Smart meters are one of the hottest topics in the news these days. By adding intelligence to the domestic energy counters, smart metres, and their corresponding sibling, smart grids, now promise to yield a unique set of digital data for both the consumer and the energy industry. The benefits are pretty obvious. By seeing details of their usage, consumers can identify areas of inefficiencies. Power companies get a clearer picture of consumption on their network and can execute better capacity planning and deployments. All this requires a core communication infrastructure to relay and process the information.
As a follow up to our initial coverage of his report, Sam Lucero, senior analyst, M2M Connectivity at ABI Research, talks to Green Telecom about the opportunities, deployment scenarios, and market challenges presented to the telecoms industry as smart meters go mass market.
Green Telecom: One of the key trends identified by your report seems to be the need for connectivity solutions between the metres themselves and the utility, what are some of the deployments scenarios (i.e. cellular operator, home network-to-Internet, etc)?
Sam Lucero: Deployment scenarios:
Utility deploys powerline carrier or fixed RF infrastructure at the local level for “Neighbourhood Area Network” connectivity, whereby a cluster of smart meters are aggregated through a concentrator/gateway for backhaul of communications to the utility’s back-end infrastructure. The utility can deploy its own backhaul network (eg fiber ring or private wireless WAN), or use cellular backhaul. This is the most common scenario for mass market/residential smart meter deployments. Utility can use cellular connections to each individual meter. This is not common, except in Scandinavia and for utilities trying to reach more rural/geographically dispersed smart meters. “Non-meter” meter data connectivity. The homeowner’s broadband connection, or a non-smart meter gateway device, can be used to transmit smart meter data back to the utility and utility communications to the smart meter. This is not common.
Obviously, smart meters will be deployed by the power utilities, but does the telecoms sector have any play in this area – such as partnerships, specialized solutions, etc?
The telecom sector has various plays in this area:
Mobile operators can provide backhaul and direct to meter connectivity, either as a standalone service or in conjunction with a bundle of data and voice services to the utility. Sometimes this is done through direct sales to the utility or in partnerships in conjunction with members of the utility value chain (eg AT&T’s partnership with meter maker Itron). Cellular module providers and modem makers provide the radio interfaces at the meter and concentrator that enable communications to take place.
In the chapters listing, there’s mentioned of some interesting new business developments, such as M2M operators, is this happening already? Are some operators being set up just to serve the M2M market?
Yes, there are specialized types of cellular service providers that are oriented toward the needs of M2M customers, including utilities in the smart metering space. Some key names in this segment include Jasper Wireless, KORE Telematics, Aeris, and Numerex.
Will the introduction of M2M require new business models (pricing structures, network configuration, etc?)
Yes, M2M applications typically feature devices that use lower bandwidth and communicate more infrequently than human-centric mobile voice/data devices, in addition to other specific needs (eg the devices must be able to be remotely managed as there is no user to take drop it by a retail outlet if something goes wrong!) Typically, M2M cellular services range in monthly ARPU (average revenue per user) from $2 – $15 US per month, while the typical voice/data handset subscriber would be looking at $50 – $100 US per month. So, there are vast differences in pricing, network configuration, and on-going management, and this is a key reason for the development of specialized players such as those mentioned above.
What kind of bandwidth will smart meters require on the telecommunications network?
Per individual smart meter, basic meter reading and limited demand response functionality should only require a very limited amount of bandwidth, perhaps a few KB per month. But this is really variable, depending on the exact functionality desired. In general, though, M2M applications require much less bandwidth than handset voice/data communications; bandwidth constraints are not a problem in the M2M market.
Are applications (Google’s PowerMeter for one) being developed to support smart meter deployments?
Yes, there are a variety of applications being developed to support demand response and Home Area Networking (HAN) functionality. Google’s PowerMeter is just the latest.
Do you anticipate utilities coming in and offering their own connectivity solutions (i.e. powerline tech, MVNO)?
This is already being done to a large extent in North America (where utilities have more of a track record in deploying their own communications infrastructure than in other parts of the world). However, we believe that utilities are increasingly relying on cellular infrastructure for backhaul communications; in most instances, we believe it is more economical for the utility to rely on public infrastructure, than it is to deploy its own communications infrastructure.