|
The promise of Broadband over Power Line (BPL) delivering high-speed Internet access to households through electrical wall sockets has driven recent activity from investors. With more than a dozen trials underway in the US, Pyramid Research assesses two predominant business models that will emerge from this craze – wholesale and BPL providers.
Larger utilities companies will focus on wholesale business while others will become a BPL provider. Utility companies have several options for BPL:
1. Allow another firm to access the grid and make the capital investments necessary to provide broadband access over it; this option is the least intensive for the utility in terms of investment, risk, and ultimately reward from BPL.
2. Invest in BPL and allow one or more ISPs to resell its broadband capacity; this is a wholesale or ‘carriers’ carrier’ model.
3. Provide high-speed Internet to existing customers; though this is the model that comes to mind most often, this is quite demanding on the utility and ultimately the most risky, yet yields more rewards.
For all utilities companies, a major draw is the opportunity to use the technology to meet internal business objectives such as remote monitoring – thereby dramatically reducing operational costs. Thus for the most part, options two and three are emerging as the most popular under consideration by utilities companies in the US. Different kinds of utilities companies focus on different issues. The attraction for the large publicly-traded utilities companies is to reduce costs; moving into the provision of Internet services is of lesser interest as these companies tend to be more risk-averse and shareholder-driven. For the local cooperatives located in rural areas, serving their customers is the highest priority, making them more open to the ISP model – and thus more aggressive in launching pilot trials.
To read the assessment of BPL market impact, obstacles facing global deployments and technology developments, purchase the latest issue of the Next Generation Trend Letter in the online store.
|
