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Verizon Says New Network Just for Internet-Connected Devices Will Dramatically Cut Costs

The company on Wednesday said it is testing a new network core, due to launch next year, that will pave the way for Internet-connected gadgets without a monthly fee.

Hahn Family Wines

There’s lots of buzz around the Internet of Things, but do all those smart meters and Net-connected refrigerators really need their own cellular network?

Well, actually, yes, at least according to Verizon. The company on Wednesday announced it is building an entirely new 4G LTE network core specifically designed for small devices that need occasional bits of data, but not enough to justify the cost of a traditional cellular connection.

The problem with just connecting them to today’s cellular core networks is that they aren’t cost effective for very infrequent connections. That’s why today, almost all cellular-connected devices cost at least several dollars per month, regardless of carrier. Essentially, each device connected to the cell network is treated like another phone or tablet, even given the equivalent of a phone number (or, in some cases, an actual phone number).

On Wednesday, Verizon announced a broad set of new efforts under the ThingSpace banner, including plans for this new network core. In an interview, Verizon Senior VP Michael Lanman said that the company is currently testing the new network approach in its labs, but plans to have it up and running for public use by the end of March.

The high minimum monthly cost is one big barrier to adding more devices to the cell network, with the other being the cost of the module needed in each device. Verizon said it is making progress there, showing off a module on Wednesday that it says halves the cost of adding LTE to an Internet-connected device. Lanman promised that Verizon and its partners would be able to halve the cost again next year.

Those two steps, he said, should be enough to allow for devices to start being built that have no monthly fee at all. There have been a few such devices already, like Amazon’s Kindle, though most low-data-use devices don’t generate enough revenue to justify a traditional cellular connection. Books are a notable exception, where customers are paying several dollars for a piece of content that costs just pennies to send.

The next big generation of networking technology, known as 5G, is going to be better architected from the start to prepare for more connected devices. But while Verizon and others plan to begin testing as soon as next year, the standards haven’t been set and true commercial deployment is likely at least five years off.

Verizon doesn’t want to wait that long to start wiring up all manner of smart devices, Lanman said. Even with today’s underlying 4G LTE standard, Lanman said there is room to cut costs on both the device and network end.

Much of Verizon’s talk on Wednesday was about the business uses for cellular connections, such as in utility metering, agriculture and industrial applications. The company trotted out a winemaker from Hahn Family Wines, which has been testing cellular-connected moisture sensors on its Central Coast vineyards. Prior to installing the sensors, the winery watered their land a certain amount each week rather than according to the specific needs of each grapevine.

“They found out they were overwatering in some locations and underwatering in others,” Lanman said. “They love it.”

But consumers should benefit as well, Lanman said. Verizon has some ideas for the home it will introduce next year, though Landman said he wasn’t ready to offer much in the way of specifics. But the new network architecture should allow some low-data-using gadgets to come without a monthly fee, while more intensive data using devices are likely to retain a fee and tap into a shared data plan.

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