How Utilities are Creating New Revenue with Legacy Assets

Changing market dynamics across the power industry are creating a shift in the way that utilities operate. As more people leave rural America in search of high-tech lifestyles in urban centers, electric cooperatives and public power companies alike are dealing with the realities of customer erosion and an ever-increasing demand from their members to provide broadband. This situation is compounded by flat revenues due to lack of growth, as well as adoption of renewable energy and energy-efficient appliances. As a result, utilities are striving to develop new, more lucrative revenue streams. Furthermore, utilities are facing increasing pressure from customers to offer high-speed Internet, since many incumbent carriers are not expected to update their networks anytime soon.

At Fujitsu, with our long information and communications technology industry heritage, we can easily see a parallel with the rise of the mobile phone roughly 25 years ago. As telecom subscribers began ‘cutting the cord’ in favor of wireless service, and reduced subsidies, established telcos were faced with the challenge of developing a revenue replacement strategy. Fortunately, established players in the telecom industry had existing capital and operational investments — in the form of infrastructure, unused capacity, systems and support and most importantly, people — that they could leverage to offer new broadband services to their existing customer base.

Likewise, utility companies also have significant assets at their disposal that can be monetized for new revenue opportunities. The key is knowing where to look and how to make the most efficient use of existing investments to improve profit margins.

Shifting Focus

Many utilities have existing fiber buildouts that they are upgrading to the latest technologies to take advantage of digital transformation to operate their electrical service. As a result, these utilities are realizing they will soon have surplus network capacity on their hands. For savvy public power utilities and rural electric cooperatives, the best way to monetize their fiber assets is to deploy a below-the-line, or unregulated, service over their own broadband network.

For example, many utilities have invested in advanced metering infrastructure (AMI) in parts of their service areas, with fiber networks capable of speeds up to 100 Gbps supporting electrical substations. A utility with this infrastructure could offer broadband service to customers in the vicinity of each substation.

Beyond fiber infrastructure, utilities have other assets that can be leveraged to offer fixed broadband services, Wi-Fi or fixed wireless access:

  • Knowledgeable workforce with service delivery expertise
  • Current fleet of vehicles
  • Vertical assets, such as light poles and towers
  • Data centers for electronics and colocation services
  • Back-office administrative and billing support systems.

Now more than ever, utilities have options available for using existing infrastructure to replace lost revenue sources with minimal additional capital investments. This strategy not only improves the bottom line, it also, more importantly, brings 21st century services to rural America at a much lower cost since they have existing assets/foundation to launch a new service. And as more consumers, businesses and cities embrace advanced broadband technologies, like smart applications and the Internet of Things (IoT), the opportunities will only grow stronger, particularly with the addition of data analytics, cybersecurity and artificial intelligence.

Where to Start?

While the promise of profitable broadband services is certainly enticing, some utility companies are reluctant to consider a new business model. How do they choose the right strategy? What can they do to minimize costs and alleviate risks? What assets can they combine and how do they put them together?

To ensure a successful transition to digital transformation, an important first step is choosing the right partner to make the journey with you. Becoming a broadband service provider is more than just building a network. The right partner will offer expertise in how to finance the network build-out, the best approach to implementing deployment, and what sort of services and “smart” applications you can offer to maximize monetization. In many cases, the right partner will even handle rollout and manage the network for you, until you are ready to take over.

As a full-service integration company, Fujitsu works closely with utilities to help them design, deploy and manage broadband networks, bringing all the pieces together in an end-to-end solution that fits their unique business case. We can analyze your existing assets to determine what capital investments and support systems can be leveraged, and develop a strategy to speed services to market so you can begin to realize below-the-line or unregulated revenue as quickly as possible. And with our years of experience and networking skills, we can manage network operations for you.

Lighting Up a Bright Future

A convergence of trends is creating new challenges for utilities, from the shifting demographics of rural America to increasing adoption of renewable energy. At the same time, the advancement of broadband technology, along with the IoT, smart applications and “always-on” connectivity, opens up vast potential for new revenue models and business opportunities across the utility market. To learn more about how you can put advanced technologies to work within your existing electrical utility, and grow “below-the-line” revenue, call Fujitsu to arrange for a complimentary assessment of your opportunity.

