<SK Telecom’s engineers are testing the performance of a LoRa base station built in Daegu city in Korea.>

The price of LoRa, an IoT module that underlies SK Telecom’s IoT initiatives, dropped to under $5.00, which is almost half of LTE-M’s to be offered by others. This will allow SK Telecom to gain competitive advantage in price, helping to pave the way for expansion of IoT ecosystem through provision of affordable modules.

The company said they are deliberating to choose the final 4 suppliers of modules to be deployed in its nationwide IoT network. The unit price of a LoRa module, including a LoRa chip (usually priced at around $5.00 alone), was predicted to be around $10.00. But, the modules are known to be supplied to SK Telecom at the price as low as under $5.00 per each.

A module supplier said, “[The dropped price] will not allow much margin to suppliers, but we believe, once more modules become available helping the IoT ecosystem to expand, we should be able to create new business out of it.” “The price of LoRa that we supply to SK Telecom will likely be around $5.00.” The strategy of suppliers at the moment is to start with low margins, and then seek ways to be more profitable through introduction of new, relevant products or services as the market grows.

SK Telecom’s decision on module price drop can be seen as an effort to make LoRa-based devices more popular in the market. Earlier this year when the company shared its plan for building a nationwide IoT network, it also announced a plan to provide 100,000 modules, at no charge, to startups and SMEs, to accelerate expansion of IoT ecosystem in the nation, thereby creating new services and added value.

Once supplied, modules can be used not only for consumer products like wearables, but for industrial equipment as well, making IoT service be offered through a nationwide LoRa network.

The company said, “Remote metering, location tracking and monitoring are our key IoT services for now.” And it added, “Development of safety service for children and senior citizens are underway as well.”

Affordable module prices will likely result in introduction of a variety of new services, which will make it easier to attract more IoT subscribers. In addition, the company can also enjoy a comparative advantage in terms of price. KT and LG U+ are using LTE-M as their underlying technology for a nationwide IoT network.

According to a person familiar with the industry, the price of LTE-M module will be around $10.00. LG U+ has released an IoT-dedicated module priced at around KRW10,000 (about $10.00), which was quite affordable compared to the-then prices of modules, KRW30,000~40,000, but still higher than LoRa. LG U+ is planning to launch LTE-based (Cat. 1) IoT service shortly.

He added, “With nationwide IoT networks arriving soon, a sufficient number of modules to be connected to the networks should become available first. He also warned, “The competition in module price among operators will get even fiercer."