Edward Gately - 13th October 2016
The smart utility meters market already is well-established and rapidly leaving other Internet of Things (IoT) markets behind.
That's according to Mobile Experts' new report, titled "Smart Utility Meters 2016." More than 65 companies are profiled in this report.
About 48 million smart meters currently are deployed each year. The major differentiators in this market are battery life, long-range operation and low cost, according to the report.
"The smart meter market did not 'take off' recently but has been building up for about 20 years already," says Joe Madden, principal analyst at Mobile Experts. "This is the most mature segment of the larger IoT market because large utilities have been investing for so long."
The utility meter market is a good example of how IoT will develop, according to the report. The application is already fairly mature, with multiple technologies investigated during the past 20 years and narrowed to a few key technology areas. The early adopters already have ramped up deployment to tens of millions of devices, it says.
"Smart utility meters began as a way to reduce cost for the utility company," Madden says. "No more walking from house to house to read the meter. Nowadays, the simple meter reading is leading to new applications which help the utility to find problems, such as identifying the location of a leak in a water pipe, to offer differentiated pricing, such as cheaper electricity at night, and promote conservation by providing better information to the end user."
The large electric utilities that lead the market (Con Ed, PG&E, TEPCO) already have invested heavily in this area, but most of the deployment so far has been one-way communications for automated meter reading (AMR). Today, all of the major utilities prefer two-way communications to be able to load software updates and to collect data more reliably, according to Mobile Experts.
Growth in the electric meter market is fairly steady at about 12-15% annually, and growth in the water and gas markets is higher as adoption is just starting, the report said. It's a sizable market for connectivity, with about $3 billion in equipment revenue and $900 million in services revenue across all technologies.
The utility meter market is not a good target for GSM, LTE or narrowband IoT (NB-IoT) service providers, according to Mobile Experts. GSM and LTE technology do not fit the low-cost/long battery life model.
NB-IoT will be an improvement from a technical point of view, but it's too late to penetrate the big leading utilities as most major utilities have already chosen their favored technology and have invested in millions of devices in the field, the report says.
In addition, utilities prefer to own and control their infrastructure over a 20- to 40-year time scale, so for bigger utilities the NB-IoT service plan will be unattractive. However, smaller utilities will be more open, "so we expect 8-10% of the market to adopt NB-IoT by 2021, but we don't expect this growth to take over the entire market," Madden says.