Capita, CGI, Arqiva and Telefónica win UK smart meter contracts

Capita, CGI, Arqiva and Telefónica are "preferred bidders" for contracts to support the UK's smart meter roll-out, the government announced today.

Outsourcing giant Capita is the preferred bidder to become the Data and Communications Company (DCC) licensee.

This means it will "provide a two-way communications channel between smart meters and a central communications hub to which smart meter data users (energy suppliers, network companies and other authorised third parties) will have access for specified purposes.

The DCC contract is worth an estimated £175 million over 12 years.

CGI, the Canadian IT services company that acquired Logica in 2011, is preferred bidder for the Data Service Provider contract. This means it will support the exchange of data between meters and the DCC.

This contract is worth an estimated £75 million over 8 years.

There are three telecommunications contract on offer: one for the North of England and Scotland, one for the Midlands, East Anglia and Wales, and another for the South of England. 

Arqiva, the company that operates the UK's TV broadcast infrastructure, is the preferred bidder for the Northern contract, worth an estimated £625 million over 15 years. 

The other two telecommunications contracts are likely to go to mobile operator Telefónica. Between them, these are worth an estimated £1.5 billion over 15 years, making Telefónica the big winner from the smart meter roll-out.

These deals are still subject to contract negotiations, which will be complete in a few weeks.

Companies that had been in the running but came away empty handed include G4S, Vodafone, BT and SAP.

Earlier this year, the government pushed back its target for completion for the smart meter roll-out by a year to 2020. The project will start in 2015, rather than next summer as originally planned.

The entire scheme is expected to £11.5 billion. The government argues that by giving citizens visibility into their energy consumption, smart meters will help them reduce their energy consumption.

In a report on smart meters earlier this year, consumer advocacy group Which? warned that while the roll-out will be good for energy providers, it is not certain that consumers will benefit.

"It’s … estimated that they will save energy suppliers more than £300m a year, by removing the need to take meter readings or deal with bill disputes," Which? said.  

'However, the cost of installing smart meters on a national scale – which energy regulator Ofgem estimates will cost around £11bn – is also likely to be passed on to customers by the energy companies in the form of higher gas and electricity bills."


Alan Dobie

Alan Dobie is assistant editor at Vitesse Media Plc. He has over 17 years of experience in the publishing industry and has held a number of senior writing, editing and sub-editing roles. Prior to his current...

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