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12 January 2021

Anterix wins first customer for US utilities ‘network of networks’ platform

Anterix has been steadily building up a business as a private LTE networks provider in the USA, based on its ownership of a lion-share of the licensed portion of the 900 MHz spectrum band.

The company (formerly known as Pdv Wireless) is particularly focused on the utilities sector, where there is rising demand for private cellular networks that could support mission-critical response and other requirements of this industry, without requiring the costly build-out or upgrade of fully proprietary networks and spectrum.

Anterix is looking to license 900 MHz spectrum to utilities and has announced its first major customer, Ameren, which serves customers in Missouri and Illinois. The utility will have exclusive rights to use Anterix’s 900 MHz airwaves in its service territory for the next 30 years.

“This Ameren agreement is the turning point for us. It’s an inflection point,” said Anterix CEO Rob Schwartz, claiming that more than 40 utilities have expressed interest in private LTE since the FCC, in May, opened up 6 MHz of the 900 MHz band for broadband use. This helped to endorse the business model Anterix has been building up, and justify its investment in becoming the USA’s main owner of licensed 900 MHz spectrum.

Anterix is working on pilots with a number of utilities apart from Ameren, including Southern Company, the New York Power Authority, Exalon, Hawaiian Electric and Duke.

The Department of Energy’s National Renewable Energy Laboratory (NREL) has conducted a trial with Anterix that involved seven utilities and tested applications such as monitoring and control of renewable energy sources.

In particular, the company thinks its spectrum could enable a national ‘network of networks’ that could help utilities communicate and interconnect, sharing data and creating an ecosystem of devices and applications across all their respective smart grids. “This sector, uniquely, works together. They don’t compete with each other,” Schwartz told FierceWireless. “Utilities are individually solving the same problems, and so we’ve worked to bring them together.”

Ameren has already trialed 14 use cases for private LTE in 900 MHz spectrum, using Nokia radio equipment. One of its goals is to integrate distributed energy resources, to help meet its goal of net-zero carbon emissions by 2050.

Anterix has been building up its position as a provider for US utilities for some time, and it could provide a blueprint for other industry-specific private operators, which are expected to account for significant expansion of enterprise services in the 5G era. It owns about 60% of the 900 MHz spectrum licenses in the top 20 markets in the USA, and says it is looking to emulate, in the private networks space, what Cellular One did in the 1990s in public mobile services.

Cellular One was a brand that was shared by many independent wireless providers and helped them market their services under a recognized logo and to get better deals on equipment and devices, by negotiating collectively.

According to Schwartz, his firm wants to follow a similar path, as an enabler rather than a direct deployer or operator of private networks. The company would lease its spectrum to enterprises or private providers and help them build their networks. “We aren’t building a network,” he said. “We want to help customers understand it and help them with their implementation.”

He also helps to drive a body of knowledge and best practice in an immature sector, in industries where there will be limited understanding of how cellular networks work.  “We are talking to federal regulators, utilities and potential industrial users about how to build and fund these networks,” Schwartz said.

Schwartz became CEO in July 2020, replacing Morgan O’Brien. Both men were formerly executives at Nextel, which was also expert at identifying targeted services for specific industries and delivering them in unloved spectrum bands.

Anterix is targeting $150m in revenues by 2024 on margins as high as 80%. Until May, it was waiting for the FCC to approve realignment of the 900 MHz band (specifically 896-901/935-940 MHz) to free up space for cellular. Prior to this, the 900 MHz band plan had not been updated for more than 30 years and debates have raged for more than five years over FCC proposals to make it suitable for LTE, especially for industrial, IoT and private networks.

In most parts of the world, 900 MHz was used for 2G, while the sub-GHz unlicensed ISM spectrum was a bit further down, at 868 MHz. In the USA, the 900 MHz band was allocated for narrowband wireless, with a mixture of licensed and unlicensed usage. But companies like Anterix have been lobbying for years for it to be realigned to support LTE broadband wireless, with narrowband incumbents being moved to other spectrum within the band.

Most of the providers eyeing the spectrum for LTE would target private industrial and IoT networks, including those supporting critical communications. In the FCC’s scheme, up to 16 channels will be licensed in the band, for 15-year terms, and in 177 geographic areas. Companies who buy the licences would be required to set up two-way networks on the channels.

Anterix is hopeful that it will be in a strong position to buy spectrum on a nationwide basis. In late 2019 it raised a round of funding worth $100m and it is already the largest holder of 900 MHz spectrum in the USA, thanks to a deal to buy the spectrum and equipment from Sprint (which no longer needed the spectrum after it realigned its 800 MHz holdings, and which lost interest in 900 MHz when no broadband usage allowance was forthcoming). It holds, on average, about 60% of the 399 channels in the 900 MHz band in the top 20 metropolitan market areas, covering about 70% of the population, it states in its annual report.

In February 2019, Anterix created an industry group to promote private IoT networks to utilities. The Utility Broadband Alliance (UBBA) has at least 16 members, including Ameren, Cisco, Ericsson, General Electric, Motorola Solutions, Multi-Tech Systems and Sierra Wireless. Motorola has invested $10m in Anterix and also paid $7.5m to lease some of the smaller firm’s spectrum in 2014.