Back in the days before the pandemic when the big telecoms companies started rolling out 5G, big promises were made regarding the benefits the upgrade would provide to IOT devices. Faster speeds and ultra-low latency, we were told, would enable real-time data processing, instant device interaction and support for dense sensor networks.
Fast forward five years, however, and for many IOT fleet owners, the promise of 5G has remained stubbornly theoretical.
While consumer smartphones have made the jump from 4G to 5G with little controversy, a large chunk of connected devices have stayed put, not because the technology is inadequate, but because the economics do not add up.
A 5G modem can be two or three times more expensive than its LTE equivalent, a premium that makes little sense for devices sold on tight margins and expected to last for many years in the field.
“The problem is not that IoT customers don’t understand 5G,” said Dima Feldman, VP Product Management and Marketing at Sony Semiconductor Israel, speaking exclusively to IOT Insider. “The problem is that, for most devices, 5G gives them nothing they are willing to pay for.”
For network operators, keen to sunset 4G when possible and move everyone to 5G this is a problem. And for chipset makers, keen to encourage IOT customers to upgrade, this state of affairs is frustrating.
The solution, they argue, lies in producing a pared-back version of 5G designed specifically for cost-sensitive, long-lived devices.
So what is RedCap?
Nothing to do with coloured hats, RedCap (Reduced Capacity) 5G is a 3GPP-standardised variant of 5G that strips away much of the complexity that has made full 5G unattractive to most IoT manufacturers. Introduced in 2023, RedCap provides a more cost-effective, power efficient and simpler solution for many IOT devices that don’t need the fast speeds or low latency of full 5G.
Is that the same as eRedCap?
No, says Feldman. Short for ‘Enhanced Reduced Capacity’ 5G, eRedCap is what he describes as “an evolution” of the RedCap framework. Basically, while RedCap reduces 5G capacity significantly, eRedCap strips this back even further to a level which provides the basic bog standard services required by many mid-range connected devices but still benefits from the key advantages of 5G.
Most IoT devices are either uplink-heavy, such as cameras, or downlink-heavy, such as control systems. They are not built for unpredictable, high-bandwidth usage, unlike smartphones. Designing for peak performance, Feldman says, is unnecessary and wasteful.
So what devices is it suitable for?
Feldman points to a sharply segmented IoT market. At the lowest end sit ultra-low-power technologies such as LTE-M and NB-IoT, designed for devices that send tiny amounts of data and must run for a decade or more on a small battery. Water meters, smart locks, and basic environmental sensors fall into this category, where power efficiency matters more than bandwidth. Feldman says these devices use so little data, they are better suited to using a Low Power Wide-Area network.
At the other extreme are high-end 5G connections used in cars, industrial routers, and consumer electronics. Here, higher throughput and wider spectrum mean that customers accept the higher cost of both 5G modules and data plans.
But between these poles lies the bulk of the market: cameras, alarm systems, wearables, asset trackers, and consumer IoT devices that send more than a few kilobytes, but nothing close to smartphone-level traffic. These products, Feldman said, “don’t benefit from 5G at all, at least not in its current form”.
As a result, most have remained on 4G LTE, particularly Cat-1, even as operators increasingly signal their intention to re-farm spectrum and eventually shut down 4G networks.
What’s the tech behind it?
eRedCap is designed to change that calculation. Introduced later than standard RedCap, it further reduces processing requirements and, crucially, supports half-duplex operation, meaning devices transmit or receive data, but not both at the same time. This allows simpler radio components, lower power consumption, and fewer frequency-specific parts.
The result, Feldman argues, is a device architecture that is cheaper to build and easier to deploy globally.
“With half-duplex, we can design what we call a single-SKU device,” Feldman said. “You don’t need different hardware versions for North America, Europe, or Asia. That alone removes a lot of cost and complexity for manufacturers.”
Why is it important?
Although Feldman says most IoT devices will experience little or no functional improvement from switching to eRedCap, the big reason to invest in the tech is that it means devices can continue working when network operators eventually decide to shut down 4G networks.
“What you get is longevity,” he says. “Technically, you don’t get anything else.”
For operators, the pressure to migrate devices away from 4G is intensifying, driven by both cost and spectrum constraints. Running parallel 4G and 5G networks is expensive, particularly in rural areas where spectrum holdings may be limited to 5 MHz or 10 MHz blocks.
Looking further ahead, operators are already beginning to plan for 6G, widely expected to arrive in the early 2030s.
“Supporting three generations at the same time is not realistic,” Feldman says. “Historically, we support two, then transition. To prepare for 6G, 4G has to go.”
When should I upgrade?
While 5G deployments began around 2020, LTE continues to function well six years later. But with LTE first rolled out around 2010, the industry is now entering the window where sunsets become inevitable. In practice, Feldman says, most wireless technologies last around 20 years in the field, including overlap periods.
That creates a dilemma for IoT customers deploying devices today. Many industrial and consumer IoT products are expected to operate for 10 to 15 years, sometimes longer. Choosing a connectivity standard that may be switched off halfway through that lifecycle creates risk, operational cost, and, in some cases, stranded assets.
This, Sony Semiconductor Israel believes, is why some customers are now delaying decisions altogether, waiting for eRedCap to become available rather than committing to another generation of LTE hardware.
For now, eRedCap remains some way off. Sony Semiconductor Israel does not expect commercial devices to appear before 2028, reflecting the need for network software upgrades, interoperability testing, and product development. No region is yet ready, and even leading markets in North America and Europe are still in preparation.
When it does arrive, Sony expects it to coexist with LTE-M and NB-IoT rather than replace them outright. Ultra-low-power technologies will continue to serve niche applications, while full 5G will remain the choice for data-intensive devices.
Cost remains the critical variable. Sony expects early eRedCap modems to carry a premium of around 20% to 30% over current LTE modules, reflecting lower volumes and early-stage manufacturing. Over time, as adoption grows, Feldman expects prices to converge with LTE.
On the device level, the impact may be even smaller. “When you look at the full bill of materials, the modem is only one component,” Feldman says. “Displays, batteries, sensors, mechanics, all of that matters. The difference becomes insignificant.”
Could this change?
A further concern for the industry is fragmentation. The IoT sector has already lived through a period in which competing standards, notably LTE-M and NB-IoT, were adopted unevenly across regions, complicating global deployments.
With eRedCap, Feldman argues, the risk is lower. There are no rival standards within 3GPP, and chipset makers are building in fallback capabilities to ensure devices continue to operate even where 5G coverage is incomplete.
In practice, that means an eRedCap device might use 5G in dense urban areas, fall back to LTE Cat-1 in rural regions, and migrate over time as networks evolve. From the user’s perspective, performance differences would be minimal, as Cat-1 already delivers broadly consistent behaviour worldwide.
Is it sustainable?
As regulators and consumers become more sensitive to electronic waste, the prospect of devices becoming obsolete due to network sunsets is increasingly controversial. Would it not, in fact, be better to stick with what we’ve got?
No, Feldman argues. He says that, in practice, very few connected devices are designed to remain in service beyond 15 to 20 years. Components degrade, sensors drift out of calibration, and security requirements evolve. While some legacy infrastructure, such as electricity meters, may last longer, these are often not connected devices.
“It makes sense to replace devices periodically,” he says. “Not just because of connectivity, but because efficiency, security, and performance all improve.”
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