Get Smart: Why the Future of Your City Depends on Smart Infrastructure

The single biggest factor in determining the fate of your city’s digital future is its technological infrastructure. Because we live in an internet-based, digital age, if your city wants to be at the forefront of progress, economic development, growth, and relevance – it must invest wisely.

The right kind of infrastructure – high-speed fiber and wireless broadband – is essential. By comparison, the strength of a building lies in its foundation. A poorly constructed foundation can’t be counted on to support the load of the entire structure. Likewise, your city’s broadband infrastructure must be a rock-solid foundation so it, too, can provide the critical platform to deliver enhanced services, innovate and enable a smart city.

Those cities that have invested in a broadband infrastructure view it as an asset, just as valuable to their community as its other public infrastructure – water, streets, sewer lines, or gas/electric utilities.

Today, incumbent carriers aren’t upgrading networks or extending broadband services fast enough for unserved or underserved smaller and rural communities. As a result, many communities are left to lease aged, copper-based networks. Unfortunately, these communities’ economic fates become dependent, in part, upon the incumbent carriers’ network modernization timetables. By not being able to take control over their destinies, many cities adopt a wait-and-see approach which puts them at a big disadvantage to other, more proactive cities. It puts the city and its residents behind the technology curve and forces them to play the catch-up game.

Modern cities require modern infrastructure. In order for your city to solidify itself as economically viable, competitive, and a desirable place to live, you must undergo a digital transformation. Doing so is the catalyst for a fundamental reshaping of your city’s digital future. With a modern broadband foundation, you will have the primary building blocks for cloud infrastructure, sensors, smart services and applications. All of which give your municipality an edge as you evolve toward a smart city – a smart infrastructure with the connected connectivity, data, artificial intelligence (AI) and the enhanced capability to solve pressing civic issues.

The Drawbacks of an Outdated City Communications Infrastructure

Being deprived access to the most up-to-date technology can make your city feel old-fashioned and pose an inconvenience to your residents, anchor institutions, and businesses. A leased, copper-based network can be rife with challenges, including limited bandwidth capacity, a lack of intelligence to inform, and interoperability complexities when rolling out smart city technologies. Not to mention that copper can carry far less data at far slower speeds than fiber – which means many of the cloud- or Internet-based technologies associated with smart infrastructure cannot effectively be operated or hosted.

Bottom-line, an outdated infrastructure is a limiting factor. For example, it can be a deterrent for attracting outside business investments, tourism, people migration, and job growth.

How can a City Leverage Smart Applications?

Connected applications offer your city numerous possibilities to take advantage of a smart infrastructure. Your city personnel can use the data you’ve collected from connected infrastructure to make informed decisions about what makes your city run best – and this is what ultimately makes a city smart.

There is a wide range of smart city applications available today, including:

  • Active security: Increase your level of smart protection with technologies like facial and license plate recognition, gunshot detection, perimeter patrolling, and crowd counting. They give your security officers greater situational awareness on recognizing potential hazards, understanding when a situation is escalating, and knowing how to respond appropriately.
  • Parking and Transportation: Smart parking technology can detect parking space availability, automate metering, dynamically price spaces, issue tickets, and collect payments.Also, by leveraging connected cameras coupled with AI, traffic engineers can better manage traffic flows and synchronize signals. This capability provides the smarts necessary to lessen congestion, reduce air pollution, and ease commuting stress.

Co-creation Brings it all Together

When you’re ready to make the bold step forward on your digital transformation journey, you don’t have to go it alone. As your innovation partner, we’ll take a collaborative approach to plan, design, integrate, and implement your vision from concept to reality – whether that’s building a multivendor broadband network from scratch or upgrading it with smart infrastructure, including operating and maintaining it. Working together, we’ll co-create a unique solution that delivers real outcomes – real success to your community, including public safety, economic opportunity, operational efficiencies, and civic engagement.