For years, the cellular IoT story was supposed to be about purpose-built networks. LTE-M and NB-IoT were designed from the ground up for connected devices, promising long battery life, deep indoor coverage and low module prices. Industry conferences were full of them. Operators built them out country by country.
Yet when IoT Analytics published its latest count of cellular module shipments in September 2026, the technology driving growth was neither. It was LTE Cat 1 bis, a stripped-down version of ordinary 4G that few people outside the industry have heard of. In the first half of 2026, Cat 1 bis accounted for more than half of all the growth in cellular IoT module shipments.
That result says a lot about how device makers actually choose connectivity. It also comes with a catch: after years of falling prices, the cost of cellular modules has started to rise again, and the supply of those modules is concentrated in a small number of Chinese companies.
What Cat 1 Bis Actually Is
The name sounds technical, but the idea is simple.
One Antenna, Ordinary LTE
LTE, the standard behind 4G, comes in categories that define how fast a device can send and receive data. Category 1, usually shortened to Cat 1, is one of the slowest, offering peak speeds of around 10 megabits per second down and 5 up. That is far below what a smartphone uses, but more than enough for most connected equipment.
Standard Cat 1 devices need two receive antennas. Cat 1 bis, added to the 3GPP standards in Release 13, allows a single antenna instead. That small change matters. One antenna means a smaller, simpler and cheaper device design, which is exactly what makers of trackers, terminals and meters want.
Crucially, Cat 1 bis runs on the same LTE networks that serve phones. It does not require operators to switch on special features or build separate IoT networks.
How It Compares With LTE-M And NB-IoT
LTE-M and NB-IoT belong to a family often called LPWA, or low-power wide-area, cellular. Both were designed for devices that send small amounts of data and must run for years on a battery. NB-IoT in particular excels at reaching meters in basements and other hard-to-reach places. We covered how these networks fit into the wider low-power landscape in our explainer on the networks built to whisper.
Cat 1 bis makes different trade-offs. It is faster than LTE-M and much faster than NB-IoT, supports voice and handles moving devices easily. In exchange, it generally uses more power, which makes it a better fit for devices with a mains supply, a vehicle battery or a rechargeable battery than for sensors expected to last a decade on a single cell.
The Numbers From H1 2026
The latest figures come from IoT Analytics, whose H1 2026 cellular module report tracks shipments by technology, vendor and application. IoT Business News summarised the findings on 17 September.
A 15% Rise In Module Shipments
Global cellular IoT module shipments grew 15% year on year in the first half of 2026. Growth accelerated as the year went on: shipments in the second quarter were 20.9% higher than a year earlier and 15% higher than in the first quarter.
That is a healthy recovery for a market that had spent much of the previous few years dealing with inventory corrections and cautious enterprise spending. It suggests device makers are building again, and building with cellular.
Cat 1 Bis Carries The Growth
Within that total, Cat 1 bis stood out. Its shipments rose 34% year on year in the first half, accounting for 56% of all incremental module shipments. In the second quarter alone, Cat 1 bis shipments grew 45.3% over the first quarter and made up around three-quarters of the overall increase in cellular modules.
IoT Analytics expects Cat 1 bis to reach 43% of the cellular IoT module market by 2030. The applications driving demand include asset trackers, point-of-sale payment terminals, IP cameras and smart meters.
Why Cat 1 Bis Won
None of this means LTE-M and NB-IoT have failed. Both are widely deployed and remain the right choice for many battery-powered devices. But Cat 1 bis has won the volume contest for several practical reasons.
It Works Almost Everywhere LTE Does
Because Cat 1 bis uses standard LTE, it can connect wherever there is a 4G network. LTE-M and NB-IoT depend on operators enabling them, and coverage and roaming support for those technologies still varies from country to country.
For a company shipping one product design into many markets, that difference is significant. A Cat 1 bis device can reasonably expect to find a network in most places with 4G coverage. An NB-IoT device may find the technology switched off, unsupported for roaming or configured differently in the next country.
Enough Speed For Cameras And Terminals
Many of the devices now being connected need more than a trickle of data. A payment terminal must process transactions quickly. An IP camera sends images or short video clips. A vehicle tracker may carry diagnostic data and receive firmware updates. The applications IoT Analytics lists as Cat 1 bis drivers share this profile: moderate bandwidth, frequent communication and, usually, access to external power.
For these devices, the extra power draw of Cat 1 bis is a small price for faster data, easier roaming and a simpler certification path.
A Home For Devices Leaving 2G And 3G
The retirement of older networks is another force. Operators around the world have been switching off 3G and, increasingly, 2G to reuse spectrum for 4G and 5G. In the UK, for example, the 3G sunset is effectively complete, according to a recent piece from connectivity provider Eseye, with 2G shutdowns planned by the major operators from 2029 and an industry deadline of 2033.
Millions of devices built for 2G and 3G, from alarm panels to vending machines, need a replacement. For many of them, Cat 1 bis offers the most direct path: similar or better data rates, broad coverage and moderate cost, without the redesign that a move to an LPWA technology might require.
