How can T-Mobile, the fourth-largest cell phone carrier in the U.S., generate business in the face of dropping net additional subscribers and competition from low-cost cell phone companies? Get into the smart grid. Like AT&T and Verizon, T-Mobile is hoping to leverage its already built-out wireless networks to tap into the coming smart grid boom spurred by the stimulus package. On Thursday, T-Mobile plans to announce that it’s developing a durable SIM card that can be embedded in smart meters (as well as used for other industrial processes), and a new partnership with smart meter technology maker Echelon.
T-Mobile’s national director of Machine-to-Machine services, John Horn, told us that T-Mobile has been playing in the connected electric meter space for several years, including working with smart meter maker SmartSynch (AT&T has a deal with them, too), and he says the carrier has several utility pilot projects under way in the Pacific, Southwest and Midatlantic regions with an aggregate of “tens of millions” of smart meters. In some of those trials T-Mobile has been testing out its new smart meter SIM card, which is like the SIM card in your regular cell phone, but smaller — 5 by 6 millimeters — more durable and made of silicon, not plastic. Horn says the SIM, which can be connected to any of T-Mobile’s wireless networks, including 3G, can withstand the heat and environmental conditions of being outdoors in a smart meter much better than a standard SIM card.
One of the first smart meter makers to embed the new SIM is Echelon, which is also working with T-Mobile on a smart meter service that will run over T-Mobile’s wireless networks and, according to the companies, is significantly cheaper for utility customers. T-Mobile is just the latest phone company to drop its prices to attract utilities. AT&T and SmartSynch announced a similar deal last week. Horn said of T-Mobile’s smart grid price move: “We’ve broken historical pricing models.”
For now the big utilities with large smart meter rollouts like PG&E and FPL seem to be doing deals with companies like Silver Spring Networks to build out their own networks. But cell phone companies’ networks could be attractive to smaller and slower moving utilities that could see the option as easier and having lower upfront costs. AT&T and SmartSynch are working with Texas utility Texas-New Mexico Power.
At the Fortune Brainstorm Green conference I asked PG&E CEO Peter Darbee if he thought the cell phone companies were offering an attractive proposition to utilities, given that PG&E has chosen not to work with a carrier thus far. Darbee said that because the cell phone companies have already expended so much capital on their networks, and because they learned significant lessons when the industry switched over to IP-based networks, that they could come out real winners in the smart grid space. Darbee, who has a long telecom background himself, said that while PG&E hasn’t yet worked with a carrier, that doesn’t mean they won’t in the future.