Utility Week

UTILITY WEEK | 15TH - 21ST FEBRUARY 2019 | 19 Finance & Investment other bene ts such as simpli ed billing and reduced water consumption. What is also true is that deregulation has been fraught with challenges for retailers, not least billing and metering issues and tight margins. Manbir Thandi, a director and water specialist at law rm DWF, says: "The jury's still out on what can be made of this market. Business Stream had been on the starting line for some time waiting for com- petition to open up in the English market. This acquisition gives it a sizeable foothold and it is unlikely customers will switch, because the market is still maturing." Lind, meanwhile, says there is every rea- son to believe we will see more consolida- tion in the coming months and years. "You need only look at what's happened in the energy market over the past 12 months to see that more competition does not always equal happier customers. If by way of a con- solidation customers can save money, reduce consumption and get better access to more innovative technology, then few will have many complaints," Lind adds. Market leader Water Plus – a joint venture between Severn Trent and United Utilities – today boasts over 400,000 business custom- ers. The second-largest player is Scottish new entrant Castle Water, which has a customer base of around 310,000 a" er snapping up the business bases of exiting Portsmouth Water and Thames Water. Meanwhile, the merger of Northumbrian and Anglian's business retail arms to create Wave was cleared by the Competition and Markets Authority in August 2017. Wave chief executive Lucy Darch tells Utility Week: "Wave bene ts from economies of scale and migrating on to Gentrack Veloc- ity, which is a highly automated platform. This means our cost-to-serve is reducing, making us more competitive. I presume Busi- ness Stream will also be pursuing bene ts of scale. Further consolidation may occur, particularly if other retailers decide to exit the market, however at this stage most retail- ers are getting to grips with the market chal- lenges and working hard to overcome these and deliver increased customer bene ts." While consolidation is an inevitable by- product of a maturing market, it would be unlikely to bene t non-domestic water retail customers, Thandi warns. "With larger mar- ket share in fewer hands, will those KPIs be passed on to customers? I doubt it." An Ofwat spokesperson says: "We wel- come continued developments in the busi- ness water retail market. The sale of Three Sixty to Business Stream should help to ensure customers continue to see bene ts in the market." "All aff ected colleagues have been briefed and we'll be working with them throughout the transition pro- cess. We understand that this will be an uncertain time for colleagues, but securing their ongoing employment is of the utmost importance to us and we have strong internal policies which support us in doing this." Liz Barber, director of nance, regulation and markets, Yorkshire Water MARKET STATISICS SWITCHING OF SERVICE, BY NATIONAL RETAILER Source: MOSL CUMULATIVE SWITCHING Source: MOSL 250,000 200,000 150,000 100,000 50,000 0 -60,000 -40,000 -20,000 0 20,000 40,000 Apr 2017 May 2017 Jun 2017 Jul 2017 Aug 2017 Sep 2017 Oct 2017 Nov 2017 Dec 2017 Jan 2018 Feb 2018 Mar 2018 Apr 2018 May 2018 Jun 2018 Jul 2018 Aug 2018 Sep 2018 Oct 2018 Nov 2018 Dec 2018 Number of supply points Water services Sewerage services Total switches Sewerage gain Sewerage loss Water gain Water loss Water Plus Castle Water Anglian Water Wave Pennon Business Stream Water2business Affi nity for Business Everfl ow SES Business Water Clear Business Water First Business Water ADSM The Water Retail Company Regent Water Aquafl ow Tor Water Smarta Water Three Sixty Water Pod 53 Yu Water Waterscan Veolia Water Retail Utilty Bidder Thames Water Commercial Services NWG business Cambrian

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