AT&T has been quietly linking up the next-generation of energy technologies as part of its growing machine-to-machine division. That’s including providing a network connection for a novel energy storage device based on ice from startup Ice Energy, Ed Davalos, Director of Product Management for Utility and Smart Grid solutions for AT&T, told me last week at the GridWise Forum. Nissan’s all-electric car the LEAF is also hooked up via AT&T, as are 7.5 million smart meters, according to AT&T.
The lineup is just the beginning for AT&T’s machine-to-machine plans, whereby the service provider uses its network to connect “things” — smart meters, industrial equipment, vehicles — instead of cell phones (see our report on machine-to-machine networks at GigaOM Pro, subscription required). AT&T wants to grow its machine-to-machine industry for a few reasons, including that consumers can be fickle customers, resulting in churn and continuous upkeep, and have to be convinced to renew contracts every two years.
In contrast, a smart grid utility deal, or a machine-to-machine customer, can be relatively low maintenance, often has a low cost of care, are expected to stick around a lot longer (10 to 15 years for utility deals), and generally has low bandwidth requirements. The bandwidth requirements for, say, the demand response signal for Ice Energy’s system, is peanuts compared to iPhone data hogs. And as Davalos put it to me, “meters are not calling you up and demanding things.”
In particular AT&T is looking to grow the number of utility customers that will connect every smart meter to its network. Most of the 7.5 million smart meters that are currently connected to AT&T’s network are largely backhaul customers, whereby a wireless mesh network operator (like Silver Spring Networks) connects the individual meters, and then on a deeper layer of the network use AT&T to connect the data from the meters back to the utility data center. But AT&T wants the potentially more lucrative deals for providing a link via each smart meter, which it is doing for 230,000 meters for Texas utility Texas-New Mexico Power (TNMP). Davalos called that customer win “a milestone.”
To convince more utility customers to connect meters via AT&T, the phone company over the past year or so, dropped its per meter pricing dramatically, says Davalos, from a cost of $10 per meter, to $1 per meter. At $1 per meter, AT&T’s offering became “extremely competitive,” says Davalos. And for that price, the utility gets high security, encryption, low latency (how long it takes for the data to traverse the network), and also “evergreen technology,” because AT&T is constantly upgrading its network.
Beyond the meter, AT&T is also trying to sell utilities a variety of other services, including voice and data corporate broadband accounts, data analytics services for smart grids, hosted and managed smart grid services, and even potentially one day an energy management product for consumers, says Davalos.
But while AT&T is trying to grow its machine to machine business, Davalos makes no bones about where the division stands in relation to cell phone accounts. “We manage 17 petabytes per day of day through our network operating centers, and machine to machine data is really small, like a fraction of a percent.” When I asked him if he thought machine to machine would ever be a “substantial business,” he replied “no.”
For more research on smart grid check out GigaOM Pro (subscription required):
- Smart Algorithms: The Future of the Energy Industry
- New Opportunities in the Smart Grid
- The Developer’s Guide to Home Energy Management Apps
Image courtesy of RaubDaub.