October 6, 2016
Comcast Corp. (Nasdaq: CMCSA, CMCSK) is preparing two smart city trials to begin before the end of this month, focusing on business-to-business applications. The communications conglomerate is working with Semtech Corp. (Nasdaq: SMTC) to set up LoRaWAN wireless networks in San Francisco and its home town of Philadelphia, and has issued an open call for companies that might want to participate.
Assuming success with the first two trials, Comcast and Semtech expect to install LoRa networks in as many as 28 more US cities in the next 18 to 30 months.
Comcast joins a small number of Tier 1 network operators with public plans for commercial rollouts of IoT networks. Others are mostly wireless companies, including AT&T Inc. (NYSE: T) and SoftBank Corp. (See LoRa Enters SoftBank's IoT Harem.)
Comcast is the first cable company among this small coterie, but might not be the last. Semtech President and Chief Executive Officer Mohan Maheswaran said Semtech is in talks with other cable operators, as well as other MNOs and other enterprises. Other IoT network companies no doubt are as well.
Another clear sign that Comcast is not the only cable operator interested in IoT networking is that the SCTE today announced it has formed an IoT standards working group. The group elected Chris Cholas, gateway solutions architect for Intel Corp. (Nasdaq: INTC), to be its first chair.
Comcast's IoT service, called machineQ, will rely on Semtech's LoRa Wireless Radio Frequency Technology. The initial trials will focus on use cases such as utility metering, environmental monitoring (e.g., temperature, pollution, noise), and asset tracking through LoRa-enabled devices and network services. Another component of the trial will be enabling partners to gather, transmit and analyze data from connected devices distributed throughout their organizations.
While the initial focus is on business-to-business and machine-to-machine connectivity, there is potential to expand the scope of the project to include residential services.
Comcast also has the option of using the geolocation capabilities inherent in LoRaWAN networking, which Semtech announced earlier this summer. With precise network timing, and using high-resolution time-stamping of packets, LoRa-based networks can analyze signal transit times from multiple base stations and triangulate on the end node position to the nearest block. It might not be quite as precise as GPS, but it has the advantages of being inherent in the system, and using significantly less power than GPS.
Semtech made Comcast's decision to roll out wireless IoT networks somewhat easier by offering Comcast warrants to buy up to $30 million worth of shares of Semtech for just a penny a share over the next 30 months. (Semtech's stock has been trading around $25 a share in recent months.)
The schedule of the warrants will be based in part on Semtech meeting performance goals as the partnership progresses. The goals include covering 50% of the population in each city that machineQ is rolled out in.
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Rolling out a national network is quite an investment for a company of any size, Maheswaran said in a conference call with analysts. "They wanted us to have some vested interest in them, and now we do," he said of Comcast.
Any revenue Semtech eventually might get from the partnership will come from two sources. Semtech will get a slice of the revenue from services that Comcast sells based on the LoRa networks it installs. Comcast will also pay Semtech if it opts to use LoRaWAN geolocation.
The rest of the cable industry is laying low, as MSOs are wont to do whenever the subject of future plans comes up. Many cable operators absolutely do have IoT-based services on their roadmaps, they're just not saying when or how yet.
But the fact that SCTE and its global arm, the International Society of Broadband Experts (ISBE), set up an IoT Working Group within the SCTE/ISBE Standards Group, is instructive.
SCTE CTO Chris Bastian said multiple MSOs are supporting the working group, and that approximately two dozen MSOs and vendors have representatives sitting on the subcommittee, though he declined to identify any of them other than the chair -- Intel's Cholas.
Cable has some advantages to being the network for IoT applications, Bastian told Light Reading, some of them based on the fact that it's landline. You can use the network to power sensors and devices. There is less variability (which is to say, more dependability) in terms of throughput, peak and minimum speeds and latencies.
Furthermore, DOCSIS networking has built-in security. If a service has an SLA, Bastian noted, inherent security can end up being a critical differentiator.
— Brian Santo, Senior Editor, Components, T&M, Light Reading
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