Utilities sector offers $5b opportunity for MNOs

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Mobile Network Operators (MNOs) will remain solely connectivity providers if they do not shake up their business, suggests ABI Research. The utility segment is prone to disruption, ripe for digitalization, and forecast to present a $5.3 billion opportunity by 2022.

In the report “UnTelco in Utilities: Telco Opportunities and Market Activities” ABI Research recommends that MNOs use “UnTelco” strategies now, rather than wait on the promise of 5G.

“The energy utility market is in the midst of major digitization with new technologies, players, and market opportunities that are disrupting the traditional status quo. MNOs must act now and target adjacent areas from the smart home to off-grid energy generation” said Pablo Tomasi, Senior Analyst at ABI Research.

“MNOs must use their network expertise to help utilities manage and connect their dispersed networks, they must deliver solutions that support utilities’ digitization efforts in smart workforce and security, and they must partner with utilities to create synergies in new growth areas such as the smart city. MNOs connectivity can be an entry point but cannot be the end goal. Otherwise, they could miss out on the expansion of related opportunities as happened with the explosion of over-the-top (OTT) services.”

Some MNOs are beginning to understand the need to innovate and implement UnTelco strategies and are moving beyond their traditional connectivity limits. “This is encouraging for the sector,” noted Tomasi. “For instance, Orange delivers off-grid energy solutions across several of its African markets, creating a new customer channel, building an ecosystem, and expanding the use of its mobile money offering. Turkcell provides another example as the MNO eyes the energy retail market to strengthen its position in the highly potential smart home market.”

In the smart home, MNOs can bundle their energy offerings along with other traditional or digital services, increasing customers’ ARPU and loyalty.

With competition in the digitization game increasing, MNOs need UnTelco business models now, not when 5G will be widely deployed. If MNOs wait for 5G, they will be too late to lead the digitization of the markets as other players will already be established. MNOs should use whatever technology is available to them today and understand what internal processes are needed to implement an UnTelco business model.

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