BY FILIPPO PEDRETTI
Japan’s major regional utilities, the EPCOs, possess millions of households and corporate customers that pay every month. This relatively captive audience is being tapped into and monetized by the EPCOs to offer commercial activities not related to energy.
By selling those customers banking, telecommunications, real estate and other services, the utilities aim to boost earnings that are less capital-intensive than power generation. Such services also give customers more reasons to stay with their existing energy provider.
Several EPCOs, such as Chubu Electric and Kansai Electric (KEPCO), have taken the lead in monetizing customer bases. Revenues from these additional services can sometimes account for as much as 8% of total annual profits.
Still, there’s no guarantee of success. Going head-to-head with more established national competitors, such as leading telecom corporations and financial institutions, is a major challenge. Those competitors have specialist brand recognition, plus a deep reserve of qualified talent. How much added value lies in the utility’s custom network?