Narrowband Internet of Things (NB‐IoT) is a cellular based promising low‐power wide‐area network (LPWN) technology standardized by the 3rd Generation Partnership Project (3GPP) in release‐13 as a part of the future 5th Generation (5G) wireless communication systems. The main design target of NB‐IoT was to enhance radio coverage by repeating signal over an additional period of time for the ultralow‐end IoT devices that would be operated in extreme coverage environments. But the power efficiency of the low‐cost NB‐IoT user equipment (NB‐IoT UE) in the uplink is the major concern. Coverage improvement from signal repetitions depends on the channel estimation quality at extremely bad radio conditions. The typical operating signal‐to‐noise ratio (SNR) for NB‐IoT is expected to be much lower than the zero. In this paper, we have proposed two efficient narrowband demodulation reference signal (NDMRS)‐assisted channel estimation algorithms based on the conventional least squares (LS) and minimum mean square error (MMSE) estimation methods. The theoretical analysis and the link‐level performance of our proposed estimation methods are presented. Simulation results exhibit that the proposed methods provide better estimation precision compared to the traditional LS and MMSE methods at the low SNR situations. Furthermore, we have analyzed the raised‐cosine (RC) and square‐root‐raised cosine (RRC) pulse shaping to reduce peak‐to‐average power ratio (PAPR) as an uplink transmit filter. The PAPR values are evaluated through extensive computer simulations for both single‐tone and multi‐tone transmissions. Our evaluation results vindicate that the RRC pulse shaping with lower PAPR values is feasible to design of practical NB‐IoT uplink transmitter and increases power efficiency.