Proving the Business Case for the Internet of Things

Eltel buys U-Serv to expand in German smart meter market

Steve Rogerson
May 3, 2016
 
Finland-based Eltel’s power distribution business is acquiring German metering service company U-Serv.
 
U-Serv operates in the electricity and gas metering sector in Germany. Eltel has a strong market position in the smart metering sector of the Nordics with more than five million meter installations including a new order backlog of 1.6 million installations.
 
This acquisition is now expanding Eltel’s footprint to cover the German market. U-Serv’s strong and rapidly growing local presence in combination with Eltel’s international competence in smart meter rollouts offers potential for further growth.
 
“Eltel has been preparing an entry in the German smart metering market for some time,” said Juha Luusua, president of Eltel’s power distribution. “After careful analysis and negotiations, we are happy to finalise this process with the acquisition of German U-Serv.”
 
U-Serv is one of the major meter service companies in Germany with net sales of approximately €9m and approximately 50 permanent employees and an ability to mobilise more than 1000 more when needed. The product offering of U-Serv comprises national electrical meter read-outs, customer self-readings, replacements and gas adjustments.
 
U-Serv’s installations in gas applications offer Eltel an opportunity to grow the smart metering business. U-Serv is a growing company with a customer base of several dozens of utilities including some of the major power distribution operators in Germany. This customer base offers future opportunities for Eltel to expand its wider service offering for distribution operators.
 
Further, Eltel has agreed to acquire field service assets of EVB Billing und Services, a subsidiary of Germany-based ATV Energie. The assets comprise EVB’s customer base in metering related field services and an offer to the personnel to transfer to Eltel.
 
The existing business development agreement between U-Serv and ATV Energie will be transferred to Eltel. Through this agreement, ATV, EVB and Eltel will collaborate to expand the business for smart metering services in Germany. ATV and EVB will participate in pre-sales customer meetings, sales negotiations and general promotion of Eltel services in power distribution in Germany. ATV and EVB have a knowledge of and good access to the German utility sector.
 
“With the experience and current position of U-Serv, combined with the collaboration agreements with the business development partners ATV and EVB, we strongly believe that we have a winning team in place,” said Luusua. “We welcome the employees of U-Serv and the field service team of EVB to Eltel to build a smarter German energy system together.”
 
The European market will continue to offer significant future potential within smart meter rollouts. The national time schedules for implementing smart metering within the EU vary. While some of the countries having already completed the projects, others are starting implementations or have only initiated pilot projects. In Germany, new legislation, Digitale Energiewende, is scheduled for completion in May 2016 to oblige utilities to deploy intelligent meter systems from 2017 to 2032.
 
Tendering for major smart metering projects is expected to start in 2016. In Germany the total amount of electricity meter is around 43 million. Another growth opportunity is provided in the gas metering market.
 
The acquisition of U-Serv and the asset deal with ATV are expected to be closed during this month.
 
Eltel has operations throughout the Nordic and Baltic regions, Poland, Germany, UK and Africa. In 2015, its net sales amounted to €1255m. The current number of employees is approximately 9600.