Smart Grid Service Revenues for Fixed and Wireless Network Operators to Reach $4.9 Billion by 2016
Published on: 21st Dec 2010
Note -- this news article is more than a year old.
Two way communications networks are integral to the fabric of utility smart grid deployments, from wide area networks (WANs) that enable substation automation and distribution automation to neighborhood area networks (NANs) for smart meters to home area networks (HANs) that support home energy management applications. One of the fiercest debates in the emerging smart grid industry has been over the use of private utility networks versus public networks operated by fixed and wireless service providers.
A recent report from Pike Research forecasts that, while private networks will continue to represent the majority of the smart grid communications market, the revenue opportunity for service providers will increase significantly, rising from USD2.2 billion in 2009 to USD4.9 billion by 2016. The cleantech market intelligence firm anticipates that much of this growth will benefit wireless network operators, who will enjoy a six-fold increase in smart grid revenues during the forecast period.
"Public carrier networks offer utilities the ability to leverage existing infrastructure rather than building and operating their own networks," says research director Bob Gohn. "And while service costs have traditionally not been as low as utilities would like over the past few years, public carriers are now getting more aggressive in their pricing, which we expect will yield significant dividends in the form of expanded utility contracts over the next several years."
However, adds Gohn, significant barriers still remain to the widespread adoption of public networks for smart grid applications. Many utilities still doubt whether carriers can deliver 100% network coverage over the smart grid deployment footprint, guarantee prioritization of their data traffic over shared network infrastructure, and assure service availability over long-term metering deployment lifecycles. In addition, public infrastructure recurring costs may still be higher than private networks, and many utility regulatory frameworks favor capital expenditures versus ongoing operating costs.
For these reasons, Pike Research forecasts that private networks will retain the lion's share of smart grid communications nodes deployed, but regardless, the opportunity for public carriers remains a significant one.