There's a lot of money to be made for service providers that offer their wireless and wireline services to utility companies for smart grid and managed applications, argues Pike Rese.
Even though a majority of utilities still prefer to build their own private communications networks, the industry researcher's latest study revealed that the revenue opportunity for service providers will increase significantly, rising from $2.2 billion in 2009 to $4.9 billion by 2016.
Given the mobile nature of the utility industry, the major beneficiaries of this growth will be wireless operators. During the forecast period, Pike said the wireless service providers will see a six-fold increase in smart grid revenues.
Bob Gohn, research director at Pike Rese, said one of the benefits to utilities in opting to partner with a service provider is that they can "leverage existing infrastructure rather than building and operating their own networks."
Although utilities have been reluctant to work with outsiders due to service costs, Gohn believes that tide is slowly changing.
"And while service costs have traditionally not been as low as utilities would like over the past few years, public carriers are now getting more aggressive in their pricing, which we expect will yield significant dividends in the form of expanded utility contracts over the next several years," he said.
In addition to lowering their service prices, wireless and wireline providers like Verizon, for example, have been actively educating themselves about what the utilities require for service. Whether a service provider is offering wireless or wireless services, they'll be more likely to gain the utilities' ear if they craft solutions that are not only priced accordingly, but take into account their unique needs for smart grid applications.
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