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How the Era of MACHINE-TO-MACHINE COMMUNICATIONS Is Changing Telecom [Rural Telecommunications](Rural Telecommunications Via Acquire Media NewsEdge) On a farm in central Kansas, a farmer monitors his farm from the comfort of his office. Hundreds of wireless sensors keep him apprised, via his computer, of the temperature and moisture levels in his fields. Responding to what the sensors tell him, he clicks his mouse to adjust an irrigation pivot point and redirect the flow of water. Because he no longer has to drive around fields checking on pivot points, he can save on fuel and labor - and deliver just the right amount of irrigation to every field at all times. Like many others, this farmer subscribes to an application called WagNet that is supplied by AgSensc, a Huron, S.D.-based company. Though the farmer may not realize it, AgSense relies on cellular connections from Nex-Tech Wireless, a mobile operator owned by three rural téleos, to transmit sensor from the fields to its online database. AgSense contracts with a number of mobile operators in different areas, paying a fixed amount for each connected device, and it resells their connectivity as part of the WagNet service. Nex-Tech Wireless, AgSense and the Kansas farmer are all on the forefront of a revolution that promises to profoundly affect both the telecom business and the role of the Internet in people's lives. The number of landlines peaked more than a decade ago, and the number of cellular lines is nearing its saturation point - the United States already has more cellphones than people. However, devices still remain to be connected to communications networks. Unlike the number of people, the number of devices is unlimited. A simple, low-cost sensor can be attached to almost anything that needs to be monitored, and it can be programmed to send information to its owner or to control machinery. The so-called "Internet of Things" - according to Techopedia, "a computing concept that describes a future where everyday physical objects will be connected to the Internet and will be able to identify themselves to other devices" - made up of machine-to-machine (M2M) connections already includes more than 2 billion devices worldwide, of which about 146 million are connected to cellular networks, according to a study by Machina Research. By 2022, Machina forecasts there will be 18 billion connected devices, 2.6 billion of them cellular, and annual revenues will rise from $200 million to $1.2 trillion. This rapid growth presents tremendous opportunities for telecom companies. However, there are still challenges for téleos in general and for rural téleos in particular in taking advantage of these opportunities. The UJopId of M2M In general, the "machines" in an M2M system consist of sensors in the field and a Web-enabled server that collects, processes and acts on data from the sensors. Sensors attached to moving objects (cars, tractors, cows) or fixed outdoor objects (silos, irrigation pivot points) usually communicate via cellular data networks or Wi-Fi; sensors attached to objects in and around houses (thermostats, door locks, lights) or business premises (gates, perimeter cameras) are more likely to use low-power wireless protocols such as Z-Wave or ZigBee and connect via on-premises gateways to the wired broadband network. Thus, both mobile and wired network operators have M2M opportunities. Serving unmanned devices is more complex than serving people. As Kurt Schaubach, chief technology officer of the National Rural Telecommunications Cooperative (NRTC), explained, "Devices don't have the ability to manage data consumption, and they don't have someone on the other end of the line to tell you there's a problem. They need tools and capabilities in place to do this more actively on behalf of the customer, who isn't as directly involved in managing devices." Telecom carriers must either put software and processes in place to handle those functions or else engage with third-party organizations such as AgSense that buy connectivity in bulk, resell it and manage the connections. Most such resellers, according to Schaubach, specialize in a particular vertical market, such as meter reading, home security or automobile telematics. However, although large providers have invested substantially into M2M capabilities over the last two years, rural téleos have encountered difficulties negotiating deals with third-party enablers. Aaron Gillespie, carrier relations supervisor for Nex-Tech Wireless, explained that, while most of these companies typically look for commitments of 10,000 to 20,000 customers before striking a deal, 'it would be tough for us to find a thousand customers." (Nex-Tech Wireless has about 500 subscribers signed up for AgSense, its most widely used M2M application.) Even when negotiating as part of a buying consortium - Nex-Tech Wireless is a member of the Associated Carrier Group - Gillespie said, "It's hard for us to get a foot in the door." In addition to farmers using AgSense, Nex-Tech customers include energy companies that use M2M applications to monitor wind turbines, check the status of oil wells and oil tanks, and monitor power-generation equipment. In these cases, the customers themselves initiated the necessary arrangements with application providers. "We stepped back and they did the heavy lifting," Gillespie said of the wind-farm operator. Schaubach thinks téleos could take the initiative to find platform partners and develop similar specialized applications for local enterprises. For example, he said, if the biggest business in town is petroleum, a telco could "go to a big petroleum interest, charge $30 per month per derrick, and get a couple of thousand connections - and that could be a pretty good business." NRTC is hoping to help téleos expand their M2M opportunities in this way, he said. Home-Rubomabion applications Rather than pursue specialized vertical applications, many rural téleos - both wired and wireless carriers - are looking at home monitoring and control as the entry point into M2M. These applications include energy controls, lighting controls, home security and video surveillance. (Many of these can be used for small-business premises as well.) Home-automation applications present several advantages: First, even small markets have many potential customers. Second, many téleos have historically offered security monitoring services, and home automation is seen as a natural follow-on. Finally, and most importantly, there are third-party enablers for these applications that are willing to deal with smaller téleos. One of these companies is Clear2there, an Oklahoma City-based company that began as a video surveillance provider, expanded into Internet-based video storage and recently developed a flexible M2M platform that easily accommodates a variety of sensor devices in addition to video cameras. Craig Steen, Clear2there's president and chief executive officer, said, "We're having a lot of success in the Upper Midwest, where retirees go south for the winter. Typically, when these snowbirds went to Florida, they would disconnect their broadband service or go on a vacation plan. Offering them a smartphone solution gives them the ability to know if there's water in their basement or the furnace has gone off ... |and is a reason to| keep year-round broadband connectivity." Badger Communications (Durand, Wis.), a distributor of telco equipment owned by a group of rural téleos, works with Clear2there in the Upper Midwest to help its member téleos enter the M2M business. Cliff Albertson, Badger's executive vice president and general manager, said more than a dozen Wisconsin and Minnesota téleos are actively investigating the Clear2there solution. Many are preparing to launch the services after receiving positive responses from demonstrating a pilot kit to potential customers. Jamie Goldsmith, marketing manager for RichlandGrant Telephone Cooperative (Blue River, Wis.) and La Valle Telephone Cooperative (La Valle, Wis.), said both those companies, with help from Badger Communicatons, are installing the Clear2there platform and preparing to market home-automation services. The companies' service areas are popular second-home locations for city dwellers, and even full-time residents include a number of what Goldsmith called "techic people with spendable income." Any of them, he said, would like to be able to turn on their thermostats and lights remotely, whether they're driving up to their front doors or 200 miles away in the city. Being able to let a delivery person into a house remotely, watch the delivery via an Internet camera and have the door lock when the person leaves is also a great convenience. Goldsmith is still developing marketing strategies for the service, both in and possibly beyond the cooperatives' service areas. He is trying to locate the "sweet spot" for pricing that will allow the cooperatives to recoup system costs without scaring potential customers away. However, he said, the revenue from seasonal customers' keeping their broadband connections year-round may be more important than the potential profits from the home-automation service itself. The Future of M2M The catalyst for cellular M2M, said Schaubach, will be the widespread adoption of LTE technology. Under the current release, LTE is too expensive for M2M communications; the new specification will have the capability to support M2M with chips that can be produced at very low cost; the cost per bit delivered over LTE networks also will be very low. "Until we can deliver M2M at a price point that has mass-market appeal, it's a specialized application," Schaubach said. For more on M2M applications, go to the "Online Exclusives" section of www.ruraltelecom.org Masha Zager is a freelance writer. She can be reached at mashazaga@ bridgewriter.com. (c) 2013 National Telephone Cooperative |