Operators need to discover new ways to make energy–telecoms bundles a success

Telecoms operators have started to express a renewed interest in the utility segment. They hope to generate a new source of revenue (beyond connectivity) and to increase their share of wallet among existing customers. However, they are unlikely to generate large direct profits by selling energy plans. They either need to explore innovative models or focus on how energy products can help their core business.

Telecoms operators find it difficult to offer better deals than energy suppliers because margins on energy services are low. As such, it has proven to be challenging for operators to upsell utility services to their customers; KDDI (in Japan) is one the few exceptions to this trend.

Churn reduction among a small share of existing telecoms customers is likely to be the main benefit of promoting telecoms bundles with energy services.