From Proprietary Mesh to Cellular Solutions: How the AMI Market is changing (English)

Tyler Kern (00:01): 

Welcome to Connected World. A podcast created for engineers to learn about the latest technology trends, creating a safer, sustainable, productive, and connected future. 

Hello and welcome to Connected World. A podcast brought to you by TE Connectivity. I'm your host, Tyler Kern. Thank you so much for joining us for this episode of the program. We're thrilled to have you along with us. Today we're discussing why the AMI market is moving from proprietary mesh to more cellular oriented solutions. And I have two subject matter experts joining me for this conversation as we dive in to this particular world. First, we have Gordon Barber, Global Director of IoT and RF Solutions for TE Connectivity. Gordon, welcome to the podcast. Thanks for joining me. 

Gordon Barber (00:45): 

Thanks for having me Tyler, much appreciated. 

Tyler Kern (00:47): 

Absolutely thrilled to have you on Gordon. And then also joining us here today is Nick Taluja. He's the executive vice president of sales and customer support for Sequans Communications. Nick, welcome to the show. Thanks for joining us. 

Nick Taluja (00:59): 

Thank you for having me here Tyler. 

Tyler Kern (01:00): 

Absolutely. Well, I'm thrilled to have both of you here on the show with us today as we dive into this topic. Just looking at why the AMI market is moving away from proprietary mesh. And so we introduced that topic there off the top, Gordon. Why did they go this direction in the first place? Why did they start off using a proprietary mesh network and what have been some of the challenges of using this particular network strategy? 

Gordon Barber (01:23): 

Good question Tyler to kick us off, right? When you look back into the history, frankly it wasn't feasible to have a kind of mobile network operator system at the time that AMI was gaining traction. The technologies weren't aligned. We didn't have the radios at the end device level that were attractive enough in costs. We were maybe even at 2G coming into 3G. The idea of IoT from a mobile network operator perspective, hadn't been well vetted and hadn't got off the ground. But however, mesh network thing, that's a fairly old technology. That system has been around for awhile. That kind of idea has been around for a while. It seemed reasonably straightforward to implement. 

I think when you think about the way these systems were carved out, as time has evolved some of the challenges that have come out of that really pointing out to the advantages of having a mobile network operator as your provider of these systems. They can go anywhere from, what is the cost associated with getting a system up and running if you do your own mesh network? What is the cost to maintain it over time? How do you expand in technology, if you're constantly having to manage your own network? Are you now manage your own technology evolution? All of these kinds of things in a sense go away. Because now if you follow the mobile network operator approach, those kinds of use cases or those kinds of issues, they get absorbed. There's a trade-off of course, right? You have to support the mobile network operator in terms of their needs. But on your side as a user or a developer of meters or whatever the situation is, this particular advantage is by leveraging that. 

Tyler Kern (03:17): 

And Nick, I wonder if we can follow up with you and get your thoughts on that as well? 

Nick Taluja (03:22): 

For me it comes down as rightfully so Gordon pointed out, it comes down to economics, right? That's what it is. Let's take a step back and understand why we're going down the path of these digital meters, if you will. So this thing really started in the early to mid 2000s where people said, "Look, let's stop sending workers out to read meters. It would be great if we could just digitize those and be able to get the automated meter reading." But more than that, what has happened is people have learned that it's also... you can do things like remote disconnect. You can do things like load curtailment. You can talk about energy management. And there's a slew of additional services and things that can be offered by the digitalization of AMI. 

Gordon a 100% right. When the digitalization of this began we were talking about 2G, 3G networks. And I'll put some numbers behind this, just so you understand. From a hardware module standpoint, if you will. A 2G, 3G module back in the 2000s, when this digitalization started occurring were costing somewhere in the range of $75 to a $100. Imagine putting that into a meter, just to be able to read it remotely when the meter itself costs less than $200, if you will. The cost was completely prohibitive just from the hardware standpoint. The second point of it, which Gordon also kind of alluded to, was the fact that the operator data plans were just not there. They were just too damn expensive at that point in time. And so you can say all this was really in the infancy stages, if you will. 

And so obviously these companies where compelled really do choose a cheaper alternative. Which really was the proprietary mesh. So while doing this, they created their own networks, if you will. So you'd have multiple meters connected to each other, talking to each other. And then when they needed to get out to the cloud, they'd have a gateway installed. And so multiple meters would aggregate into a single gateway, which would have a cellular connection to send the data up to the cloud. So basically what you did, you took the cost of physical labor out. But then you started putting the cost of the network in. So all the utilities and the AMI companies had to go out and maintain these networks. And that became very cumbersome. 

