The energy industry should consider the LTE family of cellular technologies, including NB-IoT, LTE-M, and 4G and 5G, to spur their longer-term Industry 4.0 ambitions, according to analyst house Guidehouse Insights. The energy market must start experimenting with cellular right away, it says, with or without participation from carriers, and make bets on private spectrum “for the most secure, long-term approach”.
LTE-based technologies have a key role to play, suggests Guidehouse Insights, for utilities, oil and gas companies, and mining operations to stay sharp, and make gains in terms of efficiency, productivity, and safety. The sector has a tangled history with communications technologies, it argues, where they have been commissioned a mish-mash of networking types for siloed spot work and not as part of a thought-out and comprehensive digital-change strategy.
The firm has just released a report, under the banner, Wireless networking and energy: LTE standards set stage for the 5G era. It notes that LTE is a direct forebear of industrial-grade 5G, when ultra-reliable, low-latency, massive-scale enterprise networking gets serious. LTE is available now, and the energy sector should urgently embark upon the donkey work to devise their Industry 4.0 strategy and design their Industry 4.0 architecture.
Richelle Elberg, principal research analyst with Guidehouse Insights, said: “Most [of these] companies have taken a scattershot approach, building ad hoc, application-centric networks to perform just a few tasks. They may be operating dozens of incompatible networks per site, with a mix of wired and wireless, public and private solutions performing disparate functions.”
He adds: “Looking ahead, a strategic, holistic, long-term plan should be created for full-territory and sitewide connectivity.”
Recent analyst reports – notably twin reports from ABI Research – suggest decisive momentum behind cellular-based IoT technologies, most specifically NB-IoT and LTE-M. More than 80 percent of original equipment manufacturers in the asset tracking space are releasing products for cellular low-power wide-area (LPWA) network connectivity, with high growth in LTE-M trackers as mobile operators rollout LTE-M networks. Shipments of asset trackers will increase by more than 50 percent annually through 2024, driven by growth in LPWA networks and smaller, smarter, cheaper IoT devices.
In tandem, Frost & Sullivan has said 90 percent of industrial enterprises will use edge computing by 2022, as cloud workloads shift closer to the ‘coal face’ of industry in pursuit of lower latency and higher security. This spiralling interest in close-range industrial analytics functions will drive the value of multi-access edge computing (MEC) upwards at a rate of 157 percent per year. Telecoms operators are well positioned to capitalise, but must pull their socks up, it noted.
Indeed, industrial workplaces represent a new battleground for mobile operators, particularly around the broader role of 5G. Germany, in arguably the most decisive regulatory shift for the global telecoms industry in an age, has issued 67 local spectrum licences for private LTE and 5G to enterprises since November 2019. Applicants in Germany, the home of Industrie 4.0, are testing the water still, but the flood is expected to come, and the operator set has a job to convince industrial companies to piggyback on its spectrum and services.
Dean Bubley, founder of Disruptive Analysis, describes the conundrum well. “Mobile operators can’t do proper 5G slicing yet, at industrial scale, as they have also had to wait for Release 16,” he says. “But what capacity do they really have for custom builds? Can an operator do 10, 50, 100 projects a year, if each one is ‘special’? What happens if 1,000 companies want one? ‘Take a ticket and take a seat’. Expected wait time: 15 years.”
Guidehouse Insights, promoting its own research, appears to suggest the carrier community affords a useful entry-point for utilities, oil and gas majors, and mining companies to get a grip on the challenge and opportunity from industrial cellular, before they shore up their intent with their own network operations – and possibly their own spectrum, as regulators increasingly liberate airtime usage for enterprise sectors.
A press statement reads: “Utilities [should] partner with public carriers for infrastructure sharing, reduced costs, and revenue opportunities. They should trial LTE-based network applications with a carrier or in a pilot using shared spectrum, and then consider investment in private spectrum for the most secure, long-term approach. The report also recommends coordination among smaller entities to bring market influence and tailored offerings from carriers and infrastructure vendors.”
The report, available here, covers the options energy and utility vertical participants have for spectrum needs, and includes a list of industrial IoT use cases enabled by LTE protocols. Elberg remarked: “A strategic, holistic, long-term plan should be created for full-territory and sitewide connectivity. A strategy built around the family of LTE technologies, based on global 3GPP standards, presents an efficacious solution poised to evolve as 5G technology matures.”
