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Telefónica snags whopping £1.5bn contract to roll out smart energy meters across UK

Telefónica UK, the parent company of popular mobile network O2, has trumped rival provider Vodafone to secure the majority of a lucrative £2.8 billion government contract to furnish the technology behind 53 million smart energy meters due to roll out by 2020.

The contract itself, however, is set to run for 15 years and will see Telefónica rake in a cool £1.5 billion as the principle "communications service provider" behind the scheme, which is intended to help homes and small businesses better monitor and manage their utilities, specifically gas and electricity.

If the initiative goes according to plan, rollout of the meters will commence in 2014 and create an average savings of £25 per premise, per year as part of the government's wider strategy to cut energy usage across the UK.

Telefónica will be responsible for providing the necessary technology is the south and centre of Britain, while a consortium featuring privately-owned Arqiva, CAE Systems and BT has secured a £625 million contract to provide a similar service in the north.

In total, the government's heavily-touted smarter energy programme is thought to be worth around £11.7 billion.

"It is a huge endorsement of cellular as the right communications technology and of our vision for smart meters to be the foundation of a smarter energy future for the UK," commented David Plumb, digital director of Telefónica UK, in a statement.

The new smart meters will utilise SIM cards provided by the telecoms groups to provide real-time, two-way communications and allow data to be collected remotely rather than requiring inspectors to check usage.

It is thought that if the scheme proves effective at helping to cut gas and electricity consumption, it could be expanded to help manage other household functions over time.

Vodafone has gone on record as saying it is "disappointed" at having been spurned in its attempt to nab a slice of the government's green pie.