Bluefield Research’s latest report, “Connecting Water Infrastructure: Telecom Company Strategies in the Global Digital Water Market,” finds that a host of telecommunications companies are trying to capitalize on the growing demand for digital solutions from water utilities and industrial firms.
The application of digital solutions for utility and industrial water management has seen a 53 percent increase in project activity since 2016. Digital water spending in the top ten key markets is forecasted to grow from US$8.7 billion to US$20.2 billion by the end of the decade. Globally, this activity puts the burgeoning sector on a 10 percent per year pace.
In conjunction with the water sector’s growing appetite for advanced communications, the industry’s unique connectivity requirements are becoming more apparent. Communications network operators and vendors are targeting a range of data-related challenges that include power consumption, bandwidth, and cost.
These strategic pivots toward water are driving competition between established cell carriers, IoT network pure-plays, and water technology incumbents (e.g., water meter vendors). While the competitive landscape remains unsettled, the dynamics are further complicated by the emergence of new communications protocols (e.g., 5G, NB-IoT, and LoRaWAN) that are expected to accelerate digital technology adoption in water.
Select telecom companies such as AT&T, Vodafone, BT and Huawei are carving out distinct strategic positions in water including go-to-market strategies and network offerings.
“Telecom companies are by default well-positioned to meet growing demand for digital water connectivity within their existing geographies, capable of leveraging existing network infrastructure and local relationships,” says Nina Rossiter, digital water analyst from Bluefield Research. “When utilities and municipalities are looking for ways to connect assets and move data, telecom providers are often seen as a natural fit.”
Analysis of telecom companies globally shows that many firms are offering implementation and integration services. In some instances, like Telstra and Verizon, they are going a step further by selling proprietary hardware and software directly to water utilities.
“In recent years, we have definitely seen an uptick in ‘outsiders’ looking into water from Big Tech to critical infrastructure players,” adds Rossiter. “Like these companies, telecom firms are more accustomed to different industry conditions, highlighted by faster sales cycles and technology adoption. How they respond to the fragmented and unique challenges of the water sector remains to be seen.”