Summary:

Utilities will spend $3.2 billion this year in telecommunications services, but only a third is related to smart meters. A growing proportion will pay for mobile broadband for workers as part of a wider shift to thinking mobile broadband access is essential for productivity.

Power lines against bright sun

Utilities will spend $3.2 billion this year on telecommunications services, but only some of that is even related to smart meters. A growing proportion will pay for mobile broadband for workers as utilities embrace a wider shift and buy into the idea that mobile broadband access is essential for productivity.

A study released Thursday by the Utilities Telecom Council estimated that utilities will spend 21 percent more than they spent two years ago, but a mere 3 percent more than they did last year. Two-way metering and associated networking represents about $1 billion of the total utility telecom spending in 2011, according to the UTC. Backhaul and transport networks represent the second largest category as electric companies try to connect their smart meters back to the web.

But surprisingly, smart meters and backhaul aren’t the big opportunity, the report found — mobile is. Spending on wireless communications as a proportion of overall telecom spending could double over the next five years, growing from 28 percent of telecom spending in 2011 to half of all telecom spending by utilities in 2016, according to the research.

The utility industry isn’t alone in its decisions to spend more on wireless; in fact, it may be running a bit behind. In August, In-Stat, another research firm, said wireless spending by small businesses will exceed their spending on wireline in 2012. At that point, wireless will become the largest portion of telecommunications spending for small biz. That’s certainly the case in our office, where cell phones dominate and mobile data plans are essential. What’s unclear is if the spending will be up so high because wireless service costs more than comparable wireline services, if the mix of services are expanding (i.e. moving from voice-only plans to data plans) or if it is being embraced by half of the SMB workforce.

Additional In-Stat data suggests that businesses are doing a mix of all three, with 44 percent more adding messaging to their voice plans between now and 2015 and forecasting that spending for voice, messaging, and data plans will rise 37 percent from 2010 through 2015 across all businesses.

This shift means enterprise apps will become much more important in the next few years as will figuring out how to secure mobile phones and tablets. Equally important, once someone is connected 24/7 and anywhere they go, is how to think about drawing a line between work and play– and then communicating that line to colleagues and superiors. Seems like the utility industry will soon get the practice that some other professions have had navigating this transition. Hopefully the end result is a safer, smarter and more efficient grid.

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