Carrier backhaul costs become utility revenue.
By Jose Marques
It has been said that one man's challenge is another man's opportunity. The same is true with industries, where the utility industry has an opportunity as wireless carriers struggle to meet consumer demand for higher-quality, higher-bandwidth services.
Meeting that demand requires carriers to make ongoing investments in expensive infrastructure-more towers, more wires, more fiber. Yet, while connectivity and mobility have never been more important to consumers, they aren't willing to pay more for what they consider ubiquitous and unlimited access to the network for voice and data service.
Understanding the Opportunity
The only wireless component of a cellular connection is between the user device and the cell tower. Because bandwidth utilization is growing exponentially, the transport connectivity between cell towers and the core network, known as backhaul, is severely strained in many metropolitan areas. Further complicating matters is that, in most cases, high bandwidth requirements dictate the use of costly fiber to provide new backhaul capacity.
On the other side of this equation are the utilities. They often have excess fiber network capacity and are looking for ways to monetize it. The very thing that is vexing wireless carriers-the high cost of expanding infrastructure-becomes a revenue opportunity for utilities.
The question is, how can utilities maximize revenue while remaining attractive to carriers struggling to control rising costs? The answer: Measure and analyze. Unless you know exactly where excess capacity or the opportunity for expansion exists and whether it makes sense for your business to explore those opportunities, it's impossible to capitalize on them.
Utility operators need to develop analytic capabilities that can integrate carriers' tower demand projections to build better forecast models and create more proactive provisioning capabilities that enable faster deployment. They need to determine whether the costs of laying additional fiber-optic cable and going through regulatory hurdles are justified by the incremental revenue they'll receive from providing backhaul capacity to wireless carriers.
Joining the Cycle
Ten years ago, mobile technology was voice only. Five years ago, we had voice and limited data. Now we have full-motion video. In another few years, our smartphones will be our PCs. It's no wonder wireless bandwidth demands are constantly increasing at a tremendous pace.
Think of it as a virtuous cycle: Carriers create new technology to meet consumer demands. Those demands, in turn, force carriers to work hard to increase network capacity. Then, the increased bandwidth leads to better, more attractive technology for consumers, and the cycle starts over again.
Utilities can become an integral and profitable part of this cycle by exploiting existing assets and boosting capacity when and where it makes sense. To do that, they must have the ability to analyze all of the variables in an integrated fashion from a centralized environment.
Otherwise, one industry's challenge will become another industry's missed opportunity.
About the author: Jose Marques, director of marketing and strategy for telecom operation support systems at Teradata, has consulted with the utility industry for more than 15 years.