So the challenge really is when you have a network that already exists, you can use that very easily than having to maintain your own network. So I would say the biggest challenge has been the network maintenance aspect. Especially since a lot of advancements has now been made in the field of cellular communications that basically makes the proprietary mesh obsolete. So the problems of the past are no longer the problems of the present. 

Tyler Kern (06:25): 

That's a really interesting perspective that you provide there. Specifically on the economics there they're Nick. And I wonder then from a technology perspective, what advantages are now provided by moving from mesh to cellular networks like you were mentioning. Not having to maintain your own network is certainly one, but technology has certainly evolved in that time, right? Which provides certain advantages to moving towards the cellular networks. 

Nick Taluja (06:49): 

Indeed. As I alluded to earlier, right? Over the 15 plus years or 20 plus years that we've seen this technology. Solar technology has mature very, very significantly. In 3GPP by the way is the body that is actually defining the standardization of cellular, if you will. There is today a lot of emphasis that is placed on the internet of things. If you go back 20 years, there was no emphasis on internet of things. It was basically the internet of people, how to connect to people. Today a lot more emphasis is being placed on actually being able to connect things. And with that comes a lot of benefits that you're seeing. So again, comes back to economics as we said. Cellular modules that used to be $75 10 years ago, today those modules if you will, you can get about a 10th of the price. Basically $7.50 cents. 

In 2G, 3G networks. We did not have the concept of a meter coming on once a day to give you a data readout. Basically, if you put a cellular module or cellular modem in the meter, it was coming on every 1.28 seconds. And if you have a meter that's connected with a battery for example, that meter's going to die really fast. Or are you going to have to put a very, very large battery on it. So the concept of what we call eDRX or Extended DRX and PSM Power Save Mode in cellular, has specifically been implemented for IoT devices specifically to reduce the power consumption. So devices in the past, for example, 2G, 3G networks that dissipated about a 100 micro amps of power in standby mode, today I can tell you some the devices we're shipping actually dissipate one micro amp of power in power save mode. 

And this is very beneficial to gas and water meters, where they actually do run on batteries. And technology itself the operators also have done their part. For example, in parts of Europe just recently, I was reading there's a European operator that is talking about a 10 year data plan for $10. That's basically a dollar a year in terms of data plans for some of these IoT devices. So that means the cost that you had of maintaining your own infrastructure based on all these things of lower power, lower costs and lower data plans is no longer economically feasible. So in summary, the advantage of moving from mesh to cellar really boils down to the total lower cost of ownership. And the ability, I would say, to scale the technology to take advantage of the techniques developed specifically for IoT applications like AMI. 

Gordon Barber (09:52): 

Nick, really summarize that well. And the only point really to emphasize is that when you look back, I think at this meshing technology wasn't necessarily meant to service the needs that we have here. As an example, in the meshing side, you need a fairly robust network. A fairly large physical size, number of nodes to make that attractive before you deploy that. And here, now we're talking about battery life of 10 years on a device. Low cost of ownership like Nick noted in terms of what does it cost for you to send this data? And it really doesn't matter the network size as long as you have access to the network now. So it's just that what we're talking about is moving from a system that was adopted to handle this need, to now a system that's really designed specifically for these needs. 

Tyler Kern (10:50): 

That's interesting. So it does sound we're pretty positive towards cellular networks at this point. But Gordon I do wonder, are there still challenges presented by cellular networks that need to be overcome or kind of worked with? 

Gordon Barber (11:04): 

Yeah, absolutely. There's a couple of challenges. From first again, Nick touched on it or we alluded to. There's a cost of ownership. There's a cost of the data. And if you don't have to pay for the data, if you can leverage a mesh network and you could deploy a mesh network in a way that you are... what's acceptable to you, then hey you don't have to pay to access the data all the time. So the plans coming down $10 for 10 years, as an example, that's extremely attractive. 

Then maybe a little bit on the technical side. Of course, I think we're all familiar with this kind of fading environment, where you may or may not have a signal in your... with your mobile handset. Think about way some of these meters are deployed. Whether they're outside or whether they're water meters or whether they're indoors, in your basement. There's connectivity, connections there as well. So there can be times certainly, I can think that there certainly would be examples of, "Hey, you may or may not get a connection here." And you have to be able to deal with that one way or the other. A potential way to deal with that is to have a mesh system. 