What It Costs
The rise of Cat 1 bis has been helped by falling module prices. That trend has now paused.
Power Compared With LPWA
The first cost is energy. Cat 1 bis modules generally draw more power than their LTE-M and NB-IoT counterparts, especially when idle for long periods. Power-saving modes defined in the LTE standards can narrow the gap in some designs, but for a sensor expected to run for many years on a small battery, LPWA technologies usually remain the better choice.
That is why the technologies are best seen as complements. Cat 1 bis has taken the powered and rechargeable end of the market. LTE-M and NB-IoT continue to serve the long-life, battery-powered end, where every microamp matters.
Prices Are Rising Again
The second cost is money. According to IoT Analytics, the blended average selling price of cellular IoT modules rose about 2.5% year on year in the first half of 2026. That ended four consecutive quarters of annual price declines.
The cause lies in components rather than radios. The research cites pressure on memory, resistors, capacitors and printed circuit boards, along with longer lead times. For device makers, it is a reminder that module costs depend on the wider electronics supply chain, not just on competition between module vendors.
A 2.5% rise is modest on its own. But for companies that planned products around steadily falling module prices, it changes the arithmetic, particularly for high-volume, low-margin devices such as trackers and meters.
The China Factor
The most striking part of the data concerns who makes the modules.
Chinese Suppliers Dominate Volume
The five largest cellular IoT module suppliers by shipments in the first half of 2026 were all Chinese: Quectel, China Mobile, Lierda, Fibocom and Sunsea AIoT. Outside China, Chinese vendors accounted for roughly 59% of shipments, compared with 35% in 2018.
Quectel alone held about 38% of shipments outside China, with Fibocom at around 10%. Chinese suppliers also grew their automotive module business by about 33% year on year in the first half, against 12% growth for the automotive segment overall.
What It Means For Buyers Outside China
For device makers, the concentration of supply brings both benefits and questions. The benefit is choice and price: competition among large Chinese suppliers has pushed module costs down for years and produced a wide range of products.
The questions concern resilience and regulation. Some governments and large enterprises have become more cautious about where connected components come from, particularly for critical infrastructure. Buyers designing long-lived products now weigh not only price and performance but also supply risk, certification in their target markets and the policies of their own customers.
Non-Chinese module makers, meanwhile, are adjusting. Swiss company u-blox has left the cellular module business, and in August 2026 Semtech agreed to sell its cellular modules, the former Sierra Wireless business, to Compal. Both moves suggest how difficult it has become to compete on volume.
Where LTE-M And NB-IoT Still Lead
It would be a mistake to read the shipment figures as a verdict against the purpose-built technologies. Volume tells one story; fit tells another.
NB-IoT remains well suited to devices that sit still, send small readings and must reach difficult places, such as water and gas meters in pits and basements. Its narrow signal is designed to reach places where ordinary LTE struggles. For utilities that deploy millions of such devices and expect them to run for well over a decade, that coverage and battery life can outweigh the flexibility of Cat 1 bis.
LTE-M occupies a middle ground. It supports moving devices and modest data rates while still offering power-saving features aimed at battery operation, which makes it a common choice for wearables, some trackers and alarm devices.
The practical picture is a split market. Powered devices that move data regularly are moving to Cat 1 bis. Battery-powered devices that report rarely continue to favour LPWA. Many device makers will use both across their product ranges.
What Device Makers Should Weigh
For companies choosing connectivity for new products, the H1 2026 data does not point to a single right answer. It does suggest a set of questions worth asking early.
How is the device powered? If it has mains power, a vehicle battery or a rechargeable cell, Cat 1 bis is likely to be a strong candidate. If it must run for many years on a primary battery, LTE-M or NB-IoT will usually serve better.
Where will it be sold? Products shipping into many countries benefit from Cat 1 bis’s reliance on standard LTE. Products for a single market with strong LPWA coverage may not need that flexibility.
How much data does it send? Cameras, terminals and devices that receive frequent updates need the bandwidth Cat 1 bis provides. Simple sensors do not.
How exposed is the bill of materials to price changes? With module prices rising again, it is worth building some headroom into cost plans rather than assuming continued declines.
Where do the modules come from, and does that matter to your customers? For some markets and industries, supplier origin now carries as much weight as price.
A Practical Winner
Cat 1 bis is not the most elegant technology in cellular IoT. It was not designed from scratch for machines, and it does not match the battery life of LTE-M or NB-IoT. Its success is a product of practicality: it works on networks that already exist, carries enough data for a growing class of devices, fits neatly into the gap left by 2G and 3G, and has been pushed hard on price by large suppliers.
The latest numbers show that practicality winning in volume. They also show the market entering a less comfortable phase, with prices edging up and supply concentrated in fewer hands. For the people who design and buy connected devices, the lesson is familiar: the best technology on paper matters less than the one that is available, affordable and supported wherever the product needs to go.
