Telcos and broadband firms say they have no current plans to enter energy retail despite smaller firms eyeing multi-utility business offerings. But those in the broker and billing market believe that may soon change.
Virgin and Vodafone told The Energyst that energy retail was not in their sights. BT said the same, but pointed to a recent deal with Good Energy whereby its staff, pensioners and customers that are moving house will be offered a discounted rate on green gas and power.
Utility Warehouse is currently making headway as a bundled service provider, suggesting today that it will achieve 5-10% customer growth this year. Meanwhile telecoms specialist Arrow Business Communications recently acquired energy broker Pulse in a bid to drive revenue growth.
Noting that deal, James Morrison, head of business development at energy sales platform Online Direct, said he “would be surprised if there aren’t at least three or four more telecoms names making noise in the market over the next 12-24 months”.
Paul Fitzgerald, sales and marketing director at smart billing firm Junifer Systems, agreed that telcos will enter the energy retail market, albeit over a longer timescale.
“I definitely think it will be a multi utility environment in the next 5-10 years,” he told The Energyst.
“Sky offering TV, broadband, telephony – energy is a natural progression for companies like that. BT, perhaps Vodafone, could start offering some kind of utility product. Telcos many years ago moved from a single product and that is the nature of how things progress. I can see the same thing happening in energy.”
Some big six suppliers already offer telco services. SSE, for example, sells phone and broadband packages, and, according to the Telegraph, is mulling serious investment in fibre.
Smart meters will enable connected homes and appliances, which will require sophisticated management of exponential increases in data. Those services are likely to be accessed by consumers via their phones, suggesting that telcos or internet giants such as Amazon (itself now moving into loans) could be best placed to profit from that shift.
So while the telcos say they have no current plans to enter the market, that may well change. SSE, in building out a broadband business, is perhaps wise to that threat.