Network, including The Things Industries, also focus on serving business customers. Not only do they offer the LoRaWAN network server The Things Stack (the same server used by The Things Network), but they are also ready to provide professional support so that your IoT projects can thrive. By the end of 2022, almost 60 million devices were connected to LoRa networks in Europe, representing an impressive 20% of the global installed base. And here comes the interesting part: it is estimated that about two-thirds of these connections are made via private networks. This indicates that the number of LoRa devices connected to public networks, such as those of The Things Network, was around 20 million. That is a significant achievement that underlines the value and impact of The Things Network in the IoT world.
Market position Thingsdata partners
In the ever-evolving world of IoT connectivity, it is critical to understand how the market position of our partners plays a fundamental role in shaping today’s IoT landscape. Thingsdata has several leading partners throughout Europe. We will discuss how these collaborations contribute to creating innovative and future-proof solutions for our customers. We will delve deeper into their performance, unique features and how they are a key driver of our collective efforts to meet the growing demands of the industry.
Positioning KPN IOT
KPN IOT is the leading telecom and IT service provider in the Netherlands with annual revenues of 5.3 million 2022 and approximately 200 employees. The operator was one of the first major network operators in Europe to consolidate all M2M/IoT activities into a single business unit to develop a pan-European value proposition. KPN IOT has been part of the IoT World Alliance since 2012 and works closely with Cisco for IoT solutions. In 2016 they launched the first national LoRa network, followed by the upgrade of their 4G LTE network to LTE-M in 2017, with national coverage in 2018.
Now they are focusing on developing the IoT ecosystem, especially with LPWA and 5G technologies. They offer IoT solutions, including KPN Things and the KPN Data Services Hub. In 2022, they reported 10.1 million connected IoT devices on their networks, with smart metering as the main application area. Other market segments include manufacturing, automotive, connected cycling and transportation and logistics.
Positioning TELE2 IOT
TELE2 IOT, based in Sweden, is a major telecom operator in the Nordic and Baltic countries with approximately 10 million mobile subscribers. The annual turnover in 2022 was 63 million and the workforce consists of approximately 200 employees. Tele2 has reduced its presence in recent years to focus on core markets. About 80 percent of sales are generated on the Swedish market. TELE2’s position and priorities vary across its geographic presence. In the Baltic countries, TELE2 holds the position of the leading mobile operator in Lithuania and is a challenger in Estonia and Latvia.
Tele2 IoT focuses on managed connectivity and value-added services. Since 2020, it has operated as an integrated unit within TELE2’s B2B segment, with a dedicated IoT network management center and its own product development, marketing and sales functions. They offer international M2M/IoT solutions in Europe and worldwide using networks from Tele2 and international partners.
TELE2 IoT offers a self-service portal for business IoT, powered by Cisco IoT Control Center, supports 5G and LTE-M connectivity, and has services such as Private Interconnect and Cloud Interconnect. They are expanding their international presence and focusing on corporate and SME markets.
Positioning 1NCE
1NCE is a leading international provider of IoT connectivity, founded in Germany in 2017. The company is known for its innovative lifetime flat rate offer, where customers pay 10 euros once for 10 years of access to 500 MB data and 250 SMS messages. 1NCE is headquartered in Cologne, and they have offices around the world, including Singapore, Tokyo and Miami. They have raised substantial funding, including a $50 million funding round in 2021 led by Deutsche Telekom and SoftBank Group.
What sets 1NCE apart is their focus on long-term IoT solutions and their uniform flat-rate pricing model. They offer connectivity in more than 153 countries, including 2G/3G/4G networks and support for LTE-M and NB-IOT in several countries. In addition, 1NCE operates a virtualized mobile core network and has strategic partnerships with leading telecom companies such as Deutsche Telekom and SoftBank.
With approximately 15 million managed IoT connections, 1NCE serves more than 10,000 companies across industries worldwide. Their lifetime flat rate offering has a lot of appeal, especially for applications such as vehicle telematics, smart metering and asset tracking. The company has made its offering available through various channels, including an online store and collaborations with partners such as T-Mobile Netherlands and SoftBank, allowing them to serve a wide range of customers.
Conclusion
Europe is an important and advanced market for IoT communications, with Western Europe as the most developed region. This region is home to 20 to 60 million connected devices in each of the largest countries. Central and Eastern Europe are slightly behind in adoption and have fewer international IoT solutions compared to Western Europe. At the end of 2022, mobile operators in Europe had 311.3 million mobile IoT connections.
The European cellular IoT market has two major segments: the international segment, focused on multinationals, and the national segment, consisting of local service providers, utilities and governments. Large players typically focus on both segments, while smaller players often focus on the national segment.
LPWA networks are important in Europe for IoT connectivity. Mobile operators and industry players, such as Orange, KPN, and E.ON, have rolled out LoRaWAN networks in several countries. Netmore and Everynet are rapidly expanding in several European countries, while The Things Network operates a community-based LoRaWAN network. By the end of 2022, almost 60 million devices were connected to LoRa networks in Europe.
For more information about the role of KPN IOT and TELE2 IOT within the Thingsdata portfolio, please contact us via telephone number 085-0443500 or by email to info@thingsdata.com.