Powerline Update

2002 Update on the Powerline Industry

Market Developments

Business Models

We have Powerline technology, even third generation systems, we have a better understanding of the regulatory landscape, but how can we make a business with Powerline?

A sort of “food chain” has established where Powerline technology chipset vendors deliver to system packagers or integrators, who market to a range of customers, utility network operator based ISPs, telecommunications companies, even private customers for in-house systems.

The combination of access and in-house applications with the diverse information applications provides a rich option space for business models. Business models are indeed the most important concept. If a company wants to enter the Powerline business, they need a business model first and foremost.

The Power Utility

For companies who come from the electrical utility sector, this may represent a significant first hurdle. The companies do not have the necessary expertise inside their own organization. Their culture, their way of thinking is different from that of a Telecommunications Company or ISP. Commercial viability depends on the skill and dedication of the future operator to embrace the necessary change process.

A PLC operator business must be developed; that requires the application of BUSINESS DEVELOPMENT. Business Models will lead to a Business Plan, which in turn will lead to the Business. The uncertainty has actually increased for operator candidates, because of the lack of required skills.

The accepted practice is that a Business Consultant accompanies the Operator Candidate for analysis, goal formation, and establishment of a suitable business model and elaboration of business plan. Business Development is an essential tool to bring about the necessary adjustments. That process does take time, a year at least in our experience. There are only a few companies that managed that transition, over the past year.

Sydkraft - One example is Sydkraft, from Malmö, Sweden. It set out about two-years ago, built up an organisation that could deal with the issues, employed Business Development methods and are very successful in becoming a Powerline operator company.

The learning process should not be underestimated. It may be necessary to secure outside help, as a rule, because the professional expertise is rarely at hand. With the regulatory smoke clearing a bit, one large company after the other is entering the field.

RWE - In Germany, RWE wants to deploy 10,000 units in 2001.

EVN - In Austria, EVN is also talking about 10,000 end customers connected in 2001.