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Looks like cell phone companies’ attempts to grab a piece of the smart grid market — potentially one of the biggest drivers of wealth in the next decade — are starting to pay off. This morning, Texas utility Texas-New Mexico Power (TNMP) says it will tap into the the partnership between smart meter maker SmartSynch and telco AT&T (s T) to roll out 10,000 smart meters at Texas homes. The companies say TNMP is the first utility to use the AT&T/SmartSynch deal, which was announced last month.
AT&T’s wireless network will connect SmartSynch’s smart meter technology back to the utility control stations. Though phone companies like Verizon (s VZ) have smart grid partnerships, too, AT&T has been among the most aggressive in using its wireless network to leverage the smart grid market. SmartSynch says the big advantage for a utility to use a phone company’s network is that the utility doesn’t have to put down the capital expense of building a proprietary network, but can, instead, rent space on the existing network.
The phone companies are interested in the smart grid because they’ve spent billions building out these near ubiquitous wireless networks, and can use utility smart grid needs as a steady revenue stream. Consumers can be fickle, with churn and continuous upkeep. By contrast, a smart grid utility deal is relatively low maintenance. Phone companies have started to increasingly move in the direction of adding on “machine-to-machine” applications, which don’t involve cell phone customers, and can diversify their networks beyond cell phone services. The smart meter traffic on the wireless network — largely real time pricing, but perhaps also demand response events — will also likely be pretty minimal compared to say a wireless video stream.
The big question is whether the phone company networks are offering the most cost effective option for utilities. PG&E’s Paul Moreno told the Wall Street Journal that PG&E had looked at working with a cellular carrier back in 2007 for its smart grid rollout, but decided it would be too expensive. Instead PG&E went with using an unlicensed wireless mesh network. Undercutting the cellular companies for smart grid is the hope of MuniFi maker Tropos, which announced this week that it will be packaging up its utility-scale Wi-Fi networks to connect smart meters, like those from Itron (s ITRI), to the utility. Tropos says that over a 5-10 year period Tropos network is cheaper than if a utility paid cell phone network fees.