Telefónica UK Signs £1.5bn Smart Meter Deal

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Published: 23/09/2013
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  • The 15 year agreement is the world’s largest machine-to-machine (M2M) contract win to date

On 12 September 2013, Telefónica UK, which operates using the O2 brand, entered into two agreements to deliver communications services for the Central and South regions as part of the Smart Meter Implementation Programme of Great Britain (SMIP). The two agreements have a combined value of approximately £1.5 billion. This follows an announcement by the Department for Energy and Climate Change (DECC) in August 2013 that Telefónica UK had been selected as the preferred bidder for two out of the three communications service provider regions.

The SMIP is the world’s most ambitious smart meter deployment to date and will involve the roll out of approximately 53m gas and electricity meters across Great Britain by 1 January 2021. By providing greater visibility of energy consumption, smart meters will help consumers and small businesses to reduce usage, thereby helping to reduce their Co2 impact. Smart meters also have the potential to be a foundation for smarter homes with other value added services, such as home automation, able to connect through the infrastructure. Finally, they will drive innovation in the energy industry through enabling more tailored tariffs and through the development of smart grids. The £11 billion programme is expected to deliver a net benefit to the UK of £6.7 billion while a smart meter enabled industry could save 2 billion tonnes of Co2 per year in 2020*.

As part of the 15 year agreements, Telefónica will provide the communications infrastructure to connect smart meters in the Central and Southern regions of Great Britain. The technology solution selected by DECC is primarily based on Telefónica existing cellular network and complimented with mesh technology to provide connections in hard to reach areas.

The combination of cellular and mesh represents the ideal communications technology for smart meter deployments. Cellular is a proven, open, standards-based technology that is ready to support the needs of smart meters without needing additional infrastructure. Mesh compliments cellular, providing coverage in more remote areas and in hard to reach spaces. Telefónica has successfully tested both technologies in relation to smart meters and currently connects over 400,000 smart meters in Great Britain.

Commenting on the deal, David Plumb, Digital Director at Telefónica UK, said, “this contract win is a significant endorsement of the steps we have taken to focus on new digital services such as machine-to-machine communications and the leadership we are establishing in these areas. We are also proud to be playing such a central role in the delivery of a key national infrastructure programme which will transform our energy industry.”

With the agreements now in place, Telefónica will immediately start working with the Data  Communications Company (Smart DCC Limited) and the other successful service providers to design, build and test the solution. Mass roll out of smart meters will commence during 2015.

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*Source: Smart 2020: enabling the low carbon economy in the information Age

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