Smart Meters Putting Utilities on M2M Map

5/25/2011

Smart meters may be solely responsible for leading the utilities sector into the M2M space, according to one research firm.

In a new report, “Machine-to-Machine (M2M) Communication in the Utilities Sector 2010-20,” Machina Research, www.machinaresearch.com, estimates that the number of global M2M connections in the utilities industry will grow from 100 million in 2010 to 1.5 billion in 2020. That’s certainly a massive growth spurt, but the kicker is that the firm believes 99% of those connections will be smart meters.

According to Matt Hatton, the report’s author, there is one glaring reason for the rapid growth. “It’s all driven by government, whether it’s EU regulation or the U.S. stimulus plan, or China’s latest 5-year plan,” Hatton says. “There is some appetite amongst utilities for adopting smart metering to add new service features or in emerging markets to counter what is described euphemistically as ‘non-technical losses.’ However, government intervention is easily the main driver.”


The report also finds that cellular connections will ultimately dominate, growing from 38% to 57% of installed base by 2020. Metropolitan Area Networks (MANs), including powerline communications (PLC) and community Wi-Fi connections, will also be significant, accounting for 28% of connections in 2020, albeit down from 53% in 2010. Of the wireless wide-area connections, 3G is expected to dominate.

Hatton estimates the total market for M2M in the utilities segment will be worth approximately $33.7 billion in 2020, up from $5.6 billion in 2010 and peaking at $39.3 billion in 2017. After 2017, the number of new additions is expected to decline, resulting in a reduction in device, installation, and provisioning revenue.

The largest region in revenue terms is Emerging Asia-Pacific, courtesy of China’s significant investments in utilities upgrades. By 2020, China will account for 40% of global M2M utilities connections and 31% of revenue.

On a more cautious note, Hatton added that even with the massive number of connections, the amount of traffic generated by smart meters is going to be tiny. In other words, smart meters can’t be the only part of the utility sector that’s getting smarter.

“Any network operator that’s hoping to make any serious money out of smart metering, or the wider utilities industry, is going to have to do much more than just transport traffic,” Hatton says. “If they were afraid of being a dumb pipe for mobile data services, they should be terrified of having that role in smart metering connectivity.”





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