Public LTE: What is the True Cost of Going Wireless?

Public LTE: What is the True Cost of Going Wireless?

Across the country, telephone service providers are announcing their plans to suspend future support, and eventually retire legacy analog circuits. Over the past few decades, these circuits were used by utilities to connect critical assets with their core IT network. Many utilities are using this as an opportunity to upgrade their existing communications systems to IP or cloud based solutions. In most cases, major utilities are building out their own private networks to eliminate reliance on external service providers and reduce monthly recurring costs.

Building out a new private IT network is both expensive and challenging in different environments. The change from legacy leased circuits to IP-based digital solutions is necessary. But what happens when utilities cannot find viable solutions for remote substations where high speed data services may not be readily available? We have encountered this issue and developed solutions for different clients. Utilities usually identify and develop a fairly comprehensive suite of private technology options to choose from. Fiber is typically their first choice in terms of reliability, however, most utilities don’t have the funding to run fiber infrastructure to every remote location. Private wireless solutions are typically the less expensive, more flexible, and more rapidly deployed option for reaching these remote locations. However, private solutions may not always be the best option to reach all areas given the constraints of time, money, and resources. In some cases, continuing to lease communication services from service providers may be the best option to reach these more remote locations, especially when upgrades need to occur in a timely manner. If the decision is made to lease another connection from a service provider, it is important to consider the following when deciding what type of service to choose:

  • Installation lead times and time constraints
  • Cost of construction and ongoing recurring costs
  • Required future reliability of the network

Ease of installation and turn up time are always important factors when utilities deploy new technologies, especially if service providers start disconnecting these legacy lines without sufficient prior notification. Leased public wireless LTE (Long Term Evolution) connections can be established with a single radio. This allows utilities to create a design and establish a data connection in a minimal amount of time, making LTE a great temporary solution for any site requiring immediate attention. Dedicated wired MPLS circuits are another leased communication option for many utilities, however, it can take many months to construct and install them. MPLS circuits require the installation of expensive network interface equipment to hand-off the communications from the carrier to the utility. Depending on the service providers’ existing assets, these may require the installation of fiber to the location before a connection is established, which often takes months to complete. When it comes to ease of installation, there is no question, LTE is the obvious choice.

Utilities tend to have a low tolerance for additional ongoing operational charges, especially if they cannot be claimed as capital funding. Wireless carriers offer LTE services for a monthly fee plus additional data and usage charges. The recurring cost for a data connection can often be as low as $25 per month, and assuming a substation uses less than 10 GB per month, the additional data charge should be minimal. Alternatively, dedicated network MPLS connections can easily cost more than $1,000 per month for each circuit. In addition to the more expensive monthly charge for dedicated network circuits, the cost and responsibility for the construction often get passed along to the utility as well. When it comes to cost, again there is no question, LTE is the clear winner.

However, dedicated network connections have reliability and level of service advantages, making the decision to lease a public LTE service difficult for utilities. When talking about critical control traffic, there is a low tolerance for communication outages. Although both options are typically reliable, dedicated network connections are established with service level agreements which define requirements for availability, bandwidth, latency, and support. This is important because it is a guarantee for the level of service designers can plan for when deploying a network.

Service providers avoid publicizing important metrics and are hesitant to commit to SLAs for wireless LTE services because it is more difficult for them to offer the same guarantees as they can for dedicated network connections. Carriers rely on oversubscribing their wireless links to ensure they maximize the usage on their existing assets. Because wireless LTE links are not dedicated services like MPLS connections, a facility using an LTE connection will be competing directly with the public’s cell phone usage. This causes a lack of consistency within the network and creates technical challenges for running certain services, particularly time sensitive services, over a link. When it comes to public LTE, bandwidth is not guaranteed and may not be available when it is needed most.

Although, LTE is becoming more reliable across the country, the carriers are not able to commit to the same level of services as a dedicated network connection. Everyone has their own tolerances for outages and types of services needed. Reliability comes at a high price, but there are risks and challenges in using a solution that is relatively unproven for utility applications. When choosing what type of service to lease from your local provider, there are several tradeoffs to consider, making it a challenging and complicated decision. As utilities continue to modernize the grid, we need to be strategic in our technology choices to ensure current requirements are addressed while maintaining future reliability of the utilities’ critical assets.

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Email: marketing@westmonroepartners.com
222 W. Adams
Chicago, IL 60606
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