An increase in smart meter deployments will see the global market for wireless communication modules about double in value from US$532 million in 2012 to US$1.3 billion in 2020, at a compound annual growth rate (CAGR) of 12%, according to research and consulting firm GlobalData. North America, currently the dominant player in the global wireless communication modules market for smart meters, will be a key driver behind the leap, with its own market revenue expected to climb steadily from US$379 million in 2012 to US$433.7 million in 2020.
Europe will also continue to account for a considerable share of the global market, thanks to a significant number of pilot-scale projects getting underway across the region. The uptake of wireless communication modules in the UK, Denmark and Ireland in particular looks promising, according to GlobalData, and these countries are predicted to occupy an even larger share of Europe’s wireless smart meter communication market by the end of 2020.
Cellular and Radio Frequency (RF) communication modules are the two key technologies used in smart meters for two-way data transmission. RF modules account for an 85% share of the North American market, thanks to their low cost, high bandwidth and efficient performance in industrial areas.
Ginni Hima Bindu, GlobalData’s analyst covering smart grid, says, “The preference for wireless communication modules over wired technology is also owed to their incredibly secured network, and as a result, we expect to see an increased take-up of wireless technology for smart meter deployments across North America, the UK and Japan, which will continue to drive the market over the forecast period.”
However, while the outlook for the wireless communication modules market is largely positive, a number of challenges remain that will prevent any further growth in global revenue. “The problem of coverage is one of the major restraints of the market for cellular communication modules,” Bindu says. “For an indoor electric meter, GPRS technology provides just 80% – 85% coverage, if the electric meter, or other grid device, is not moved accordingly. Furthermore, the high operating costs that must be paid by the utilities to mobile carriers is also off-putting. For example, in the UK, Baringa Partners estimated a US$7.4 charge per household for a once-a-day, off-peak meter reading each year – a charge that increased even more during peak times. While the cost of the cellular service in North America has been lowered to US$5, this is still relatively high when compared with RF mesh technology, for which the operating cost is nil,” the analyst concludes.