New business opportunities, improved internal communications, and energy information services: three solid reasons electric utilities should form a telecommunications strategy (if they haven't already). Yet, while these motivations are compelling, none really demands utility participation. The overwhelming impetus is the strategic advantage that telecommunications can bring to the utility's core energy business.
Imagine the shape of the electric industry in a completely deregulated environment. Electricity, the most homogenous of products, will find differentiation only in price. Transmission and distribution systems will be open to all entrants at the same fee, and host utilities will have no inherent advantage. Anyone with a communications link to the retail customer will be able to purchase electricity at wholesale rates and resell it. The cable TV company, the telephone company, the cellular phone company, and the carrier offering personal communication services would all be able to resell electricity. Moreover, the forces at work in efficient markets will invite competition from new entrants and technologies not yet on the radar screen.
A telecommunications strategy will enable an electric utility to gather important information about customer preference and choice. Customer-specific market research will offer the single most effective tool for managing price. An industry that institutionalized pricing by service class must now learn to de-average and excel at mass customization (em to sell a standardized commodity to mass markets with a customized approach. A communications path to the customer will permit utilities to collect primary market research, ultimately enabling them to develop targeted marketing programs that focus resources and energies on the most profitable market segments.