Telefónica signs €1.78bn deal with DECC

Telefónica has signed €1.78bn (£1.5bn) contract with the UK Department of Energy and Climate Change (DECC) to deliver smart meter communications services in the UK. The agreement will be valid till 15 years.

Under the agreement, the company will immediately start working with the Data Communications Company (Smart DCC Limited) and the other successful service providers to design, build and test the solution. Mass roll out of smart meters will commence during 2015.

"Telefónica UK has been awarded two out of the three communications service provider lots within the overall UK Smart Meter Implementation Programme (SMIP) tender. The initiative is the world's most ambitious smart meter roll out which will see over 53m smart meters installed across the UK by 2020. The £11bn programme is expected to deliver a net benefit to the UK of £6.7bn through reduced energy consumption and more efficient management and deployment of energy across the country. It is estimated that a smart meter enabled industry could save 2bn tonnes of CO2 a year in 2020," the company mentioned in its statement.

Telefónica UK will provide the communications infrastructure to connect smart meters in the central and southern regions of Great Britain.

"The Internet of things has the potential to transform society and we hope Telefónica Digital will be at the heart of this. Smart meters are a perfect example; they will become the foundation of a revolution in energy consumption and management, helping consumers and businesses to more efficiently manage their energy usage with significant economic and environmental benefits," said Matthew Key, chief executive of Telefónica Digital.

In addition, the company has successfully tested both technologies in relation to smart meters and already connects over 400,000 smart meters in Great Britain via cellular, while the mesh solution has been successfully implemented in over 650,000 households in the Nordics. Machine-to-Machine is a key focus area for Telefónica Digital, the division formed to drive Telefónica's transformation to becoming a digital telco