Alcatel-Lucent’s involvement in LTE demo is good sign

Some interesting news came out of Texas last week. A newly formed company called Texas Energy Network (TEN) announced that it will be the first communications company to build a nationwide wireless broadband network based on LTE that is dedicated to, and designed for, critical infrastructure companies. It's targeting the oil and gas industry initially.

TEN is holding a demonstration in New Mexico in conjunction with Alcatel-Lucent, with the vendor providing all the wireless technology for the end-to-end LTE network using its LTE on Wheels truck. The demo will show a live LTE network with working data devices, such as laptops, with 1 Mbps data uplink speeds. Using this technology, the network could be connected directly to a pipeline’s sensor system or linked to a monitoring camera that sends back live video images, the company said.

Of course, there are some unanswered questions, such as where the company will get spectrum. It won't say just yet. And then there is the question of whether LTE can be cheap enough to provide cost-effective services to the critical infrastructure industry.

Nevertheless, Alcatel-Lucent’s involvement in this initiative is interesting because companies usually look to bring new technology to specialized markets much later, when the technology is mature. However, a recent report from Current Analysis analyst Daryl Schoolar, indicated that Alcatel-Lucent already is heavily targeting vertical markets for its LTE offering. (Its other vertical market play so far is in public-safety applications, as it is working with EADS Defense & Security.)

"Deployments with mobile operators still represent a better LTE volume opportunity than industry verticals," Schoolar wrote. "However, that is not to discount the fact that industry applications do represent a revenue growth opportunity. Plus, the vendor’s experience with deploying networks for vertical applications raises Alcatel-Lucent's overall industry profile and makes the vendor an attractive partner for mobile operators looking to build their own industry-specific solutions. The next step for Alcatel-Lucent is to turn demonstrations with TEN and EADS into actual deployments."

Other vendors and operators have indicated that vertical markets are the key to the next generation of growth, which may be good news for both the public-safety and industrial sectors. However, the big question that still needs to be answered is, how quickly can this ramp up given that LTE still is in a relatively nascent stage?

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