The largest Japanese cell-phone company, NTT DOCOMO, unveiled plans to piggyback an emissions-tracking network on top of its existing large network of cell-phone towers. This is a very, very smart move. Why? It points the way to both accessing a new economic opportunity for DOCOMO and addressing a key fast-growing market and leveraging existing assets that are hard to replicate -- those tall towers and cell sites, located in dense urban areas and near industrial parks.
The network will launch on December 21 with environmental sensors in 300 locations near Tokyo and the bordering Shizuoka Prefecture. Should the trial run succeed, the network will expand to 2,500 locations around Japan by early 2011, with future possibilities for expansion into a 9,000 location ecogrid. The network will initially offer information on pollen levels in the air and will later offer data on carbon dioxide, ultraviolet rays, and other air-quality or atmospheric conditions.
Carbon Trading Customers
NTT DOCOMO says it expects its customers to include weather forecasting and information services, health-care institutions, and governments, but it seems to have overlooked a key customer: carbon trading exchanges (and, on the flip side, major emitters).
The die is already cast: some sort of emission trading will be a part of the global economic scene. A handful of exchanges are already trading carbon credits. Annual values of the credits now eclipse $200 billion, according to Point Carbon, and rapidly heading skyward. So clearly there's an opportunity for companies that can verify emissions by polluters or carbon mitigation by forestry companies, and others that are selling off carbon credits.
How much of an opportunity? That's hard to estimate, but considering the spate of emission-credit fraud that has rocked the European Union, and the shutdown of some of the world's most respected carbon-credit verification companies, clearly verification is becoming a bigger concern. Yes, there's a modicum of on-the-ground due diligence, but in the wilder parts of the world, scams abound. It's fairly easy to defraud global investors by selling them bogus carbon-mitigation credits.
Looking for Smoking Guns
At the same time, governments struggle to track emissions of other types of pollution elements, such as mercury from coal-fired power plants, with any reliability, or at any detailed, down-to-the-plant level. The detection mechanisms for atmospheric pollutants rely on the same sort of molecular fingerprinting technologies that could work across almost any airborne substances. Building a 9,000-station network in Japan suggests fine-grained coverage that could let government agencies find the smoking guns, tracking polluters down to their very smokestacks.
And the fact that DOCOMO can even afford to roll out such a network implies two things. First, that DOCOMO sees technology cheap enough to make this infrastructure possible. Cell-phone giants can afford multibillion-dollar rollouts, but those are primarily tied to existing or clearly planned future revenue streams. Which leads to the second point: Clearly, DOCOMO sees a real return on this investment. This is one of the world's best-run mobile communications companies, and it's been a leader in technology adoption. They are smart operators, and they've left U.S. wireless companies in the dust.
On the Road to Copenhagen
The timing of the announcement is interesting -- landing squarely in the run-up to December's Copenhagen Climate Change Summit. (It could also be a huge boon for Picarro, which makes carbon-sensing gear that can easily fit on cell-phone towers.)
The eco-sensing model could easily appeal to U.S. carriers as well. Domestic carriers are always looking for ways to leverage their networks for more cash flow, and that could become more acute as revenues per user inexorably decline due to increasing competition for mobile broadband users. A price war has already broken out, with T-Mobile and MetroPCS offering all-you-can-eat mobile broadband access at rates well below those offered by industry giants AT&T (T) and Verizon (VZ). Another company that could stand to gain hugely from such a network would be American Tower Corp. (AMT), the largest operator of cell towers in the U.S.
The upshot? Smarter towers could mean a smarter approach to environmental policy, and more money for DOCOMO. Sounds smart to me.
Alex Salkever is Senior Writer at AOL Daily Finance covering technology and greentech. Follow him on twitter @alexsalkever, read his articles, or email him at firstname.lastname@example.org.
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