U.S. utility telecom spend could reach $3.2 billion in 2011, study finds


Connie Durcsak,
President & CEO,
Washington, DC, U.S.A. — (METERING.COM) — September 12, 2011 – Utilities in the United States could spend at least $3.2 billion on telecommunications equipment and services this year, according to a new study from the Utilities Telecom Council (UTC).

This level of communications spending represents a 21 percent increase over the estimated $2.64 billion utilities spent in 2009 and at least a 3 percent rise over the $3.1 billion spent in 2010.

Chief among the categories of telecom-related spending is advanced two-way metering and associated networking, which represents almost one-third, around $1 billion, of the total utility telecom spending in 2011, the study finds. The second largest category of telecom spend is transport networks, with utilities expected to spend around $813 million on fiber, microwave, WiMax and other forms of transport technology this year.

However, wireless communications is the major growth area for utility telecommunications. Spending on wireless communications as a proportion of overall telecom spending could double over the next five years, growing from just over a quarter of telecom spending in 2011 to half in 2016, according to the research.

“The vast majority of utilities perform their own telecom operations, particularly now as smart grid technologies fuel the modernization of the nation’s energy grid,” commented Connie Durcsak, president and CEO of the UTC. “Our study once again confirms that utilities are important players in the telecommunications world, investing billions of dollars annually to build communications infrastructures that ensure efficient, reliable and safe delivery of critical utility services to all Americans.”

According to the survey 85 percent of the respondents said their utilities perform 75 percent or more of the telecom operations, with 45 percent stating that all of their utilities’ telecom operations are performed internally.

The survey also found that the top two criteria utilities rely on in selecting telecom related vendors are the degree to which they have existing relationships with the vendors, and how compatible the vendors’ solution re with their existing equipment.