Water Plus expects ‘strong competition’ in new market

EXCLUSIVE: Water Plus expects “strong competition” from both new entrant and incumbent water companies in the market when it opens in April next year.

“I think it’ll be a tough market,” said chief executive Sue Amies-King. “I think it’ll be interesting, and I’m expecting strong competition by some new entrants and certainly some of the incumbents.”

In an interview with Utility Week, she said that all companies “have the opportunity to be disruptive” in a new market. Some of this disruptive behaviour will be deliberate and some will be unintentional because a company may not truly understand their costs.

“Therefore you see some disruptive pricing that is not sustainable in the long-term,” she said. “I can see that causing some interesting challenges in the market.”

She also flagged up the importance of brokers in the water market when it opens. “I think brokers will agitate for switching,” she said. “The level of intermediation you see in energy – more than 80 per cent – you will start to see that develop in water. That in itself will generate switching behaviour and awareness, particularly energy brokers who are moving into water.”

“I do see it being quite an active sector,” she added.

In the same interview, Amies-King said she expected “quite a bit” of consolidation between water companies once the retail market opens. She also said energy companies are likely to be more interested now that domestic competition has been mooted.

Read the full interview with Sue Amies-King online here and in the issue of 25 November.