Swedish telecom giant Ericsson was fairly active in the smart grid communications market a number of years ago; in particular, the company was involved in a number of WiMAX- and LTE-based smart meter deployments in Australia. More recently, Ericsson has been notably absent from the space, especially in North America. It looks like that hiatus may be ending.
On October 1, Ericsson closed on its buy of Newton, Massachusetts-based Ambient Corp. for $7.5 million. Ambient will be integrated into Ericsson’s Global Services division.
Ericsson has reportedly also hired a former DNV EMA utility expert and acquired a grid management company in recent months; competitors say they are starting to see more of Ericsson in the North American market. The company is a major supplier of LTE infrastructure to the wireless industry; it appears likely that the Ambient buy will support additional efforts to promote the use of the 4G wireless technology for smart grid networks.
Ambient made a splash in the smart grid comms arena a few years back when it was awarded a product award at the Utilities Telecom Council (UTC) 2011 Telecom Forum. The UTC Product Awards is an annual competition highlighting the best in critical infrastructure industry technology.
Ambient’s smart grid communications solution combines multiple communications technologies – including RF mesh, cellular, power line communications (PLC), and Wi-Fi – into a single node, providing flexibility to utilities needing a variety of solutions due to topology or coverage issues. In 2013, Ambient announced its nodes had been certified for the Verizon LTE network, and by the middle of that year Duke Energy had deployed nearly 200,000 of those nodes. In mid-2013, Ambient also announced a contract with Con Ed for commercial and industrial (C&I) metering.
Ambient proved unable, however, to leverage the early hype around its solution and its Duke relationship for sales growth. The company, which was publicly traded prior to its July bankruptcy filing, reported less than $600,000 in revenue in the March 2014 quarter, down from nearly $5 million in the prior year period. The company lost nearly $18 million in 2013 on sales of $11 million.
Ericsson’s interest in promoting LTE’s place in the smart grid communications market isn’t surprising. While LTE is generally considered an expensive solution for smart grid applications, utilities are increasingly worried about the longevity and flexibility of their communications networks – and LTE provides low latency, security, and signal prioritization features that should ensure its ability to handle just about any smart grid application that’s deployed in the next 20 years.
Both AT&T Wireless and Verizon Wireless are aggressively courting the utility vertical with their cellular solutions, including LTE, and one meter vendor representative recently told me that it sees LTE as the future of smart grid communications. If that’s the case, it seems Ericsson will be joining the competitive fray. And with the backing of Ericsson, Ambient could be able to get some much needed traction in the marketplace as well.
Tags: Mergers & Acquisitions, Smart Grid Telecommunications, Smart Utilities Program
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