Cellular smart meter growth set to soar

Advanced electricity meters with integrated cellular communications modules are forecast to increase from 2.6 million shipments in 2010 to 9.5 million shipments annually in 2016, according to a report from IMS Research.

“The US and UK are forecast to experience the largest volumes of cellular shipments through 2016 for distinct reasons,” said Rolando Campos, the author of the report. “In the US, telecoms have reduced the cost of data plans for meters significantly to about $1 (or less) per meter, per month. Utilities that wish to reduce up front capital expenditures by over 40% and reduce operating expenses are finally realising the benefits of using public cellular providers.”

Operating costs are lowered by reducing or eliminating the networking and maintenance staff needed to maintain a metering network. In the USA, a larger percentage of the opportunity for new smart meter installations (that is endpoints not under contract) will likely come from smaller utilities that have spread-out populations in diverse geographies.

Smaller utilities have less capital and often do not enjoy the tax write-offs that come with large fixed-capital intensive projects.

“As telecoms providers lower the total cost of ownership for a cellular-based smart metering solution, not only will small utilities in the US switch to a cellular option but larger utilities in the US and throughout the world may begin to seek ways to collaborate with local telecoms to make cellular a more viable option,” said Campos.

The UK is forecast to have the largest cumulative volume of cellular smart meters in the world from 2010 to 2016. Cellular products are key in the UK due to the general structure of the utilities and grid operators, whereas a meter change-out may happen piecewise, making cellular M2M devices the likely answer.

There are already plans for some suppliers to ship cellular meters next year and, as telecoms in the UK begin to see the business opportunity in the US mature, telecoms providers in the region are likely to follow suit and make pricing per meter more competitive.

The report is called “The World Market for Smart Electricity Meters – 2011” and is being published this month.

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