Sector Analysis

Utilities

Utilities’ investments are controlled through 5-8 year regulatory periods.

All utilities have their business plans approved by the independent regulators that are focused on ensuring that utility networks are resilient and sustainable.

The total outsourced utilities spend c. £10bn p.a. with service companies on delivery, maintenance and enhancement of assets and services.

Utilities Sectors MGS
Total Market Share
MGS Revenue Utilities explained Regulator Regulatory Period
Water Sector 20% £300m Operating water and waste water infrastructure support to provision and distribution across the sector OFWAT 2015-2020 / 2015-2021 (Scotland)
Gas Sector 20% £150m Operates in transmission and distribution of gas across the UK network OFGEM 2013-2021
Electricity 15% £130m Facilitating support of transmission and distribution of electricity across the UK OFGEM 2015-2023
Transport

Airports, railways and highways require continuous third-party maintenance and enhancement which equates to an outsourced total of £15bn p.a in third party spend.

The independent regulators set investment targets for key industry players to ensure transport networks are reliable, have enough capacity and provide good customer services.

Transport Market Sectors MGS Revenue Transport Companies explained Regulator Regulatory Period Last Reg Period Spend
Total Market
Airports £40m CAA regulates investments and monitors performance for all aviation activates in the UK including Heathrow and Gatwick due to the airports perceived market power CAA 2014-2019 £6.5bn
Rail £50m Rail and Underground operators including Network Rail and TFL: ORR determines funding and spending plans of respective natural monopolies ORR 2014-2019 £58.3bn
Highways £40m Road maintenance and replacement spend is driven by safety requirements, historical underinvestment, increasing passenger demand and technological changes ORR 2014-2019 £15bn
Data

Leading provider of data and metering services to essential utilities.

  • Leading provider of data and metering services to utilities sectors
  • Operates under multi-year framework agreements
  • Energy and water suppliers face increasing challenges to collect and manage data related to customer consumption
  • Data retrieval and processing total outsourced spend with third parties amounts to c. £1bn p.a
  • Expenditure is tightly regulated to ensure timely and correct client billing
Data Market Sectors MGS Market Share Telecom explained Regulator Regulatory Period
Data Retrieval 65% Utilities data collection across the UK and Ireland OFGEM & OFWAT Ongoing Regulatory Process - No specific cycles
Data Processing & Analytics 15% Data flow management and flow services OFGEM & OFWAT Ongoing Regulatory Process - No specific cycles
Technical services and other support services - Support for new entrants, Protect my Property and M Assessment Services, Meter Maintenance and Installation Services OFGEM & OFWAT Ongoing Regulatory Process - No specific cycles
Telecom

Fixed and mobile telecommunications infrastructure requires a total outsourced spend of more than £4bn p.a. with service companies to build, install, maintain, manage and support networks.

Ofcom is the communications regulator in the UK regulating the TV, radio and video-on-demand sectors, fixed-line telecom (phones), mobiles and postal services, plus the airwaves over which wireless devices operate.

Accountable to Parliament, they set and enforce regulatory rules for the sectors for which we have responsibility. They also have powers to enforce competition law in those sectors, alongside the Competition and Markets Authority.

Reg Telecom Market Sectors MGS Revenue
Regulated Telecom Companies explained Regulator Regulatory Period
Passive infrastructure £130m Build, repair, renew, refurbish and maintain
the infrastructure and assets from the exchange to the customer premise
OFCOM Ongoing regulatory process- no specific cycles
Active infrastructure £10m Design, installation and commissioning of network equipment across complete networks
OFCOM Ongoing regulatory process- no specific cycles
Managed Services & Other £10m 24 by 7 specialist service offering covering network management, monitoring and maintenance together with technical support services
OFCOM Ongoing regulatory process- no specific cycles