Spain’s Telefonica has won a €1.78 billion ($2.4 billion) smart-meter contract in the UK that forms a part of the government’s ambitious plan to overhaul the country’s outdated metering system.
The deal will see Telefonica (Madrid, Spain) provide connectivity services over a period of 15 years in the central and southern regions of the country, representing two out of the three contracts that were up for grabs.
The operator has described the deal as the industry’s biggest M2M contract win to date.
In rolling out the technology, Telefonica Digital – the M2M arm of Telefonica – says it will rely chiefly on Telefonica’s existing cellular network but introduce mesh technology to hook up any hard-to-reach areas.
The operator is already using cellular networks to connect more than 400,000 smart meters in the UK, and claims that mesh technology has been successfully implemented in more than 650,000 households in Nordic countries.
“This deal is a huge endorsement of the decision to form Telefonica Digital, which gave us the right structure and focus on M2M to take our capabilities in this area to the next level,” said Matthew Key, the chief executive of Telefonica Digital. “We look forward to supporting additional smart-meter deployments in other Telefonica markets.”
Telefonica says it will begin working with other companies involved in the smart-meter rollout immediately, with mass rollout of smart meters scheduled to commence in 2015.
Authorities are looking to install more than 53 million smart meters across the UK by 2020 at an estimated cost of about £11 billion ($17.6 billion).
However, they expect they the new smart-grid infrastructure to lead to a net benefit to the UK of about £6.7 billion through reduced energy consumption and more efficient energy management.
Telefonica says the deal is the latest in a string of high-profile contract wins for Telefonica Digital, which has also recently secured business with PC maker Dell (Round Rock, TX, USA) and car manufacturer General Motors (Detroit, MI, USA).