Can CSPs build the quintuple play by partnering with utilities on smart metering? (Part 1)

Recent forecasts by Fortune Business Insights predict the global Internet of Things (IoT) market size to grow from $714.48 billion in 2024 to $4,062.34 billion by 2032, at a CAGR of 24.3%. This growth underscores IoT's pivotal role in shaping industries, particularly through smart metering in the utility sector.

The Rise of Smart Metering Technology

Smart metering is revolutionizing utility management by allowing for real-time or interval monitoring of electricity and gas usage at residential and business premises. Regulatory and territorial barriers are increasingly being addressed, with regions like the European Union having advocated for a complete transition to smart meters in 2020 to tackle climate change and optimize energy resource management, a goal that has significantly shaped current regulatory and operational frameworks.

Global Advances in Smart Meter Implementation

In China, the shift from traditional to advanced metering systems has continued past initial projections. Similarly, in the United States, more states are legislating the adoption of smart meters, pushing forward the market's growth.

Transforming Utility Management with IoT

Smart meters are at the forefront of this transformation, enabling utilities to gain immediate and precise consumption data. In a typical smart meter scenario, smart meters collect usage data and transmit it to the supplier back office. From this data, customer bills may be calculated and suppliers can gain a more immediate and accurate view of the consumption of energy. A two-way communication channel is established between the supplier back office system and the end customers premises (panel, smartphone, tablet), sending usage and billing information detailing energy consumption in an understandable format. The integration of mobile apps allows customers to monitor their energy consumption in real time and adjust behaviors to optimize costs.

Strategic Partnerships and Future Outlook

M2M technologies are key to real-time monitoring and alerts that help control consumption and report issues. However smart these meters might be, they all require two things: connectivity to and support from a communications network, and a new approach to service enablement, billing and management of these micro-transactions. What was once a very manual process for utilities—sending a meter reader to check actual usage or guessing on estimated usage—is now simplified through real-time monitoring and reporting.

However, although M2M may have simplified a process and reduced labor costs, the process of handling all of these little pieces of data is far from straightforward. 

Utilities are faced with the choice of either upgrading their billing and business process management systems or partnering with competitive service providers (CSPs) who possess established customer relationships. CSPs already have a quadruple play of services—telephone, broadband, video and mobile—that they bundle to the end user. Can they successfully add utility billing into this mix?

In theory, it would seem to make sense for CSPs to enter this market.

They are:

• Already part of the smart meter food chain, so to speak, because they are utilized to connect the smart meter with the utility.
• Already have an established relationship with the user through the other services they offer.
• Starting to understand the unique requirements that M2M services bring to the table in terms of back-office systems.

It would seem to be a natural fit for utilities and CSPs to establish partnerships to maximize their strengths and their revenue. In Part 2 of this article, we’ll look at the challenges to making this a successful union and what’s truly needed in order to effectively engage with customers on smart metering.

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By: Flavio Gomes, Founder & Executive Chairman at LogiSense

As posted on: M2MNow The Global IoT News Source