From Utility to UTelco

Business Models for Profitability
White Paper Thu 07 Jun 2018

UTelcos are competitive telecom operators owned by or related to a utility company (power, water, gas, oil, transportation). They usually begin as a group within the utility company in charge of delivering internal communication services. They can then become a competitive telecom operator under the utility-holding company or government entity.

Utility companies are exclusively positioned to become significant players in the telecom market from a few perspectives:

Right of way - They are authorized to lay fibers across the country.

Infrastructure - The same infrastructure and equipment (fibers, towers, switches/routers, transmission equipment) that support the utility’s operation (and which in many cases is underutilized) can be leveraged for developing a telecommunication business. In addition, utilities have established B2B and B2C relationships and infrastructure for billing and customer service.

Knowledge - The know-how and ability to build, operate, and maintain a telecom network is already in place. These were acquired while managing the network for the utility’s internal services.

Still, there are a few more aspects that must be addressed for the transformation from potential to reality:

Regulation - Offering telecom services by utilities is allowed in the country where they operate.

Finance - The utility’s parent company is able to finance the process.

Competitive landscape - The status of the telecom services, the level of competition, and whether there is room for an additional player.

Once these characteristics are met, many utility telecom operations decide to evolve from self-contained groups within an organization to competitive, revenue-generating telecom operators.