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Are LTE Cat-M and NB-IoT the Next Big Things in Wireless?

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The four major national wireless carriers in the United States are focusing on 4G LTE (long-term evolution) Category-M (Cat-M) and narrowband Internet-of-Things (NB-IoT) as their future network deployment. These are doing so in order to gain maximum benefit from the lucrative IoT market, per a recent report by LightReading.

LTE Cat-M is a part of the existing 3GPP LTE standards, which enables reduced power consumption and cost by capping speeds at 10 megabits per second. The idea is to generate lower throughput with low Cost and lower energy consumption. On the other hand, NB-IoT is a standards-based low power wide area (LPWA) technology, which enables a wide range of new IoT devices and services. The power consumption of user devices, system capacity and spectrum efficiency can be improved remarkably using NB-IoT. This technology will be more helpful in deep coverage areas.

Internet of Things (IoT): The Next Growth Driver

IoT, which enables any physical electronic device with a valid IP-address to transfer data seamlessly over a wireless network, is fast gaining market traction and bringing about fundamental changes in business models. Next-generation superfast wireless networks (4G LTE, LTE-A, upcoming 5G) will provide the primary impetus to the telecom industry.

In this context, IoT holds the potential to be the numero uno factor in driving growth in the space. IoT is a network of physical objects embedded with electronics, software, sensors and connectivity that facilitates it to achieve greater value and service by exchanging data with other connected devices.Superfast 5G mobile networks will be of utmost importance in the management of exponential growth in IoT.

Major U.S. Wireless Carriers

All four major U.S. national wireless carriers are trying hard to gain maximum profit from the IoT space. Verizon Communications Inc. (VZ - Free Report) has already deployed LTE Cat M and plans to go ahead with NB-IoT LTE trials in 2018. AT&T Inc. (T - Free Report) has also deployed Cat M technology nationwide and decided to deploy this network in Mexico in 2018. T-Mobile US Inc. (TMUS - Free Report) will start deploying NB-IoT in 2018 together with Cat-M support. Meanwhile, Sprint Corp. (S - Free Report) has announced that it will deploy Cat-M in mid-2018 followed by NB-IoT.

Moreover, in March 2017, satellite TV operator DISH Network Corp. had announced plans of building a NB-IoT network to meet the FCC’s (Federal Communications Commission) buildout requirements. Notably, in the last decade, the company has developed an extremely strong portfolio of lucrative wireless spectrums which are still unutilized. The company spent nearly $21 billion to build this spectrum portfolio, which, according to some estimates, is currently valued at no less than $45 billion.

All five stocks mentioned above currently carry a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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