Looking back a decade from now, 2011 may well be the year our understanding of the realities of smart grid investments by American utilities got real. The hype, the speculation, and the initial super high growth patterns are now behind us. The industry, including those of us in telecom, is settling into what will still be spectacular growth horizons and opportunity aplenty as the nation works to make its power grid more intelligent.

In a Research Bulletin just published, IC Insights, Inc. estimates a startling doubling of smart grid investment between 2011 and 2015. The firm sees annual investments in smart grid reaching just under $200 billion four years from now. 

"IC Insights estimates that the total global spending on smart grid technologies will reach about $100 billion in 2011, and those annual investments are forecast to nearly double to $196.9 billion in 2015," wrote Senior Market Researcher Rob Lineback of the firm. 

"These annual figures," continued Linebacker, "exclude renewable energy systems, power plants, and 'smart' home appliances, but cover the smart grid infrastructure, electrical storage systems, smart meters, and information technology investments." 

The report by IC Insights highlights the role of smart grid innovations in the development of the "smart home" - intelligent residential networks. "New 'smart' household systems and home area networks (HANs) are being equipped with advanced metering infrastructure (AMI) interfaces to the power grid's smart meters. With these interfaces, home appliances and other residential systems will have the ability to automatically schedule and adjust their operations and energy use based on variable electricity rates and the preferences of owners," according to the IC Insights report. 

As with the growth of broadband, smart grid development here in the United States mirrors global patterns. This factor enables both industry-wide efficiency of scale and scope and innovative business models to develop simultaneously.

Leading market research firm Frost & Sullivan also sees heady global growth in smart grid capital spending. While focused on a smaller group of spending categories - AMI, demand response, distribution grid management, and high-voltage transmission systems - than is in the IC Insights report, the future for the sector looks no less bright.

"The global smart grid market [will] grow from $23.9 billion in 2010 to $125.15 billion in 2017, at a remarkable compound annual growth rate of 26.6 percent," is how the firm summarizes its recent findings.

We see continued opportunity for the telecom carriers, other service providers, and equipment manufacturers in what we think are optimistic, although not at all unrealistic, estimates of continued investment in smart grid deployments.

The TelPlexus Team will be attending more than 30 association meetings, conventions and industry trade shows in 2012, and, as always, we would enjoy meeting you at any of these events. Tell us about what you are doing, what's on your mind and what you're focused on for 2012.

The 10 shows we'll be attending in 2012's first quarter are listed above right.

Give us a call or send us an email to set up an appointment to meet us. Our Business Development Director, Mark West, usually can't cook his prize winning barbeque while on the road, but he will buy you lunch. Call 1-901-488-7787 or email info@telplexus.net. 

The Fiber-to-the-Home (FTTH) Council recently named telecommunications executive Heather Burnett Gold as its new full-time President. Gold, with nearly three decades of telecom experience, most recently served as Senior Vice President of External Affairs for XO Communications, where she guided the $1.5 billion company's regulatory and public policy strategy. 

Her previous experience include President for the Association for Local Telecommunications Services, founding principal of The KDW Group, a telecom consulting firm, and Vice President of Industry Affairs for Intermedia Communications.  She was recently honored by the Washington Business Journal as one of 2010 Women Who Mean Business.

"We are delighted that an accomplished telecom pro will be leading the FTTH Council into its next phase of growth and success, and helping us guide America toward its all-fiber future," said J. Michael Hill, president and CEO of On Trac, Inc. and chairman of the board.  "Heather's impressive business skills and policy experience will be an enormous asset to our organization."

For us at TelPlexus, attending the Council's FTTH Conference & Expo is always one of the trade show highlights of the year. In 2012 the event will be held September 23 - 27 in Dallas.

Now in its tenth year, the Fiber-to-the-Home (FTTH) Council is a nonprofit of companies and organizations that deliver video, internet and/or voice services over high-bandwidth, next-generation, direct fiber optic connections, as well as those involved in planning and building FTTH networks.  TelPlexus is proud to be an Associate Member of the Council.

Multiple analysts' reports continue to point to a clear broadband trend as 2011 comes to a close. Globally, and in the U.S., cable television multiple system operators (MSOs) continue to outpace operating telephone companies in the number of new broadband subscribers.

With multiple quarters in a row of such net additions reported, cable has now solidified its position as the clear leader in broadband subscriber counts.

Remember that phrase: net addition.  It is critical to an understanding of why the cable guys continue to beat the telephone companies in broadband revenue units. The telcos keep losing customers for their DSL-delivered broadband services, despite the positive broadband customer additions on FTTx networks.

In his broadband market research report for the third quarter of 2011, Bruce Leichtman writes "AT&T and Verizon added 642,000 fiber subscribers in the quarter (via U-verse and FiOS), while having a net loss of 619,000 subscribers." 

Leichtman, President of New Hampshire's Leichtman Research Group overall "found that the eighteen largest cable and telephone providers in the US - representing about 93% of the market - acquired about 635,000 net additional high-speed Internet subscribers in the third quarter of 2011. These top broadband providers now account for 77.8 million subscribers - with cable companies having 43.6 million broadband subscribers, and telephone companies having 34.5 million subscribers."

The worldwide cable vs. telco numbers mirror the domestic view here in the United States.  In the words of global telecoms research firm TeleGeography, the cable sector passed a "key subscriber milestone" in 2Q of 2011. "In aggregate," said the firm in a research note of this September, "cablecos now have over 100 million broadband subscribers (and over 65 million voice subscribers) on their networks."

"Cablecos' broadband and voice subscriber wins at the expense of telcos far outnumber their pay-TV subscriber losses due to IPTV, and ARPUs for both broadband and voice are more than double that of IPTV," said TeleGeography analyst John Dinsdale.

"There are differences by region, but globally, cablecos' expansion into telecoms' markets has had a transformational impact on their growth and financial performance, while the impact of IPTV for telcos has been only marginal," concluded Dinsdale.