Operators must build credibility with utility companies to win smart water and gas metering contracts

Operators must build credibility with utility companies to win smart water and gas metering contracts

By Ibraheem Kasujee, Research Analyst at Analysys Mason.

“Operators’ LPWA networks are well-suited to smart water and gas metering, but operators need to demonstrate that they are credible partners for utility companies.”

Traditional cellular connectivity cannot meet the battery life and propagation requirements of smart water and gas meters. NB-IoT and LoRaWAN networks are better suited to meeting these requirements, which presents operators with an opportunity to enter the smart water and gas meter markets. However, operators face competition to win connectivity contracts from experienced metering solution providers. These providers typically use proprietary technologies such as Wireless M-Bus and have built strong relationships with water and gas utility companies – relationships that many operators lack. Operators need to demonstrate that they are a credible partner if they are to be to successful in the water and gas meter markets. This article summarises the findings of our report IoT in smart water and gas metering: the role of NB-IoT and operators.

NB-IoT is suited to connecting water and gas meters

Operators initially struggled to win contracts on their NB-IoT networks. Figure 1 outlines the key connectivity requirements for smart water and gas meters: NB-IoT performed well in terms of coverage and propagation, but there were issues with battery performance and the lack of NB-IoT-capable devices. Both issues have been largely resolved and NB-IoT is now well-matched to meet the connectivity requirements of water and gas meters. Smart meter original equipment manufacturers (OEMs) are now adopting NB-IoT as part of a portfolio of communications technologies. Operators must continue to work with smart meter OEMs to demonstrate further improvements in NB-IoT’s performance.

Figure 1: Key connectivity requirements for smart water and gas meters

chart: key connectivity requirements for smart water and gas meters

Utility companies are looking for connectivity providers that can support a stable, long-term partnership

Utility companies have several commercial criteria when selecting a connectivity provider for smart water and gas metering. Operators must understand these commercial requirements to build credibility with utility companies. Key commercial considerations include the following.

  • Reputation. Utility companies are accustomed to dealing with metering specialists that have demonstrated success in water and gas metering and the wider utilities sector. To counter this, operators will need to demonstrate their credentials (for example, by leveraging other contracts with utility companies). Proximus and Vodafone won contracts with energy companies before they won significant contract wins for gas and water meters. In addition, Orange France developed a relationship with Veolia over several years prior to winning its water meter contract.
  • Commitment. Utility companies are looking for long-term partnerships. They may be reluctant to partner with firms if there are doubts over their ability to sustain the partnership. Operators need to demonstrate their long-term commitment to the utility sector.
  • Trust and privacy, Utility companies have concerns over data privacy. For example, GRDF even developed its own connectivity solution because it did not want to rely on third parties to handle its data. Birdz, the digital arm of Veolia, specified that it looks for operator partners that are aligned with its focus on data management and privacy.
  • Network longevity. Utility companies want assurance that the connectivity will be able to support their smart meters in 20 years time. For example, GRDF trialled several connectivity options (including 2G and LoRa) in the early 2010s but had doubts over whether these networks would be in place for the lifetime of the meters. Operators will need to make commitments about the lifetime of their NB-IoT networks.

Operators should seek partnerships with smart meter specialists, which can help operators to build credibility with utility companies

Utility companies are accustomed to dealing with specialist providers in the water and gas meter markets, including vertically integrated players such as Diehl Metering, Itron and Kamstrup. These players typically provide both the meter and the connectivity often using a proprietary solution based on Wireless M-Bus.

Operators can benefit by partnering with these specialists. Joint proofs-of-concept (PoCs) can be used to demonstrate the technology. Operators can also support utility companies by giving them the option of buying the meters with connectivity embedded (therefore the operator sells connectivity indirectly, via the OEM), or the utility companies can buy connectivity separately from the hardware (by buying connectivity directly from the operator). Both approaches will need the operator to collaborate closely with specialist metering firms.

The partnership will benefit the specialists because it can stick to its core competency of developing smart meters. Vodafone and meter manufacturer Kamstrup provide an example of one such partnership. The two firms started NB-IoT trials for water metering in 2015 and conducted trials in an NB-IoT open lab and a live trial for Agua de Valencia. Kamstrup later became one of the first smart metering OEMs to add NB-IoT to its portfolio in 2017.

Operators need to demonstrate their commitment to the utilities sector

The smart water and gas meter markets are starting to open up for operators, but operators need to demonstrate that they are a credible supplier by highlighting the benefits of their LPWA networks and by partnering with smart metering specialists. This will take time – typically several months, or even years – but this will be necessary to persuade utility companies that operators are committed to the utilities sector for the long term.

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