Arthur D. Little: Telecoms Operators Prepare to Tap into the Smart Grid

A strong opportunity exists for telecoms operators to enter the power market by providing backbone infrastructure for smart grids. This is the core finding of a new report from global management consultancy Arthur D. Little – “Smart Grid opportunities for telcos” – in which experts analyze a range of business models in the context of smart grid adoption, and evaluate their attractiveness and feasibility for telecoms operators. The consultancy has additionally developed a “Future Grid Strategy Kit” for telecoms operators to help them to prepare for a successful entry into the power market.

Governments and utilities across the globe have recognised the environmental and financial benefits of managing both supply and demand for electricity through smart grid development. With decentralized electricity generation – from solar power for example – increasingly creating volatility in supply, the need for an intelligent grid maintenance and management system is becoming ever more important.

Potential business models for operators to explore include:

• Next Generation Billing – Telecoms operators already have the expertise and infrastructure in complex billing and are in a strong position to present themselves as service providers. There is also increased sales potential in bundling electricity metering with existing telecoms products
• Energy Management Portal – As customers become increasingly more involved in their energy consumption, they will require constant access to information. This would not present an overly complex task for telecoms operators as existing customer portals could be expanded to include energy management functions

While smart grid presents a unique opportunity for telecoms operators to become established players in the electricity value chain, the structure of the smart grid market is far more complex than that of telecoms operators’ traditional market. Therefore careful preparation for entry into the electricity market of the future is vital.

“The challenge that telecoms operators face when entering the power market is formulating a robust strategy that will enable them to respond to the changing technological and economic environment,” comments Dr. Matthias von Bechtolsheim, Director in Arthur D. Little’s Energy & Utilities Practice. “Arthur D. Little’s Future Grid Strategy Kit has been developed to enable systematic analysis of both the potential profitability and feasibility of each individual business model.”

To access the full report, please visit: www.adl.com/Smart_Grid