If you don't own something, you don't really control it. This logic is a major reason why some utility companies want to own cellular networks rather than buying service from mobile operators.
Utilities don't want to compete with a public network's other customers for bandwidth in the aftermath of a storm or other major event. They also don't want to find out that the public network is down when they need it most because the mobile operator wasn't diligent about maintenance and redundancy.
"We had discussions internally about whether you have to own something to have control of it," says Gilles Robichon, machine-to-machine (M2M) telecom expert at Alliander Telecom, part of the Alliander electric and gas utility in the Netherlands. "We came to the conclusion that, yes, that's the case. We don't want to be a side product of the main product: the smartphone."
But as the new Heavy Reading 4G/LTE Insider, "LTE for Utilities: A Spectrum of Challenges & Opportunities," explains, ownership is easier said than done. Spectrum is the biggest hurdle: Utilities rarely can afford to bid against mobile operators in auctions, especially for beachfront property, such as 700MHz.
As a result, some utilities are forgoing Long Term Evolution (LTE) in favor of technologies that the mobile ecosystem is phasing out. For example, Alliander will deploy a CDMA 1X network for applications, such as command and control, even though most CDMA operators and vendors have begun migrating to LTE. That's surprising, if only because utilities prefer to leave meter modules and other gear deployed for a decade or longer.
So why CDMA? Because Alliander had access to 450MHz spectrum, where CDMA infrastructure and devices were available -- and will be for at least another 15 years via the utility's contracts with vendors. "It was not a choice for CMDA," Robichon says. "It was a choice for the 450 band."
Meanwhile, Australia's Telstra is an example of how some mobile operators are trying to overcome utilities' concerns about using a public network by providing priority service.
"They have already deployed a model called LANES, which gives LTE capability as though it were private, plus it allows migration on demand into the public LTE space," says Geoff Peck, Tait Communications chief technical architect. "In other words, they can ensure that peak demands can be met for these special case customers even in a crisis where the public system is congested. This is world-leading stuff and very smart."
LANES is noteworthy for another reason: It's also available to public safety agencies. In some countries, utilities argue that they should have access to public-safety networks, spectrum or both, such as FirstNet in the US. If successful, those initiatives would mean a bigger addressable market for LTE vendors -- not just because utilities would buy their equipment, but also because utilities might help fund FirstNet networks in exchange for access.
Make no mistake: LTE is the future of the utility market. But for now, spectrum is among the factors that keep legacy technologies such as CDMA and WiMax very much in the game.
— Tim Kridel, Contributing Analyst, Heavy Reading 4G/LTE Insider
This report, LTE for Utilities: A Spectrum of Challenges & Opportunities, is available as part of an annual subscription (6 issues per year) to Heavy Reading 4G/LTE Insider, priced at $1,595. Individual reports are available for $900. To subscribe, please visit: www.heavyreading.com/4glte.