The government has announced its preferred bidders to build the UK's smart metering shared infrastructure for utility services.
The mass roll-out of smart meters will start in late 2015 and be finished by the end of 2020, said the government.
The government says that over the next 20 years the installation of smart meters will provide around £6.5 billion in net benefits to the UK. It claims the roll-out programme will cost £12.1 billion and provide £18.6 billion in benefits.
The initial costs will be absorbed by the taxpayer, as the utility companies refused to pay the smart meter roll-out bill, despite the perceived benefits for customers and suppliers, like better energy management and less energy waste to help reduce carbon emissions.
Customers have also been promised lower bills through the use of smart meters, notwithstanding the continuing spiralling costs of energy.
A Data and Communications Company (DCC) will be responsible for linking 53 million smart electricity and gas meters in homes and small businesses with the business systems of energy suppliers, network operators and energy service companies.
Capita has been selected as the successful applicant for the DCC Licence. The DCC Licensee will manage the smart metering service of its users and will contract with and manage the data and communications service providers.
The estimated value of the licence over 12 years is approximately £175 million.
CGI IT has been selected as the preferred bidder for a Data Service Provider contract, which will develop and operate the system controlling the movement of messages to and from smart meters.
CGI will now be invited to form a contract with the DCC Licensee. The estimated value of this contract over eight years is around £75 million.
Arqiva has been chosen as the preferred bidder for the Communications Service Provider contract for the North region (north of England and Scotland), and will provide wide area communications to and from the smart meters.
Arqiva will also now be invited to form a contract with the DCC Licensee. The estimated value of this contract over 15 years is around £625 million.
In addition, Telefónica UK has been selected as the preferred bidder for the Communications Service Provider contracts for the Centre (Midlands, East Anglia and Wales) and South (south of England) regions.
Telefónica will also be expected to form contracts with the DCC. The estimated value for the two regional contracts over 15 years is approximately £1.5 billion.
Gemserv has been selected as the preferred bidder for the Smart Energy Code Administrator and Secretariat contract, which will maintain and update the industry code governing the use of smart meters across the energy industry.
Gemserv will now be invited to form a contract with the Smart Energy Code Company. The estimated value of this contract is approximately £10 million over four years, the government said.