Nick Taluja (12:12): 

I would compliment that Tyler by saying that obviously the coverage aspect that Gordon heads on is definitely... it's improving, right? If you look at what the operators have done, they've done a phenomenal job in getting cellular coverage to even the remote parts of the world. I can tell you personally, I was in a town very close to the north end of Idaho, and we were doing some testing and I can tell you we could find coverage in a farm up in Idaho. So the coverage has become very, very good in terms of where it is, but there will always be areas where you will have these problems. So just like Gordon suggested, we believe there is at least a little while where mesh and cellular will need to continue to coexist in order to have that hop to go into the cellular end. But more than proprietary mesh, I think I would like to say that there is an area of open mesh that is coming on. We have technologies like WI-SUN as an example, which are coming on board. Which can offer a very good alternative to proprietary mesh. 

So the coverage is one aspect that Gordon talked about. I'll talk about a second aspect on my side, which I think is also a challenge and Gordon hinted it. But some of these metering companies are talking about 10, 15, 20 year lifetimes and what they expect and what they demand is the products in turn also offer the similar amount of lifetimes. They're demanding from us that products can live in the field for 15, 20 years. That there's enough reliability work done to guarantee and assure them of that. But also they're looking to the operators, asking the same questions, "Can you give me coverage on LTE or on 2G, 3G for the next 10, 15, 20 years?" So there's a lot of discussions ongoing between the utilities and the operators. And I can't tell you where those discussions are today, because I honestly don't know. But what I hear is the discussions are moving in a very positive direction and that operators are willing to step in and support the utilities in providing these so-called service assurances over time. 

Tyler Kern (14:33): 

That's really interesting. And so I want to hear more about how each of your companies are making all of this possible. And so Nick, from your perspective at Sequans, how are companies like TE and sequence hoping this transition move forward from mesh to cellular? 

Nick Taluja (14:48): 

I can summarize this into two broad categories, okay. So let me start by saying these two are capability experience, which I'll call really a category and then the solution. So let's start with capability and experience as the first step. So Sequans is a company that is not just developing the modules, but we're actually developing the underlying chips that go with it. We're doing the complete solution from a module and chip set perspective. And if there's one word I can use that sets us apart in terms of all this is our ability to customize the solution for the EMI market. We know most cellular modems, modules, everything are designed for applications that sell in multi-multi multimillions of units. And even some that sell in billions of units. And so everybody's focusing on those areas, which means they starved the other areas. 

So we can actually step in and customize our... Because of our a 100% ownership of the entire solution from a module, LTE module perspective, we can actually customize that. We've been shipping for more than five years into the AMI market. We have significant amount of experience. We've actually shipped more than 3 million plus cellular IoT chips into the AMI market. And actually we've learned a lot. And some of these learnings have been incorporated into the products that we're offering today. The second part, which I talked about was the solution aspect. So we know as a company that we cannot do it all. We know that. So having partnerships and working with companies to deliver a complete solution for the metering environment is critical in helping make this transition faster, easier, better for these companies. 

So I'll give you a few examples. So for example, recently we partnered with Renaissance, as an example. Renaissance is a company that's actually selling WI-SUN solutions already into the AMI market, which is the open mesh technology I alluded to earlier. So we partnered with them and we're working with them to create a solution around that, such that companies can adopt that solution and go to market faster. Then obviously meters are put in basements, they're buried. Sometimes buried underground, which means the signal really needs to get up. So what's very important there is the antenna design. So this leads into probably Gordon and what he's going to talk about later. But really partnering with antenna companies like TE becomes very, very critical such that the module and the antenna are working hand in hand, and really being able to get that signal to the customer that is required. 

The third example in partnership really is the work we've been doing with Skyworks. Gas meters, because gas is odorless as an example, they actually induced sulfur in the gas. So you can smell it. Which is very important because gas is very flammable, if you will. And sulfur react at firstly with silver and silver is found in all semiconductor chips and modules. The shield on the module is actually made of silver. So we worked with Skyworks to create a module that is silver free. And what that does is we talked about that 15, 20 year lifetime, that companies were demanding from us. The problem is if you have put that in a gas meter, the sulfur is going to react and corrode the silver on the module. So we actually created a silver free compound with Skyworks that actually we've been able to take to the market for gas and water meters. 

And by the way, I can keep going on. But the same stuff also applies on the software side. So we've actually designed into our chips, things like cloud connectors, right? So it connects directly to AWS, to Azure, to Google Cloud, or do any proprietary cloud so that the customer's work is simplified. We're also at this point doing something very... We're defining a very... What do I call it? A well defined interface between the meters [inaudible 00:19:12] and the modules that actually enable easy evolution of the module, without having to update the meters firmware, if you will. So all this stuff that we're doing together and the innovations and the partnerships are helping the EMI companies with their transition. 

