Welcome to NZ, Sigfox

Welcome to NZ, Sigfox

The much anticipated entry of Sigfox to New Zealand has happened. Sydney-based Thinxtra will be the local national operator for Australia and New Zealand with a major capital investment from Auckland technology firm Rakon.

Construction of its New Zealand Internet of Things (IoT) network is expected to begin in June and Thinxtra says, “By end of 2017, we are planning to have coverage for 85% of the population in ANZ.” While not quite clear what this means exactly for New Zealand, it is a change for the local IoT market.

Sigfox Background

Sigfox is a six year old company that provides proprietary wireless connectivity for the Internet of Things. It is well funded, having recently raised US$ 115 million. The company has expanded beyond its European roots with an entry into USA and a growing number of countries around the world.

Similar to LoRaWAN, Sigfox operates in the low power, long range wireless segment using unlicensed frequencies (868 MHz in Europe, 915 to 928 MHz in USA, Australia, and New Zealand).

Unlike LoRaWAN, Sigfox has limits on data transport for end devices:

  • Up to 140 messages per object per day (that’s an average about 1 message every 10 minutes)
  • Payload size for each message is 12 bytes (which may be a significant limitation for some applications)

Also unlike LoRaWAN, while Sigfox can theoretically carry data both from and to an end device, their network is optimised to send messages from the device to the network, for example a gas or water meter reading or an alarm. LoRaWAN, with a symmetric link, works well in command and control situations where data is sent from the network to the device. It also allows multicast, useful in patching or updating end devices over the air.

Business Model

Both Sigfox and LoRaWAN are broadly similar in offering a carrier service to the low power, long range segment of the market even though they operate with quite different wireless technologies.

The major differences arise from Sigfox being proprietary while LoRaWAN is really an alliance of companies (which includes KotahiNet) operating to common network specifications off Semtech’s patented LoRa radio technology.

The differences are therefore far more stark at a business model level. Sigfox operates a single, global processing and controlling network (which also means that all data flows through Sigfox’s servers) with a local network operator responsible for building out the network in a country. That’s Thinxtra for Australia and New Zealand.

On the other hand, LoRaWAN is an open implementation to specifications agreed by independent companies. Each of these companies, such as KotahiNet, have their own goals, business models, and interests. Standards that make it easier to roam across these independent networks is coming.

As a proprietary top-down global network, Sigfox sets specifications, pricing, licensing, etc. It’s business model is to drive down the price of end devices by giving away its endpoint technology to whichever silicon manufacturer or vendor wants it so long as they agree to certain business terms. Sigfox makes its money by network operators with exclusive territories paying it royalties (in some cases, it is also the network operator itself).

A key point therefore is that only Sigfox certified products can be utilised on its network while LoRaWAN follows an open approach of requiring only conformance to protocol specifications. Incidentally, the latter is how the Internet operates- no permission required, just adherence to protocol specifications. This is why the Internet has developed such a rich ecosystem and unleashed ‘permissionless innovation’ across the world.

Welcome Sigfox

Both Sigfox and LoRaWAN have their fans. It’s really horses for courses. The ‘right’ choice is situation specific and depends on network availability, total costs, features required, and risk management.

However, competition between Sigfox and LoRaWAN is a rather narrow view and misses the point. At this stage of the Internet of Things, the low power, long range network option is only just getting going. The real need is for better explaining how it fits with other options and the new innovative possibilities it opens up.

To do that, a well funded and marketing savvy company like Sigfox is a real asset. We therefore welcome Sigfox to New Zealand.




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