The utility industry is facing financial pressure due to growing urban populations, disruptive technology, and the need to replace chronically under-funded infrastructure. The use of core utility services is stagnant or declining as water conservation, concern about carbon emissions, and the growth of residential photovoltaics slowly chip away at the traditional utility revenue stream. On top of this, consumers are demanding more convenience and convergence from the services they receive. To overcome these challenges and prepare for the future, many utilities are readying themselves for a bold step into the lucrative market of commercial broadband
The utility sector already knows a bit about broadband, as innovative network management techniques have seen utilities invest heavily in communication infrastructure and IoT devices to enhance network operation with improved monitoring, control, and automation. With customer billing systems and a modest communication network already in place, all that is left for utilities to do to complete the picture is scale up their broadband network and install fiber to the home.
To make things even easier, the federal government is providing funding and removing red tape to encourage a period of rapid expansion in the telecom industry and increase broadband internet access across America.(1) At this moment, the broadband industry is on the cusp of a large and disruptive expansion where business opportunities are ripe for the taking.
Electric Power Utilities look to be the most likely utility sector to move into communications for numerous reasons. Firstly, the demand for electric power is falling much faster than water or gas as residential photovoltaic penetration is quickly ramping up across America. Furthermore, electric utilities have already taken the lead in IoT and communication technology as smart grid initiatives have driven the expansion of private utility broadband infrastructure.
Electric utilities have another advantage in that the infrastructure for power distribution and communication networks share a similar organizational structure. From high-level infrastructure down to customer connections, these two networks have many common elements which can be consolidated for significant cost savings. From a network construction point of view:
- Excavation for electrical cable can be used as an opportunity to install fiber ducts (or vice versa)
- Overhead comms lines can be installed using existing power poles
- Telecom cabinets can be installed alongside low voltage substations
- Distribution substations can be used to house mid-level communication equipment
According to research conducted by Huawei, “Using the infrastructure of power companies is likely to provide the biggest cost benefits in suburban and rural schemes where overhead deployment is more widespread … In rural scenarios, cost savings can reach 45 percent.”(2)
For any type of utility, there are cost savings to be made in running a dual network. In terms of day-to-day maintenance, field inspections can be carried out with increased efficiency as multi-skilled workers carry out condition assessments of utility and communication infrastructure in the same trip.
But the real area where utilities have an advantage over other new players to the telecom market is their existing relationships with customers. If a homeowner already has a good relationship with their utility, then they will generally be open to receiving more essential services from the same company. Furthermore, the allure of bundled service packages and special offers can attract customers looking to make savings on their monthly bills.
From a field service perspective, customers can also get a better deal with a dual service provider. If there’s an issue with a customer’s broadband connection, field technicians can easily take the opportunity to have a look at other services in the customer’s household.
Field Tech: I’ve found out what the problem is, your internet should be back up in running in about an hour
John Doe: Cool, thanks a lot!
Field Tech: And while I’m here, do you want me to take a look at your water fixtures and give you some advice on how to save on your water bill?
John Doe: That sounds great!
In the case shown above, John had a problem with his internet and was possibly a bit upset with his broadband provider. A traditional broadband company would just fix the internet problem; however, a dual service provider can go the extra mile for the customer by helping them out with another service at the same time.
Field service is a great chance to impress customers and moving into the telecom market could help your company get ahead in this area, but how does providing multiple services fit into a broader customer engagement strategy?
Getting the attention of customers is one of the biggest challenges in the utility and telecom sectors. The future of customer engagement is digital; but, with tech giants and consumers brands competing fiercely for screen time, it can be hard to even get your foot in the door. It is no wonder that customers aren’t actively engaged with water, electricity, gas, and broadband providers at the same time; there is just too much going on already and not enough reasons to get involved.
But what if one company consolidated multiple service provider relationships into a single point of contact? With two services under one web platform provided by one company, customers can enjoy a stronger relationship with their service provider without the hassle of dealing with two separate companies. By moving into broadband, utilities give customers more reasons to stay engaged and keep the conversation going.
The business case for moving into commercial broadband is stronger now than it has ever been. Federal funding is powering a period of growth across the broadband sector, existing infrastructure give utilities a comparative advantage thanks to the re-use and consolidation of network assets, efficiencies can be found for ongoing network maintenance, and, most importantly, customers can enjoy a higher level of service both in person and online. If you are ready to take this big step into the world of broadband, now is the time.