Tyler Kern (19:27): 

And Gordon, you heard, Nick kind of almost tee you up a little bit to talk a little [inaudible 00:19:34]. I was wondering if you could take it away and share your expertise and your thoughts on that. 

Gordon Barber (19:37): 

Yeah, absolutely. I think I can talk from similar perspectives as well Tyler, right? So there's the partnership level. And so to reinforce what Nick was suggesting, the partnership between a Sequans and a TE from the antenna perspective is very important. Because what happens is when we integrate an RF Solution into a product, the area that the product is placed and the product itself significantly impacts the potential performance. We can take an antenna as an example, and radio combination that we put an environment which we might call as free space or open area. And it works perfectly. We take that same solution and integrate it into a meter, which has plastic, metal components, attaches to a side of a house or in a basement or in a water well in some cases. And RF doesn't perform at all. Either the environment constraints it, meaning the outside of the meter or the meter itself degrades the antenna performance so significantly that essentially doesn't work. 

So it's very important for the metering companies to partner with a group of players like Sequans and TE. That is going to facilitate the insight into the solution to prove that it's performing the way that you want. Now what's going to happen is in reality, a Sequans and a TE they may be working together for a customer. The customer may turn to us and say, "We want the radio to be placed here. We want the antennas to be placed here. Our industrial design looks like this." We may take that design in. We may start to integrate the antennas and adjust our platform solutions, or create a full-blown custom antenna to meet the need. Now we can measure from a typical kind of antenna performance perspective. But TE as a supplier, can additionally take the entire assembly and test it from a more complex, active RF approach. 

And we would measure what we call total radiated power or total isotropic sensitivity. Which would be a transmit test and a receive test. Basically, this is an active test that tells us how does this solution perform on the mobile network operators network? And there'll be certain metrics that will tell you whether you've met a threshold or not. That will give you an indication what quality of service should I expect out of this solution? What challenges might I have if I integrate this into say either outdoors or in a basement? Am I near the signal to noise ratio cutoff? Do I have 20 dB of room? And when I put this in a basement, I'm not going to have an impact. 

So when you partner, you can not only understand, "Hey, what is the antenna going to perform like?" Or, "What is the radio going to perform like?' You'll understand what is the whole RF chain. What implications does my industrial design have on the solution? Do I have to change? Does the supplier have the room or physical volume to place the solution in it? Or do we need to make changes? There're a lot of things that happen here and when companies partner with us, we can shed that insight quickly. And get to the root of any problems quickly instead of later, which can of course be painful. 

Tyler Kern (23:15): 

Absolutely. That makes a lot of sense. And so I guess my question then becomes, how far into this transition are we then guys? If this is the direction that things are moving in, where are we right now when it comes to making that transition from that proprietary mesh network over to a cellular strategy? So Gordon, just where are we in terms of what the numbers are telling you? 

Nick Taluja (23:43): 

As I said, we spent a lot of time in this market and we understand it inside out. To summarize, I think we're just scratching the surface at this point in time. So if you look at some of the data... And I'm going to talk about metrics a little bit. If you look at some of the data that's provided by companies like ABI, as an example. In 2017 alone, there were approximately 15 million, 16 million cellular connected meters. And off that roughly a third were connected on 4G. Two thirds were still connected on 2G, 3G technologies. Which by the way are sunsetting. So 2G is already dead in the United States as an example. It still exists in many other parts of the world, but 3G is going to be completely dead next year in the United States. 

So everything has to transition over to 4G. But if you look a third of 15 million meters were connected on 4G. Now, the worldwide metering market, we hear all kinds of numbers all over the map. So I'm not going to try to put an estimate on that, but I will give you an estimate of the size of the U.S metering market. So the U.S metering market, and we know this extremely well is alone about 94 million meters. So when I talk about 15 million connected meters, I was talking about the worldwide market. When I'm talking about 94 million, I'm talking about just the U.S total metering market, if you will, that is not cellular connected. And we believe all this is going to actually transition over to cellular connection over the next five, 10, 15 years. 

If you again, go back to ABI and look at what they're expecting. They expect that by 2024, there will be approximately 55, 60 million cellular connected meters worldwide. And about 97% of those will be connected on 4G. So that means most of them will be connected on 4G, LTE, the technology we're talking about. And we believe that this number could very well exceed 200 million cellular connected meters per year, being deployed by the year 2030. A very substantial market, if you will, in terms of growth. And we've just started scratching the surface of what this would be like for cellular connected meters. 

