In a cell phone market marked by fickle subscribers and competition from low-cost carriers, T-Mobile, the fourth-largest cell phone company in the U.S., has become the latest to tap the smart grid. This morning T-Mobile announced that it has developed a durable, tiny SIM card that can connect smart meters (as well as other machine-to-machine gear) to its wireless networks. Smart meter maker Echelon will be among the first manufacturers to embed the SIM and work with T-Mobile’s networks.
The smart grid is the power grid of the future, one laced with digital, networked intelligence — kind of like the Internet of electricity. Since more than $4 billion of the stimulus package was allocated to beef it up, phone companies like AT&T and T-Mobile have been dropping the price of renting space on their networks in order to entice utilities to use their wireless networks to connect smart meters to their control stations.
Problem is, there’s a growing list of companies like Silver Spring Networks building IP-based networks for utilities — Silver Spring has already inked deals with the likes of PG&E and FPL. And though the phone companies have been moving more slowly — according to T-Mobile’s national director of machine-to-machine services, John Horn, the company is doing pilot projects with utilities at this point — they are getting more aggressive on competitive pricing. Horn tells us that T-Mobile broke its historical pricing models to offer utilities a better deal with its Echelon partnership. (AT&T recently did the same.) The question now is whether offering automated cellular services will provide the revenue injection being sought by T-Mobile, which saw the number of net additions fall in the most recent quarter. Not immediately, but the smart grid is forecast to be one of the biggest revenue drivers in a decade — so even a small portion of that could help.