Monday 25 July 2016

Will other utilities follow Thames Water’s business retail exit?

Thames Water's exit from the non-domestic retail water market could be the first of many.

Fredrick Royan, Research Director at Frost & Sullivan believes other utilities are likely to follow suit.

Thames Water announced it will be leaving the non-domestic retail market - which includes billing and customer management - when it opens to 1.2 million businesses and public sector organisations in April 2017 to concentrate on the domestic market, which could open in 2020.

Mr Royan told ELN: "Existing water utilities will now look to the household market as their main focus. Domestic customers are easier as their needs are homogeneous and the actual volume of water consumption is actually often higher than some business segments, meaning they are profitable.

"In contrast, providing the necessary on-site services in the non-domestic market can stretch the resources of water utilities and this doesn't play to the strengths of these companies as they are currently structured."

He suggests facility management firms would move into the non-domestic water market as they could incorporate water supply into their existing services relatively easily, providing a 'one stop shop' for properties like offices or shopping centres.