GLOBAL • TELECOMMS A study has been released by UBS Warburg and The Smith Consultants, on the market future for powerline telecommunications (PLT) systems.
The report is based on a study across six countries; UK, USA, Germany, Italy, France and Spain, and concludes that the potential for PLT has been overstated. A number of issues are raised that stand in the way of PLT archiving its widely billed promise of boosting low value utility stocks and disrupting existing telecommunications service provision. These obstacles include functionality issues, regulatory approvals and competition.
According to the report, the most useful aspects of the PLT technologies are unlikely to receive regulatory approval before 2001 or 2002, which equates to a significant delay given the current climate within the energy market. Furthermore, although the technology does work, the systems are likely to face a capacity ceiling in Europe which could impinge on its commercial appeal or limit its market penetration.
The other major impediment to the commercial success of PLT is competition from other existing technologies, such as xDSL, wireless local loop or cable. In the US, the report says, competition from cable probably makes PLT unviable while in Europe, regulatory delays and capacity restrictions may see PLT “miss the boat”.
However, the report follows another analysis from The Phillips Group within the Energy Competition Strategy Report that concludes telecommunications operations, rather than PLT, are an option for energy companies to add value.
