Easy money: Wireless operators take another look at telemetry

A recent Yankee Group report predicts that telemetry revenues will reach $6.6 billion by 2004. That number piques the interest of wireless operators - especially because telemetry literally earns operators money while they sleep.

"It lets them use idle capacity on their networks," said Stephan Beckert, senior consultant for The Strategis Group. Some applications, such as meter reading, can be performed during off hours, when voice networks are largely unused.

Wireless operators are showing their interest in telemetry in many ways - chasing them via the direct approach is one of them, and potentially the most difficult. Nonetheless, Omnipoint Communications is trying this approach. The company soon will begin to pursue the telemetry business now that it has gained experience from working with KeySpan Energy, an electric utility company in Long Island, N.Y.

"Working with them has been enlightening," said Chris Resavy, senior director of engineering operations for Omnipoint.

KeySpan monitors its high-usage commercial customers to identify trends and allows customers to monitor supply lines via GSM's short messaging service capability. Currently, Omnipoint trades a set number of messages per day for KeySpan sites that house Omnipoint base stations. But in the future, especially as Omnipoint implements general packet radio service (GPRS) and can respond to some of KeySpan's higher data needs, the companies may negotiate a new arrangement.

Omnipoint's sister company, Omnipoint Technologies Inc., makes the modules that read the commercial meters. OTI hopes to take away some of the operator's struggles in winning telemetry customers by working with all the companies needed to build a telemetry application. "It's like herding chickens to get them all together," said Mark Vonarx, senior director of marketing and sales for OTI.

The company will work with operators instead of end users, equipment providers and application developers to design services. The challenge of developing whole services may be the reason some operators that are interested in telemetry opt to partner with companies such as Aeris Communications. Aeris uses the control channels of cellular networks to deliver telemetry services. The option is attractive to operators because Aeris negotiates a revenue-sharing deal with its partners and has its own sales force, said Mike Crane, director of product management for Aeris.

"It doesn't involve costs to deploy, so it's an easy decision to make," Beckert said. The cost to provide service also is low because a customer could have thousands of active units that fall under one bill.

Some of Aeris' partners, such as Bell Atlantic Mobile, use their own sales forces to score business as well. BAM's data salespeople, who handle the operator's cellular digital packet data services, offer Aeris' telemetry service to customers with low data needs, Crane said.

As interest in telemetry grows, operators are becoming less concerned that the service might steal capacity from their valuable voice customers. Aeris has found that most telemetry applications mainly use the reverse channel, which is used less by operators than the forward channel, Crane said. Telemetry also uses short transmissions that don't eat up much network time. Omnipoint doesn't anticipate its small data applications encroaching on voice traffic, either.

Other types of operators hope to capitalize on the potential telemetry market by building their own networks. CellNet Data Systems owns licenses in the 950 MHz spectrum and is building out its network. Today, CellNet serves customers that use the network for applications such as meter reading, copy machine monitoring and home security.

"We're in the ultra low-cost data communications segment of the market," said Bill Vogel, vice president of marketing for CellNet. Its network efficiently uses frequency and operates over inexpensive endpoints, he said.