©2011 IDC Energy Insights #EI230124 Page 3
WANs and NANs become critical infrastructure for connecting themyriad of field devices. Since wireless networks enjoy distinct cost,deployment, and maintenance advantages over wireline networks,impressive growth for wireless network solutions has resulted.Increasingly, the viability of cellular network
based services isbecoming evident to utilities.
Carriers Driving Change and Adoption
Cellular communication service providers (wireless carriers) haveserviced the utility industry for over 20 years. Service offeringsrevolved around basic network access and data transport forcommercial and industrial (C&I) revenue meters and select remotetransmission and distribution (T&D) devices. However, wirelesscarriers began to compete in the U.S. smart grid market four to fiveyears ago. Utilities embraced the offerings with dispassion as thecarriers offered a suboptimal value proposition that did not addressutility and regulatory concerns for network security, control, andaffordability.Since that time, national wireless carriers responded to the utilitymarket with a greater breadth of competitive offerings, winningservice contracts as a result.The drivers for increased adoption and viability of cellular for smartgrid include:
Wireless carriers have aggressively loweredprices to increase the value proposition compared with alternativeprivate network solutions. For example, high-volume machine-to-machine (M2M) service contracts hovered at $10+ per month perdevice in 2008, dropping below $0.50 per month per device by 2010.
Transformers, line sensors, gateways, smartmeters, and a number of other devices from multiple vendorsnatively support cellular in hardware configurations.
in large-scale deployments. Cellular is areliable link in advanced metering infrastructure (AMI) networks.IDC Energy Insights estimates that close to 90% of endpointssupported by wireless mesh networks use public cellular networksfor backhaul.
Smart grid service offerings.
National wireless carriers launcheda number of core services including network access, security, anddata management, as well as emerging application services such asmeter-to-cash management and transformer monitoring.