What will drive RedCap adoption? A carrot and a stick

Market drivers for RedCap adoption are expected to involve both the desire to join the 5G ecosystem, and eventual LTE sunsets

For a new technology, emerging is one thing. Taking off is another. And the forecasts for 5G New Radio Reduced Capability (RedCap) are relatively modest, all things considered, showing steady growth for the technology but that it is still expected to have a smaller share of connections than LTE through the end of the decade. Joe Madden, co-founder of analyst firm Mobile Experts, says that in his company’s forecasts out to 2030, there is not a point at which RedCap crosses over to become more prolific when compared to something like LTE-M.

Counterpoint Research expects that 5G RedCap modules will make up 18% of total cellular IoT module shipments by 2030—what it describes as “significant market potential, particularly in developing nations where the cost is key to wide technology adoption for digital transformation.”

“If we want to tackle some of these interesting business cases and really get the price point so the business can take off, then we need to provide the right types of options,” said Paul Harris, principal architect in the Office of the CTO at Viavi Solutions. “People don’t want to be paying for chipsets that are too performant in the wrong types of devices.” Harris also noted that standards work on RedCap continues, with a series of recommendations on reducing RedCap’s performance even further with support of just five megahertz of bandwidth, even lower data rates and reduced peak data rates as well as additional power savings in the form of Extended Discontinuous Reception (allowing longer periods during which a device can power off). While that work on “eRedCap” is still taking shape in Release 18 and additional features may be available to scale down RedCap further in Release 19. “It’s still kind of a moving target and probably will continue to be, but there will probably be different categories that get introduced of RedCap as it goes on,” he said. Harris goes on to offer up a potential vision of a RedCap market where there is a gradual progression into some parts of the market addressed with the initial Rel. 17 RedCap options, and that by Rel. 19, a scaled-back RedCap market could open up for even lower-complexity, lower data-rate devices that then leads to an explosion of 5G sensor devices.

So perhaps that full vision of digital transformation will actually be reached with 5G as the one-network-to-rule-them-all, with RedCap at its heart. But it certainly sounds like if that is achieved, it’s not going to be until a lot closer to 2030, if not after. 

Which is why the general consensus seems to be that RedCap, ultimately, will have both a carrot and a stick to drive adoption. That carrot is that it is part-and-parcel of 5G, the latest and greatest G, promising to shift IoT devices into the current generation of cellular at a reasonable price point and with some hope for future-proofing. 

“5G is absolutely the directional technology,” said Bill Stone, VP of technology development and planning at Verizon. “I do think it’s inevitable that we’ll be seeing all of IoT evolve over time, and it’s going to be starting as soon as next year. We’re going to see all of the IoT device community moving over to 5G, because that’s where—with 5G NR SA—we’re going to see the potential for much longer lifecycles [and] the ability to support that, to make commitments for longer-term support of IoT devices.” 

Stone also pointed that in order for IoT devices to on Verizon’s 5G spectrum assets, particularly its C-Band spectrum, they will have to be 5G (and 5G Standalone at that). “The only way to get there is through RedCap,” he said. He also noted that by the time Verizon is set to launch RedCap commercially (currently expected in 2024), it will have an expansive C-Band footprint in which those devices can operate in 5G SA mode. Verizon has not disclosed its 5G SA covered POPs, but it began moving commercial traffic onto its 5G core in late 2022. And as always, networks continue to evolve. “The bulk of our capability and capacity over time is moving into 5G, with C-Band, millimeter wave, and the conversion of other spectrum to 5G—that’s going to be another driving force, I think, behind the adoption of RedCap,” Stone said. “The capabilities that we’re going to have as we move further into the future with RedCap on 5G are going to become very attractive to the IoT community.”

So that’s the carrot: That RedCap is built for a 5G world and will evolve with it. The stick, then, is the eventual and inevitable network sunsets for LTE.

“Ultimately, we are going to be moving to this point where urban deployments, and the use of spectrum and things like this, are going to be moving toward 5G dominance,” said Viavi’s Paul Harris. Operators’ priorities will slowly but surely shift to the point where yes, LTE is still there, but the priority is on 5G and further evolution to 6G. And for some applications, particularly IoT devices with longer lifecycles like connected cars and smart grid devices, businesses and device developers already need to be thinking about what network technology they want those devices to be on, and which is likely to still be supported, in three or five or even 10 years.

Designers are already thinking about products that will come out several years from now,
according to module maker Fibocom’s David Lieber, director of the company’s North American sales. Fibocom (which uses Qualcomm’s chips) announced multiple RedCap modules earlier this year: its FG131 series, which is pin-compatible with Fibocom’s FG621 LTE Cat 6 modules so that users have a 5G upgrade path; and its FG132 series, pin-compatible with the company’s NL668 LTE Cat 4 modules for migration from Cat 4 without changing hardware designs. Fibocom’s modules are sampling as of late November, with commercial availability expected around the first quarter of 2024.

Faced with a choice between LTE and 5G, Lieber says that product designers would rather have 5G in their upcoming device lines — if they can get it at a reasonable price point. Lieber goes on to put one of the major market drivers for RedCap a bit more bluntly: “It’s going to be fear of the unknown. You don’t want to be caught on the wrong side of the technology. If you’re designing something for 2025, some sort of IoT product—let’s just say, a smart speaker for your house. Are you going to bet on a 4G technology when everybody’s talking about 5G?” Maybe not, especially if device OEMs can get 5G RedCap at half the price of a full 5G solution. Lieber said that he thinks RedCap will be the next big thing for anything that is remotely consumer-facing. “If you’re the big point-of-sale players, are you going to want to create your 2025 new line of point-of-sale products on a 4G technology?” he asks theoretically. LTE will still work alongside 5G for years to come, of course, but for product designers who have to think long-term and plan for their products’ life cycles, the LTE sunset is a bit too close for comfort—which Lieber says will ultimately be the “real impetus” for RedCap adoption.

Looking for more insights on performance, price and development of 5G RedCap? Download the editorial feature report “5G-enabled IoT: Will RedCap help deliver on the promise of digital transformation?” and watch the accompanying on-demand webinar, featuring Viavi Solutions and Fibocom.