There has been a strong undercurrent in our interviews over the last few months, where advocates argue that cellular connectivity is now a viable approach to smart metering, instead of the old way of doing it with proprietary RF protocols, legacy cellular connections, and a good smattering of Wi-SUN. Now with national smart metering programs potentially slowing down, it seems that a door might have opened for these advocates, into a very lucrative market.
The conventional thinking in the industry is that cellular has been too power hungry for gas and water metering, and that public networks should not be relied upon for mission-critical applications – meaning that proper connected/smart grid applications were off the table entirely.
Now, of course, the new licensed spectrum low power WAN (L-LPWAN) protocols mean that there are devices available with sufficiently low power draw to be used in these metering applications, and there seems to have been a shift in perspective, with regard to the importance of the meters. There now seems to be acceptance that an MNO’s public network could be trusted to provide connectivity for meter readings, and that this application could live separately from mission-critical smart grid networks, which still need private, highly optimized connectivity.
This would represent a marked shift in collective opinion, but we have seen this happen already, with regard to the role of the smart meter within a home. Sure, it would be nice to plug all these meters into the same core network that would handle the distribution of the utility consumables themselves, but the world of IT and cloud has moved considerably in the past 10 years, and now a containerized approach to applications is taking hold from the old monolithic mainframe architecture.
Similarly, the MNOs are just about waking up to the fact that there are millions of easy sales to be made, if they can nail the sales pitch for utilities. These are long term contracts, with very predictable revenue forecasts, which could be catered for using L-LPWAN, and then easily supported for the next 10-20 years, before 4G sunsetting becomes a concern.
So, while metering might become an opportunity for MNOs, we are less sure that the emerging smart grid control applications are going to be. This is not so much a technological problem, rather, the operations teams are not going trust a public network, no matter how the MNO slices it. Private LTE, built for and only used by the utility, might be an option, however.
The trend towards microservices and a containerized approach towards deploying applications might encourage the adoption of cellular in utility stacks. With this approach, the meters could be run alongside the legacy meters, as well as the smart grid applications, all united under one roof, in a cloud-based platform. This would allow all manner of networking protocols to be used in tandem, and this is certainly not a far-fetched idea.
Of course, many are opposed to the idea that these new L-LPWAN protocols should be used. The Unlicensed-LPWAN camp, which in this case includes Sigfox, LoRa and Wi-SUN, would all prefer that their respective technologies be used, but Wi-SUN is notably further ahead of its companions, because of its heritage in the metering and grid control markets. It helps that it can be deployed as a fully private network, and while LoRa supporters will argue that LoRaWAN can do the same, it does not have the same heritage as Wi-SUN.
We have seen Landis+Gyr and Itron, major meter vendors, begin to explore the LTE Cat-M and NB-IoT opportunity, with new designs, however, as with every single customer thinking about L-LPWAN, they are entirely dependent on the coverage footprints of the MNOs.
This factor is perhaps the best supporting evidence for the hypothesis that utility applications will leverage hybrid approaches. The MNOs are going to have L-LPWAN coverage in places where there are plenty of people, but are less incentivized to do this in rural or remote locations. So, utilities that opt for L-LPWAN in urban environments could still easily use U-LPWAN approaches to reach rural locations not covered by MNO networks, while being able to bludgeon the MNO with service level agreements should the MNO ever drop a meter reading that was meant to have travelled smoothly over its network.
In time, MNOs might expand their coverage out to reach every household in the land, but in the interim years, it is most cost-effective to deploy the new networking technologies where there are more people – because more people generally means more devices to connect, and therefore more sales opportunities.
This delay might work in their favor too, as the nationally mandated smart meter roll-outs lose steam. The delay between expected deployment targets and the reality on the ground has effectively bought more time for the MNO approaches, which is a tale that has rung true across many LPWAN use cases.
Every missed deadline is another chance for the MNOs to persuade a regulator that their incumbent networks are the answer to these delays – no matter how true that might actually be. The imbalance in sales power, for these massive contracts, between incumbent MNOs and scrappy LPWAN start-ups, is not going away soon.
So in the UK, the news that smart meter deployments fell in 2019 compared to the year before is good news for the likes of Vodafone, BT/EE and O2 (the recipient of a £1.5bn meter connectivity contract back in 2013). Although there was a late quarterly surge of 8.2% in Q4, the fact that the UK’s utilities managed a 500,000 unit drop in a year is something to be concerned about.
Notably, just 67% of the installations supported the more modern metering protocol, SMETS2, meaning that some 1.5m meters were installed on an outdated and widely despised protocol that was thought up by the UK as a way to differentiate itself from the rest of Europe. SMETS1 was a disaster from the off, and the roll-out has been widely bungled.
It is really quite perplexing that utilities are still deploying this technology, but for the MNOs, every SMETS1 installation is another straw that might finally break the camel’s back, and see the UK government award mass contracts to the MNOs – which might set a precedent both in the UK and abroad.