Avangrid, an electricity and natural gas utility counting more than 3.3 million customers across New York and New England, is testing a private wireless LTE network with equipment from Nokia and GE working on spectrum bands including 900MHz and 3.5GHz.
Importantly, the 900MHz spectrum Avangrid is testing comes from Anterix, a startup headed by former Nextel executives that's working to develop an entire private wireless ecosystem for US utilities around its spectrum licenses.
"We built a lot of pent-up demand that's really coming forward," Anterix CEO Rob Schwartz told Light Reading.
Indeed, Anterix just last year received FCC approval to lease its spectrum to utilities, and today Schwartz said the company counts two paying customers (which combined account for around $100 million in contracted proceeds), as well as 12 other utilities that are currently testing operations in the company's spectrum. Schwartz said Anterix expects to add another two to three customers to its roster this year, and is in discussions with a total of 50 different utilities. He suggested the company could count as much as $1.8 billion in contracted proceeds by 2024.
That's in part because interest in private wireless LTE has gone "viral" among utilities, Schwartz said, explaining that such providers often share information with each other. In that respect, Schwartz said utilities are like cable providers in that they often work together to improve services in their respective coverage areas.
Anterix, for its part, has been working diligently to create momentum behind its spectrum. The company has built an ecosystem of vendors and others around its 900MHz holdings; for example, Ericsson just this week said it would supply equipment for Anterix's customers.
Private wireless for renewable energy
Avangrid, for its part, told the FCC that it's looking to use a private wireless LTE network for a number of applications, including tracking the usage of renewable energy from such sources as solar and wind.
"Avangrid is exploring the potential for a private LTE (PLTE) network in the 900MHz spectrum in conjunction with, and under, FCC licensing by Anterix to reliably serve critical operational voice and critical operational data needs to meet today's smart grid reliability requirements, as well as future initiatives to reliably transport energy from diverse sources to achieve the renewable energy goals," the company wrote. Avangrid representatives did not respond to questions from Light Reading.
Other applications on an Avangrid private wireless network might include network resilience and reliability functions, remote monitoring and proactive preventative maintenance aimed at preventing outages, the company said.
That's noteworthy considering the White House recently announced a major new initiative aimed at improving the security systems protecting the nation's utilities. While the Biden administration's guidelines don't directly discuss the role of private wireless networks, Anterix's CEO said the administration's new efforts have helped move the topic forward.
"It highlights and elevates the importance" of private networks, he said, noting that "in order to be secure, you need to be separated" from the public Internet.
The value of spectrum
Avangrid joins other utilities like San Diego Gas & Electric (SDG&E), Ameren and the New York Power Authority in eying Anterix's spectrum for private wireless networking operations. Incredibly, SDG&E's recent deal with Anterix values the company's 900MHz spectrum licenses at more than $2 per MHz-POP. The per MHz-POP calculation is applied to most spectrum transactions and reflects the number of people covered compared with the amount of spectrum available, though it can be affected by a wide variety of factors.
Schwartz suggested that Anterix's other leasing agreements might not reach that $2 per MHz-POP level. He said Anterix expects its leasing prices to largely dovetail the prices set in recent FCC spectrum auctions, with some higher than that amount and others much lower. However, he did point out that the overall value of spectrum is increasing, based on the FCC's recent blockbuster C-band spectrum auction.
Some financial analysts believe Anterix is beginning to gain momentum in the market.
"While we do see continued risk that Anterix's primary targeted vertical, AAA-rated Investor Owned Utilities (IOU) requiring private broadband to orchestrate better command and control of their critical infrastructure, might look to other potential spectrum owners such as TerreStar, Globalstar, or CBRS auction winners that might offer terrestrial network alternatives, we also believe this risk is receding as Anterix enlists more potential customers in 900MHz pilot projects," wrote the financial analysts at B. Riley Securities in a recent note to investors.
Utilities remain the "bullet's eye of our focus," Schwartz said. But he added that Anterix isn't exclusively focused on the sector. He said the company could also expand into deals with players in adjacent industries like transportation of railroads "that likely have similar needs."
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