Principal, Analysys Mason
Utilities have already begun their progress towards the UK’s 2050 goal of net zero, with the transition to smart energy systems taking place across millions of homes and businesses throughout the UK.
Underpinning these ‘smart’ developments is the need for telecoms network solutions (fixed and wireless) with ubiquitous, reliable coverage.
Herein lies a potential problem. Policy makers and utility regulators tend to assume that telecoms solutions exist or are easily provisioned. This overlooks the commercial challenge that transitioning to smart solutions requires a step change in the capability and coverage of telecoms networks, to communicate with devices on a utility network.
Utility networks need to transition from communicating with a few thousand devices to hundreds of thousands; and the range of applications increases the complexity of telecoms requirements.
The wireless networks of mobile network operators (MNOs) offer one possible solution, but their commercial return mostly comes from serving populated areas.
In contrast, utility networks require smart communications to increasing numbers of unpopulated locations. These contradictory positions create a tension between the commercial drivers of MNOs and the need to provide reliable, resilient telecoms solutions to utilities.
The Internet of Things (IoT) and 5G have the technical capability to meet the communications requirements of utilities. However, utilities are just one of many industry ‘verticals’ that MNOs serve and are probably the hardest to satisfy. This could mean that MNOs will prioritise their solutions for the ‘easiest’ verticals, creating tension between the commercial drivers of MNOs and utility requirements.
Now is a good time for the utility and telecoms sectors to work together, and for government to encourage dialogue to help them understand each other’s perspectives.
Private 5G network opportunities
Utilities could set up private 5G networks to meet their requirements, but face complexities regarding access and control of the spectrum. Many utilities argue that having access to their own dedicated spectrum is essential to give them full control over the network.
However, MNOs argue that they can use the spectrum more efficiently. Ofcom, as the communications regulator, has to balance these competing arguments. There is also uncertainty about who would take responsibility for investing in the deployment and operation of new private networks dedicated to utilities.
It will not be easy to unravel these complexities. The UK is not alone in facing these dilemmas – they exist globally. Although the market landscape for 5G private networks is nascent, it is attracting the attention of innovative service providers.
Now is a good time for the utility and telecoms sectors to work together, and for government to encourage dialogue to help them understand each other’s perspectives. Given the enormity of the net zero goal, it is vital to achieve better alignment.