Energy firm proposes private LTE network for oil and gas firms

Sue Marek

The focus of LTE discussions in the industry has so far centered on commercial wireless operators and their upcoming commercial launches of the technology. But I recently spoke with a small Texas firm, called Texas Energy Network, that has big ambitions for using LTE technology in a private communications network to deliver high-speed data, video and VoIP to remote areas of West Texas and Eastern New Mexico where oil and gas companies have oil wells that need to be monitored.

TEN has enlisted the help of Alcatel-Lucent (NASDAQ:ALU) and plans to demonstrate LTE later this month using an Alca-Lu "LTE on wheels" truck to show how LTE can be used to connect an oil site sensor or link a monitoring camera on a pipeline and deliver live video images.  

Jim Shearburn, chief development officer at TEN, said most oil and gas companies currently rely on VSAT (very small aperture terminal) two-way satellite technology to transmit all their data back and forth from the oil well to the office because these oil wells tend to be in very remote areas where there is no terrestrial network. But VSAT technology has some inherent disadvantages: The data speeds are slow, bandwidth is low and VSAT terminals are susceptible to rain fade and other weather problems. 

TEN's management team, which includes CEO Greg Casey who formerly was in charge of Qwest's wholesale business, believes that LTE can transform the way oil and gas companies operate by adding efficiencies to their business. "This is the first unified IP platform that will be delivered to the oil field," Shearburn said. "We think that if we can increase the speed with which oil companies can get this data, they can make things happen faster and save on production costs."

Shearburn said TEN has partnered with another company, which he declined to identify, to get access to licensed spectrum for the LTE demonstration. He added that TEN is in the process of trying to acquire other licensed spectrum--and will consider spectrum in a variety of bands as long as LTE can be used in that band.

Considering the high price of building a private network and securing spectrum, I asked Shearburn if TEN would consider being a wholesale partner and using the network assets of another firm, such as LightSquared or Clearwire. Shearburn said TEN hasn't ruled out that option, but for now the company prefers to acquire its own spectrum and build its own network.

For LTE vendors, startups like TEN provide an interesting opportunity. But can companies like TEN afford to build an LTE network from scratch? It seems like an expensive proposition, particularly in remote areas where there may not be existing tower sites. I think TEN will face many of the same costly obstacles that commercial wireless carriers face when it comes to building out its network. I'll be interested to hear how this firm, and others like it, progress with their 4G ambitions. --Sue

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