Want Six Billion Dollars To Invest In Your AMI Network?


By Henry L. Jones II

But it’s not so simple for the utilities themselves, each of which is required to deliver a Return on Resources that is calculated by a complex combination of regulations, infrastructure constraints, and the desires of diverse constituents. The business case for the build-out of a service area-wide network to support AMI is quickly becoming an expensive proposition, and it seems to be taking forever to build a consensus.

Cellular network providers are investing billions of dollars in their AMI networks. AT&T Wireless (formerly Cingular) alone will be spending $6 billion this year, following $7 billion spent in 2006. Those investments were spent efficiently in a highly competitive environment to deliver high speed connectivity anywhere that people live and work. Of course, the primary intent of these funds is to support mobile users and other consumer users with web browsing and email. Communicating with meters is a much simpler proposition – and one can rely on these consumer applications to provide real-world evidence that scalability to system-wide AMI will not be a problem.

What does all this investment mean to a utility? No one is suggesting that the entire $6 billion will be spent in one utility’s service area. But it does mean that millions of dollars have already been spent in the service area of almost every utility, targeted at the places where most people spend their time – at the office and at home – creating an AMI network ready for immediate AMI applications.

More important is where that money is going next. These billions of dollars and billions more worldwide, are spent in another highly competitive market – telecommunications equipment. Those vendors spend their revenue seeking technological improvements, cost reductions, and manufacturing reliability.


Meanwhile, consumers continue to adopt cellular technology at a rapid pace: GSM, with 82 percent of the global handset market, is the fastest growing communications technology ever. The billionth GSM user was connected in Q1 2004 – just a dozen years after the commercial launch of the first GSM networks. The second billionth GSM user was connected in Q2 2006 – just two and a half years after the first billion. The total number of cellular users worldwide is currently 2.8 billion, with another billion on the way in the next two years. To address the needs of these consumers, many billions of dollars (in addition to the billions spent on network equipment) are spent each year in the highly competitive handset market to deliver greater functionality at a lower cost to each individual.

Thus, those investments by the network providers are seeding a multibillion dollar ecosystem that is also pushing down the cost of every utility’s existing AMI network and pushing up its performance. What sort of comparable pressures are pushing for improvement in other AMI communications technologies? As shown in Table 1, the difference is quickly apparent.

Utilities can certainly choose AMI communications technologies other than cellular based on similarities in 2007 performance and cost, but which technology makes the most sense as each of these technologies progresses? In 2010, after another $100 billion has been invested in the development of cellular technology, how will a utility decision to spend millions in ratepayer money on a redundant network appear to the public?

The challenge of an ageing workforce at many utilities will put further pressure on the need for the highest Return on Resources and is an additional reason to pursue an AMI initiative. Younger workers, who will replace these retiring employees, have grown up on text messaging and cellular connectivity and they will be ready to support, utilise and innovate around the concept of cellular connectivity for AMI.

SmartSynch is the unchallenged leader in providing cellular connectivity to utilities for their AMI infrastructure. Partnering with Motorola, a global wireless technology leader, ensures maximum functionality and long term reliability. Motorola provides SmartSynch with robust M2M (machine-tomachine) wireless modules, incorporating the most advanced technologies. Clearly, cellular technology will provide the AMI solutions of the future.