The Impact of the Top 3 Strategic Imperatives on the Indian Smart Water Metering Solutions Industry

Transformative Megatrends

Why

• About 54% of India faces high or extreme water stress, according to the World Resources Institute (WRI). Rapid urbanization is set to exacerbate this water crisis further.

• Indian water utilities and urban local bodies (ULBs) are being tasked to implement solutions that optimize the use of water resources to avoid a Day Zero scenario.

Frost Perspective

• Frost & Sullivan estimates the smart water meter shipments to grow from 0.59 million units in 2023 to 1.92 million units in 2030.

• Demand for smart water meters is projected to increase the need for data analytics and customer engagement portals as state and central governments strive to monitor the outcomes of MaS of smart water metering projects to ensure cost recovery and efficient billing.

Disruptive Technologies

Why

• Indian water utilities are leapfrogging technology adoption through their ambitions goal to roll out smart meter water connections across the country.

• Most upcoming smart water meter tenders by Indian utilities specify the need for smart water meters, mainly for their accuracy and low maintenance, leading to demand for cost-effective static water meters.

• Indian utilities are also actively exploring data analytics solutions that support the reduction of non-revenue water (NRW) loss in pipes.

Frost Perspective

• New funding mechanisms are now embedded with the need for cost recovery, increasing the adoption of smart water meters. Frost forecasts a significant compound annual growth rate (CAGR) of 18.4% between 2023 and 2030.

• Revenue growth will be driven by water data management (MDM), customer information systems (CIS) billing, data analytics, and the consumer engagement portal (C2) is forecast to increase from $3.1 million in 2023 to $12.0 million in 2030.

Innovative Business Models

Why

• To mitigate the high costs, cities increasingly adopt the Metering-as-a-Service business model to implement the advanced metering infrastructure on a design, build, finance, operate, and transfer (DBFOT) basis.

• The approach enables the government to leverage private investment and expertise to reduce the risk of capex-based project implementation.

Frost Perspective

• Chennai Metropolitan Water and Sewerage Board (CMWSSB), the city of Chennai’s water utility, is implementing a smart metering project as a MaaS on a DBFOT basis over a 5-year period to reduce water losses and improve revenue collection.

• This is expected to set a precedent for the adoption of MaaS across all other major metropolitan Indian cities.

Industry Segmentation

Smart Water Meters

A smart water meter is a mechanical or static (ultrasonic or electromagnetic) water meter fitted with a communication module that can transmit data via a low-power wide area network (LPWAN). Automated meter reading (AMR) smart water meters allow one-way communication, i.e., between the meter and end user (utility operator), while Advanced Metering Infrastructure (AMI) smart water meters enable bidirectional communication, i.e., between the meter and end user (utility operator), and in this case, the end user can also transmit data (Shut-off instruction or OTA updates) back to the meter.

Network Solutions

Network solutions include hardware such as collectors, gateways, and base stations (in case of a private network) that enable data transmission from the meter to a head-end system (HES), network connectivity solutions, and services associated with the operation and maintenance of network connectivity – typically LPWAN or radio frequency (RF) mesh.

Meter Data Management (MDM) & Customer Information System (CIS) Billing

MDM

MDM is a software solution that helps utilities manage and sort data collected from the HES. This data is used for billing (meter to cash), meter and network asset management, and other alarm management, and other activities. MDM also consists of APIs for seamless transmission of meter data to a third-party application.

CIS Billing

CIS billing software helps utilities generate accurate bills and organize customer data for efficient customer service.

Customer Engagement Portal (CEP) & Data Analytics

CEP platforms and solutions enable utilities to help customers visualize near real-time consumption data, track and analyze consumption patterns, and communicate critical messages such as water conservation tips and important alerts. CEP solutions also allow utilities to monitor and detect leaks, assist in asset management, and improve operational efficiency.

Project Management (Consultants and System Integrators)

Consultants or system integrators deliver smart water metering project management solutions. These typically involve assisting utility customers in the design, implementation, and execution of a smart water metering project. It could also involve assisting utilities in procuring smart water metering solutions. This could sometimes involve end-to-end implementation and execution of smart water metering projects, excluding design.

Scope of Analysis

A unit (in unit shipments) represents a water meter fitted with a smart communication module. The total revenue is calculated by considering the Capex and Opex involved in a smart water metering value chain.

Competitive Environment

Key Competitors in the Smart Metering Value Chain

• KRANTI

• Kritsnam Technologies

• Kamstrup

• Xylem Sensus

• Itron

• Axiom Metering

• Hannbit

• Reliance Jio

• Kerlink

• Bharat Airtel

• Vodafone Idea

• Tata Communications

• DropByDrop

• Smarterra

• Suez

• Pinnacle Infosys

• Aqyerium

Key Competitors in the Smart Metering Value Chain

• Cranberry Analytics

• Arad Group

• Karlot

• AECOM

• Cheta Control System

• SPML

• L&T

• Flowtech

• Neona

• SSTPL

• Kathari Water (Smarter Homes and WeGoT)

• Trilliant

• Swachh Environment

• Bove Technologies

• GLOBALm

• Peltek

• Genus Power

• Steady Taps

Growth Drivers

India continues to invest in ensuring 24/7 water supply coverage in all urban centers to meet the UN Sustainability Development Goals (SDGs) by 2030. Government schemes and funding to implement 24/7 water supply projects include AMRUT 2.0 and state-level urban water supply policies and schemes.

The shift from project implementation KPIs to outcomes or performance-based KPIs by central and state-level agencies has led to the standard inclusion of water metering in water supply projects to ensure cost recovery, improve collection efficiency, and promote equitable water supply service provision.

Water stress and scarcity have increased the demand for water meters to improve water conservation and reduce water loss. The trend is most apparent in southern Indian states, which are relatively more vulnerable to water stress and scarcity, especially during the non-monsoon seasons. There is a strong focus on reducing NRW holistically to improve water availability.

Water utilities and ULBs are exploring and implementing solutions to become self-sufficient and less dependent on asset improvement and management subsidies. They employ universal water metering as a starting point to improve the asset’s overall economic sustainability.

Growth Restraints

• The country lacks a cohesive universal water metering policy and skilled human resources to execute water metering projects.

• Implementing a smart water metering project involves high total expenditure (TOTEX). There are risks associated with extended project deadlines, political interventions, and heavy reliance on subsidies or funding for smart water metering projects.

• End users/utility customers have an ill-conceived notion that installing water meters will increase water tariffs, primarily when implemented using a PPP model.
• Adequate baseline data on the number of water connections and types of end customers (e.g., domestic/commercial/industrial end users) are absent, limiting the areas in a city receiving metered 24/7 water supply services.
• Insufficient knowledge and awareness among key decision-makers of the benefits of water metering and the need to reduce NRW loss could hinder the growth of smart water meters.

Revenue and Unit Shipment Forecast

Smart Water Metering: Revenue and Unit Shipment/Volume Forecast, India, 2022?2030

Revenue CAGR, 2023?2030 = 18.9%
Unit Shipment CAGR, 2023?2030 = 18.4%