The utilities sector is a promising opportunity area for private LTE and 5G networks. But it is not an easy one for telcos to address, as utility companies often deploy and manage networking technology in-house or via specialist service providers to satisfy service requirements. This report examines the sector realities.

Private 4G/5G networks in the utility sector

This report examines the utilities vertical for private 4G/5G (P5G) cellular networks. It is intended to be both a specific examination of an important sector of opportunity for P5G and a more general example of the complexity of major industrial sectors, especially those blending specific sites with wide-area infrastructure and workforce requirements. It also covers opportunities for MNOs and other classes of communications service provider (CSP), and some of the public 5G angles, with additional references to alternative wireless networks such as LoRaWAN, Wi-Fi and satellite connectivity.

Often technology product and marketing executives think of industry sectors as monolithic (“finance”, “retail”, “oil and gas”), typically aligning with familiar industry classification codes. The truth is that each industry has multiple sub-sectors and varied site types, numerous applications, several user-groups, arrays of legacy systems and technology vendors, and differing attitudes and affordability of wireless solutions. This is especially true of utilities, where wind farms and power stations share only limited technology or use case overlap with water pipelines, or gas and electricity remote metering networks.

The utilities sector is further complicated by two other factors:

• Overlap with the public sector. Not only does it constitute an important part of countries’ critical national infrastructure, but in many cases major utility providers have a history of national or regional state ownership or are still owned and run by governments.
• Overlap with the telecoms sector. While utilities need networks, telcos need power. This co-dependency has important implications for avoiding single points of failure. There are also links with the use of utility assets (such as poles) to support fixed and mobile network elements. Some utility providers also compete with traditional telcos, as they operate and sell their own telecom services to consumers and businesses.

There are also many sector-specific regulatory angles, which often translate to conservatism about technology, and a tendency to develop custom solutions and standards. Investment cycles can be exceptionally long and sometimes politicised, with assets often expected to be in place for decades. On the positive side, the strategic importance of energy and water can mean that the sector receives special attention in areas such as spectrum allocations.

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Definition of the utilities sector

Numerous sub-sectors and site types are covered in this report. Although there are many common features – notably their inclusion as part of any country’s critical infrastructure – there are also clear differences in locations’ physical size and layout, as well as equipment and application platforms, legacy/alternative wireless technologies, regulatory oversight and technology conservatism. See below.

Multiple sub-sectors for utilities vertical

Source: STL Partners, Pixabay.com

The key domains covered by this report include:

• Electrical utilities, from generation (wind, solar, oil/gas, nuclear, hydro) to transmission networks and local distribution, as well as remote metering. EVcharging is adjacent but can also be included here.
• Water utilities, including reservoirs, dams, pumping stations, waste treatment facilities, combined heat/power and pipelines.
• Natural gas production, transport and local distribution – including domestic and business supply, international liquefied natural gas (LNG) shipping and terminals, pipelines and storage facilities.

There is also significant overlap with various other sectors, such as oil and gas, especially shipping/pipelines, storage, refineries and end-product distribution and retail sites. Some industrial plants have their own private power generation facilities, as well as large-scale connections to the electrical grid and water/gas pipelines.

Utility sectors intersect with several adjacent verticals

Source: STL Partners

In the future there are likely to be new utility-related areas such as hydrogen infrastructure, large-scale energy storage, new nuclear facilities including small modular reactors and carbon capture plants.

Differences between utilities and other verticals for P4G/P5G

While there are parallels between all sectors in terms of communications needs, there are several aspects of the utilities industry that mean that the shape of private cellular networks are often different to the rest of the economy. That has a range of implications for vendors of equipment and service providers.

• High reliance on remote monitoring and control of equipment.
• Long history of on-site and wide-area wireless, including P25/TETRAprivate radio, microwave fixed links and a wide variety of IoT/machine to machine (M2M) networks.
• Own-fibre networks, especially alongside power grid and pipeline networks.
• Scope for dedicated spectrum allocated by regulatory agencies, which may be used for a single shared national utility-oriented private network.
• Designated as critical infrastructure by most governments, with a range of unique rights and responsibilities.
• May require six nines 99.9999% reliability and availability, compared to normal telco five nines.
• Mix of deep rural and dense urban environments spanning most countries’ entire land mass and sometimes offshore regions.
• Requirements for specific safety and operational security certification and unique product needs/standards (e.g., protection from electrical interference).
• Mission-critical need for genuine low-latency networks and air-gapped backup systems.
• Large emphasis on outdoor connectivity vs. indoors (which tends to mean less competition/substitution of private networks with Wi-Fi).
• Particular requirements for “long and thin” private networks along high-voltage or pipeline routes.
• Less scope for international replicability of deployments – most energy companies and infrastructures are highly national, even if there is some level of ultimate foreign ownership.

Table of Contents

• Executive Summary
  • Overview
  • Recommendations for traditional mobile operators
  • Recommendations for utility companies
  • Recommendations for regulators and policymakers
  • Recommendations for vendors
• Introduction
  • Definition of the utilities sector
  • Differences between utilities and other verticals for P4G/P5G
  • Sector trends and drivers affecting private networks
• Use cases for 4G/5G in utilities
  • Scale of utility private networks
  • Use cases for private 4G and 5G in utilities
  • Examples of utility private networks
• Supply and regulatory trends for utility sector private networks
  • Private vs. public cellular networks in utilities
  • 5G vs. other wireless technologies
  • New service provider classes and delivery models
  • Spectrum
  • Regulatory and policymaking considerations
  • The vendor landscape
• Conclusions and recommendations
  • Conclusion and long-term futures
  • Takeouts for traditional MNOs and telcos
• Index

Related research

• The private networks ecosystem: Who to partner with
• Transport and logistics: The role of private 4G/5G

 

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