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Open water market following energy model, say commentators
Further mergers and acquisitions among water retailers are “inevitable”, Business Stream chief executive Jo Dow has predicted.
Speaking to Utility Week, she said: “Even if you look at the early switching statistics that MOSL has published, there are a number of retailers who are losing more customers than they’re winning.
“There are an awful lot of players in the market just now, and if you look to the energy market, you can only imagine that there will be more consolidation. It will definitely happen, I just don’t know how quickly.”
A number of high-profile mergers and exits which occurred before the market opened prompted some commentators to speculate about the creation of a “water big six”.
Rupert Redesdale – acting chief executive of new entrant The Water Retail Company – told Utility Week at the time that the water market could quickly consolidate, following the path of the energy sector.
There are currently 22 companies licensed by Ofwat to provide water supply and sewerage retail services in the open market – fewer than some had predicted.
Of these, the largest six retailers are led by Water Plus, created via a joint venture between Severn Trent and Untiied Utilities.
The second largest player is Scottish new entrant Castle Water, which snapped up the business-bases of exiting Portsmouth Water and Thames Water before the market opened.
The third largest player now looks set to be Anglian and Northumbrian Water’s joint venture – Wave – announced in March this year. This is subject to its regulatory approval.
Business Stream follows Wave as the fourth largest player. It bought Southern Water’s business customer book in 2016 to boost its English customer base. It has also partnered market peer Veolia Water, and signed a multi-utility deal with broker Utilitywise in order to expand its offerings. The retailer is outspoken about its focus on growth.
Completing the top six water retailers list is Source for Business, which is the trading name of Pennon Water Services, itself a combination of South West Water and Bournemouth Water. Source for Business also recemtly joined forces with South Staffordshire Group – the parent company of South Staffordshire Water and Cambridge Water.
Read Utility Week’s analysis on the “water big six” here
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