FierceTelecom's 2011 Predictions: Utilities, telcos will continue to align

Telecom providers and utilities may have shared the same poles and underground conduits to bring their services to consumers and business and even have bought services from one another for over a century, it has only been in recent years that these two distinct industries have started to work with one another.

One trend that telcos are trying to cash in on is the emerging smart grid and smart meters concept. Wireline and wireless service providers not only want to provide the necessary connectivity to backhaul traffic from consumers home to the utility's central stations, but also provide energy management systems in partnership with the utility.

Still, utility companies, which are known for running systems with constant uptime, have always been keen on building their own telecom networks (fiber or microwave) to carry information and statistics about their energy infrastructure.  

That's not to say that utilities aren't at least willing to hear what the telcos have to offer. While there's still a majority of utilities that aren't comfortable working with an outside partner, the advent of secure IP-based network technologies could open up new opportunities for these two industries to collaborate.

This drive won't just be about technology alone, it will also be about developing relationships that take into account the utility's unique technology needs.

Take Verizon (NYSE: VZ). The telco worked with the Utilities Telecom Council to develop a study that to illustrate the factors that should be considered to design and deliver services that they say design and deliver services that they say "will facilitate the adoption of smart-grid technology."

Separate from the smart grid concept, Verizon was also able to win a managed services contract with National Grid (NYSE: NGG) where it will help multinational utility consolidate the myriad of IT systems it had to manage as a result of growing the company through acquisitions. While there was no indication of National Grid working with Verizon for smart grid, it's always possible the utility could turn to the telco to power its own smart grid movement.

Large utilities aren't the only ones driving the marriage of telecom and electric services, however.

A growing base of regional and municipally-owned utilities are multi-tasking their own telecom networks. Having already built out a Fiber to the Premises (FTTP) based network to service both residential and business customers directly or through a wholesale division, these pioneering utilities are multitasking their last mile networks to provide both traditional telecom services and manage their utility networks.

Some relevant cases in point include the Pulaski Electric System (PES) and electric distributor Concord Municipal Light--two regional utilities that are coming at smart grid from two distinct angles.

Initially built for residential services, PES is leveraging a hybrid FTTP/wireless network for its ongoing automated metering infrastructure (AMI) projects, including the eventual advent of time-of-use-pricing for its utility customers.

In a slightly different twist, Concord Muncipal Light, while not providing residential triple-play services over its GPON-based FTTP network yet, is using a similar hybrid wireless/wireline network to manage peak energy demand and help its customers monitor their own energy usage.

With these deployments already moving along, it's not hard to imagine that the bond between utilities and telcos will continue to grow.

Related articles:
2011 Predictions: Verizon continues to up FiOS speed ante
2011 Predictions: Cloud services continue to gain prominence
2011 Predictions: CLECs add wireless to business service diet
2011 Predictions: Service providers squeeze more out of copper

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