Telefónica UK said it has been selected as the preferred connectivity provider in the tender for a smart meter programme in the UK, with its share of the contract valued at £1.5 billion ($2.32 billion or €1.75 billion) over 15 years.
According to the operator the Smart Meter Implementation Programme involves the rollout of 53 million smart utility meters across the UK by 2020. Subject to final contracts, Telefónica has secured the markets in the Central and Southern regions of the UK, winning two out of three regions in the tender launched by the Department of Energy and Climate Change (DECC).
"It's a huge endorsement of cellular as the right communications technology and of our vision for smart meters to be the foundation of a smarter energy future for the UK," David Plumb, digital and new business director of O2 UK, said in a statement. "The decision is subject to contracts and we are working with the DECC on next steps and will be making a further announcement in due course."
The Financial Times reported that a consortium comprising Arqiva with BAE Systems and BT has been awarded the £625 million contract to provide the technology in the northern region and Scotland, with additional awards to Capita and CGI.
Telefónica said its proposed communications solution is based on its O2 cellular network in the UK, backed up by the use of mesh technology to connect meters in areas without cellular coverage.
The operator unveiled its smart metering platform in February this year, integrating machine-to-machine communications with metering infrastructure management to aid the deployment of smart meters.
As the FT noted, the UK government wants every home in Britain to have a meter that can monitor and control electricity and gas to reduce power consumption, which is part of its long-term goal for a sustainable energy supply.
Nonetheless, not everyone sees cellular networks as the best solution for M2M connectivity, according to Telecoms.com. James Collier, CTO of white space solutions provider Neul, told Telecoms.com that M2M services required "a network designed for purpose," and added that "mobile operators are not set up to provide this kind of connectivity because it's not symmetric."
Mobile operators would clearly disagree with this view as many see M2M as a major growth area for the future.
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