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UTILITY Week 11th December

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24 | 11TH - 17TH DECEMBER 2015 | UTILITY WEEK Operations & Assets Market view T oday, 83 per cent of UK premises have access to superfast broadband, accord- ing to Ofcom. Cloud computing, big data, end-user mobility and other web-scale applications are putting huge pressure on service providers to deliver bigger, better and faster connectivity to end users. This offers an opportunity for utilities. Traditional energy companies continue to operate in heavily price-controlled domains, forcing business leaders to search for new ways to extract value from existing invest- ments and capabilities, or build out new rev- enue streams completely. For many utilities, branching out into telecoms and becoming a "utelco" is a logical step because it presents an opportunity to diversify and profit from the high demand for 24/7 connectivity. Thanks to existing fibre networks used to manage their businesses over large geo- graphical areas, many utilities already have massive bandwidth at their disposal. In fact, they have enough to maintain the bandwidth they need for their day-to-day operations while monetising spare capacity, thus turn- ing a cost centre into a profit centre. If the equipment is flexible and versatile enough to handle the extra capacity, they can look to become either wholesale carriers (providing capacity to other carriers) or offer data connectivity services to enterprises. This extra reach and scale makes utilities perfectly suited for telecoms, both in the UK and globally. However, there are challenges utilities must address before a business case is made. While managing their networks and main- taining high availability for their business is a well understood process, utilities may not fully understand the business requirements and the service level agreements (SLA) asso- ciated with enterprise provision. To sell to enterprise customers, utilities must learn how to speak the language of the customer. Having the right level of technical expertise will ensure they are able to com- municate SLA requirements and why they are important. Failure to do this will make service differentiation almost impossible and will stop any organisation from rolling out a service that matches the needs of the customer. This involves combining the right technologies with a high-touch consultative approach to address all the key requirements for creating an intelligent network infra- structure. Strategic professional services that facilitate a practical, evolutionary moderni- sation of utility communications networks not only support an ever evolving range of applications, but also ensure these applica- tions are targeted at customer requirements. Making the right preparations Ensuring these obstacles have been addressed will determine the success of the utelco. Fundamentally, success depends on the company's ability to provide a commu- nications infrastructure that can segment off parts of its bandwidth without impacting day-to-day operations. Bringing in additional revenue is great, but if the set-up is incor- rect and the electric distribution network is impacted as a result, the initiative can back- fire. Flexibility and management visibility in controlling the networks is key. It is also essential all products have a managed service capability. For example, if a utility wants to pursue customers in media and entertainment, it must make sure its products address the pain points or the industry (low latency, low jitter). This will help to initiate a business conversation fol- lowed by a more technical conversation that positions the solution favourably. What does the future hold? In order to take part in the telecoms market, we are seeing increasing demand for utelco provision. In the UK, public interest in the profitability of utility companies continues to rise and, in order to avoid unwanted criti- cism over the money they make from energy services, further diversification and the building out of additional revenue streams will need to continue. The utelco case is compelling. Demand for on-demand, 24/7 connectivity and web-scale communications is higher than ever. The European cloud computing market is fore- cast to be worth £13.3 billion by the end of 2016. As a result, there will be no shortage of utilities looking to take advantage. However, in practice the rollout is less straightforward. Understanding the technical challenges of becoming a utelco and getting a good insight into potential customers' business objec- tives is not enough. Utilities need to under- stand chief information officers' motivations to better address the needs, challenges and nuances of their specific business. This will ensure that the utelco evolution is a smooth transition. Only practical, evolutionary modernisa- tion of utility communication networks will ensure the network ultimately becomes a powerful and strategic business asset. Duncan Ellis, Global Industry Insights, Ciena Telecoms is the right call Utilities can leverage their existing fibre optic networks by offering wholesale telecommunications services or offering connections direct to enterprises, says Duncan Ellis. SSE Enterprise Telecoms In the UK, Ciena has been supporting SSE with its utelco ambitions for many years though SSE Enterprise Telecoms. Today, SSE Enterprise Telecoms competes directly with major national telecoms operators through a network of more than 230 points of presence interconnected with over 65 data centres. SSE Enterprise Telecoms delivers services throughout the UK. In London, for example, the company has connected 21 of the most demanding data centres into a high- performance virtual Ethernet campus that enables customers to spread their servers and storage according to their application needs, and benefit from guaranteed seven-day provisioning lead times for inter-data centre connectivity. Some 500 miles north, in Aberdeen, a new SSE Enterprise Telecoms data centre operated by Brightsolid has enough bandwidth to service the city's oil and gas industry, and the involvement of offshore network operator Tampnet offers the potential to extend data centre services to offshore facilities in the North Sea.

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