Cambridge, U.K. --- (METERING.COM) --- December 1, 2010 - Telco software vendors can grab a 15 percent share of the billions of dollars that utilities worldwide will spend on new billing and customer care software for smart grids, according to a new report from Innovation Observatory.

Utilities’ legacy billing systems were designed for simple flat rate tariffs and batch processing of manual meter readings based on quarterly or monthly billing cycles. These systems cannot handle the massive increase in meter readings that smart meters will produce, and are not suitable for the more complex charging schemes, such as time-of-use (TOU) and dynamic pricing, that the hourly or half hourly readings from smart meters will enable.

Suppliers of charging and billing software for the telecoms industry, where sophisticated pricing and charging models have been used for many years, already have mature systems that can cope with many of the challenges that utilities face in introducing smart meter based services. Their solutions are commercially proven in processing high volumes of transactions in real time, and have the flexibility to handle the types of sophisticated time, usage, and event-based tariffs that are envisaged for smart grids.

A number of telco systems vendors are already eyeing up this new market opportunity for their products and services. One vendor that has had early success is Convergys, whose Smart Customer Information System has been chosen by U.S. utility Duke Energy for its smart meter deployment. Others are beginning to position their offerings for this new vertical, and will launch their propositions for the utility sector over the next two years.

“Investing in new charging and billing functionality is just one part of the massive smart grid jigsaw, but some important decisions lie ahead for utilities,” says Catherine Viola, author of the report. “Their choice of billing and customer care software will influence how well prepared they are for the smart grid world and the type of player that they can become.”

Utilities should install systems that not only enable them to cope with the immediate challenges of handling smart meter data and introducing simple TOU tariffs, but will provide them with a long term strategic weapon to realise operational efficiencies, create innovative services, and improve customer care. Thus a telco billing system could be a good option for some utilities.