Tyler Kern (26:10): 

That's really interesting. And as you mentioned, just the number of people and the number of modules and all of the various statistics surrounding this particular topic. It does make me wonder aren't there areas where cellular isn't quite available at this point. And if so, are there solutions available in those particular cases that will work better for that particular aspect of the population? Nick, this might be another question that I touched your way. At least just to get us started. 

Nick Taluja (26:38): 

Yeah sure. Again, I come back to, while the operators have done a phenomenal job in their network deployments, there will be spots that'll take a bit more time to cover, right? And by the way, the cost of deploying this infrastructure, you've seen in some of the things you hear all the spectrum that has being bought for billions and billions of dollars. You can understand the cost of actually first buying the spectrum and then deploying it. But overall, I would tell you in most of the world today, there is very, very good coverage in terms of cellular deployment. But there will be those cases where we believe that customers will continue to need point-to-point and ad hoc networks that can help in the cases of where you're at the very edge of the cellular network. 

So a meter, which is basically just outside the coverage, or just outside the coverage of the cell would connect to another meter via this point-to-point mesh. We talked about WI-SUN earlier, so that's an example of a point to point mesh system. And that meter then would be able to relay the signal out because it is within the cell of the network. So while we expect these cases to be rarer and rarer over time Tyler, what we're seeing is mesh is not going to be obsoleted overnight. We have customers looking at LTE plus mesh based solutions today, and that's predominantly to take care of issues like this. And then over time we expect that the mesh part of it will continue to go down and eventually, hopefully be eliminated at a certain point in time. 

Gordon Barber (28:39): 

I think Nick's point about the mesh, the way the mesh network in the future could get set up is an important point to take, right? It's not the same mesh network the way we think about it now, in a sense where we have this collector. We have to manage a collector station or kind of base station in a sense, or a gateway. I think the way Nick noted it before. Even from the perspective of how is the technology working. Even these mesh networks of the future that would have this integrated mobile network operator functionality and connectivity as well, they're simpler, right? And they offset and they can help facilitate even mobile network operator solutions themselves by making sure there's a fallback. So it's very attractive solution Nick was describing in the interim, until we have this network coverage that is full-proof from every angle everywhere. 

Tyler Kern (29:37): 

Well guys, we've covered a lot of ground here today, and I know that there's probably much more that we could discuss here on the podcast. But as we begin to wrap up this episode and tie a bow onto the end of it, I was wondering if we could get to some conclusions, some closing thoughts from each of you? Just on this topic of the migration from a proprietary mesh network over to cellular networks. So Gordon, let me kick it over to you first. Just for any closing thoughts you have, any summary statements or anything we haven't discussed yet here on the podcast you want to make sure that we mentioned before we wrap up. 

Gordon Barber (30:07): 

Yeah thanks. I think just in summary that when you look at companies like Sequans and TE you need experts in the field to bring this technology to life for you. Please depend on us and come to us with your problems and your needs, your pain points, and we're happy to step in and solve those for you. That's what we're here for. 

Tyler Kern (30:26): 

And Nick. Yeah, any closing thoughts? Any final things you want to leave our listeners here with? 

Nick Taluja (30:32): 

When thinking of the transition to cellular there are lots and lots of considerations that we discussed, right? There's power, there's costs, there's antenna, there's design that's... By the way, there's things like operator certifications, firmware updates, harsh environments. I can go on there. There's a list that can really confuse the hell out of any customer. So the main thing I would say is choose the right partner. Partners like TE and Sequans who actually understand the environment, have the experience and actually focused in the IoT industry. Because that is the only way to ensure long-term success. 

Tyler Kern (31:08): 

Very, very excellent stuff. Gordon Barber, and Nick Taluja. Guys, thank you so much for joining the podcast today and sharing your expertise and your thoughts with us here. Just on this particular topic. I know that there are so many layers to it and a lot more things we could have a dove into, but I appreciate your time today and I appreciate you sharing your expertise with us. 

Nick Taluja (31:27): 

Thanks Tyler. 

Gordon Barber (31:27): 

Yeah thank you Tyler. 

Tyler Kern (31:28): 

Absolutely. And everyone, thank you for tuning into this episode of Connected World a podcast brought to you by the experts at TE Connectivity. We appreciate you joining us here today very, very much. Of course, make sure you go subscribe to the podcast on Apple Podcast or Spotify to stay up to date with the latest from TE Connectivity. You can find more podcasts just like this one there on that particular channel. If you subscribe, you'll get the latest episodes right there on whatever podcast platform you prefer. And stay tuned, we'll be back soon with more podcast episodes coming at you shortly. But for this one today from my guests, Gordon and Nick, I've been your host today Tyler Kern. Thanks so much for listening.