Recent advancements in the development and deployment of 5G reduced capacity (RedCap) technology is set to boost IoT opportunities, with ABI Research predicting 80 million RedCap modules will be shipped into the market over the next five years, with most of that growth driven by a new RedCap iteration.

The research firm noted that the 5G RedCap specification and market potential has drawn interest from chipmakers like Qualcomm, MediaTek, UNISOC, and ASR Microelectronics. These firms have been drawn to the flame that RedCap will provide a long runway in supporting low-power 5G use cases serving IoT and edge deployments.

The RedCap specification was released as part of the 3GPP 5G specification, which means it’s interoperable with 5G networks. It was basically designed as the 5G version of the narrowband-IoT or LTE-M specifications used in 4G LTE.

The RedCap specification itself limits spectrum use to 20 megahertz for sub-6 GHz bands and 100 megahertz for millimeter-wave (mmWave) spectrum. This allows for simpler and smaller antenna designs with one transmitter and one or two receivers, unlike the more complex multiple-input, multiple-output (MIMO) antenna designs required for full-feature 5G new radio (NR) devices like smartphones. This allows RedCap to reduce power requirements and makes it more applicable to edge devices that are often power constrained.

“5G RedCap is a series of network and device optimizations that strips back device complexity, acting as a natural successor to LTE Cat-4 and LTE Cat-6,” ABI Research analyst Jonathan Budd wrote. “It is a means of providing an affordable pathway to 5G for IoT device OEMs that do not require the full spectrum of 5G capabilities. The mid-tier LTE Categories have proven valuable in connecting IoT devices; RedCap delivers LTE-equivalent throughput performance, with assurance of network longevity into the 5G era.”

ABI noted that the next RedCap iteration, dubbed enhanced RedCap (eRedCap), will further reduce power requirements and goose adoption. This will allow eRedCap to tap into the already established field of low-powered 4G LTE use cases and account for 71% of the overall RedCap module market through 2029.

“As a replacement for LTE Cat-1 and Cat-1bis, eRedCap will be widely applicable in connecting devices across the IoT application landscape, and chipset and module manufacturers will seek to attain customer loyalty as early as possible,” Budd added.

This RedCap boost comes as the overall IoT module space has started to lag. ABI had previously noted that the overall IoT module space was down 5% in 2023 compared to the previous year.

“5G RedCap is creating an opening to drive 5G device volumes in the IoT domain,” Dan Shey, VP of enabling platforms at ABI Research, noted in the report. “The calculus by the 5G supplier community is 5G capabilities — low latency, location granularity and future-proofing against LTE sunsets will convince more customers to invest in these higher revenue products.”

The surge in RedCap interest is also set to bolster other edge efforts.

Dave Bolan, research director at Dell’Oro Group, earlier this year noted that the growth in RedCap adoption will also lead to greater uptake of multi-access edge compute (MEC) platforms and services.

“The market anticipates that the growth of the MEC market will be energized by the introduction of RedCap NR (reduced capability new radio) equipped IoT devices, bringing more 5G IoT devices to the market at lower price points,” Bolan wrote.

Telecom operators donning their RedCaps A number of telecommunication operators are starting to warm up their RedCap initiatives.

AT&T, for instance, recently commercialized RedCap access on parts of its 5G network. Jason Sikes, AVP for device architecture at AT&T, explained in an interview with SDxCentral that the 5G RedCap network initially began in Dallas and “a couple of other zones on the West Coast,” with plans to expand that reach toward eventual nationwide availability.

This commercial push involved integration across the network and device ecosystem.

“The way we think about it is we have to think end to end,” Sikes said. “So making sure we’ve got across all aspects, the device, the chipset, the RAN [radio access network], core, how we provision, how it’s set up in our system. We have to think about all of those things when we bring in new technology, any new technology in the market.”

The initial deployment is running on AT&T’s current RAN infrastructure, with plans to eventually port that support over to the carrier’s ambitious open RAN architecture.

The commercialized launch also required specific spectrum support for the RedCap service. Sikes noted that AT&T is initially using its 850 MHz frequency division duplex (FDD) spectrum for the service, and “adding additional plans as needed over time as we expand.”

FDD spectrum is typically fixed in splitting its channel capacity evenly between the uplink and downlink, while time division duplex technology allows operators to adjust the uplink and downlink capacity of a spectrum channel based on need.

Rob Holden, AT&T RedCap technology lead, said the RedCap service will complement the carrier’s already established LTE-M network, running as a higher-performing edge option for customers. It also provides a longer-term roadmap for specific IoT and edge verticals.

“Things like alarm panels or security POS type solutions, kind of low bandwidth requirements, industrial routers, all those sorts of areas I think are prime examples for where you could see RedCap used,” Holden said, adding there could also be use cases for body cameras and “a number of new solutions in the IT space.”

This could also play into the private 5G network space where RedCap devices could be integrated into specific use cases.

“There are always some situations where RedCap would be perfectly viable for private networks because you can have similar sort of applications in security or route-type applications where they’re in a private networking environment, those solutions would need to work within that private network environment as well,” Holden said. “It makes perfect sense from that standpoint.”

Analyst firms have also pointed to use cases tied to industrial wireless sensors, wearables, smart grids and fixed-wireless access (FWA) services.

“Although RedCap will not serve all IoT applications, its potential to augment operators’ IoT offerings and to support new market segments makes it a valuable opportunity,” Stephen Burton, research analyst at Analysys Mason, wrote in a recent report.