Colo.-based 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 could rise from $2.2 billion in 2009 to $4.9 billion by 2016, with much of this growth benefiting wireless operators, which could see a six-fold increase in smart-grid revenues during the forecast period.

According to Pike, two-way networks are integral to smart-grid deployments, including 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. As such, “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,” the research firm adds.

“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.”

On the flip side, Gohn admits “significant barriers” still remain when it comes to widespread adoption of public networks for smart grid applications. Pike’s research indicates many utilities still doubt whether carriers can:

  • Deliver 100-percent 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, Pike says, “public-infrastructure recurring costs may still be higher than private networks, and many utility regulatory frameworks favor capital expenditures versus ongoing operating costs.”

Even so, the firm forecasts that while private networks will retain the lion’s share of deployed smart-grid nodes, there still are plenty of opportunities for public carriers in this arena.

(Editor’s note: The June 2011 issue of Communications Technology magazine will include a substantive overview of the state of U.S. smart grids.)

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