Investing in Utilities – The Rapid Changes in the Utilities Markets
With the rapid pace of change that is going on with public and private utilities, investing in utilities has become somewhat of a risk. One of the biggest challenges facing anyone investing in utilities is the unpredictable rising costs of supplying utilities to customers. One of the best demonstrations of these cost changes is in the telecommunication industry. In the span of 10 to 15 years, the telecommunication industry has gone from copper wire, to fiber optic and then to wireless. It costs a significant amount of money to transition a communication network from copper to fiber optic and then there are further complications when you try to bring wireless networking to residential and commercial clients. These changes have sparked price increases which have created a market share battle among telecommunications companies.
There used to be a feeling that each area had one phone company, one gas company and one cable television company. Back in those days, investing in utilities was not nearly as complicated as it used to be. But new laws and regulations have force changes that have created competition in nearly every aspect of the utilities industry. Now investing in utilities requires a significant amount of research and understanding before you put your money anywhere. The complications are compounded when you have several utilities companies trying to sell services on one distribution network. All of those electric companies trying to sign up customers are using the one electrical distribution network that is in place. It is confusing to the customers and to the investors.
With the federal government investing in utilities and the strengthening of the American infrastructure, it brings in a whole new level of issues. Investing in utilities will now require an understanding of alternative energy and how that alternative energy is best delivered. The rebuilding of the American infrastructure can be a significant investment opportunity. But it can only make money for the investors that understand the potential of coming changes and know where to place their funds.
If you are going to be investing in utilities, then you will need to hire a few full-time utilities experts to keep a watch on the changes happening in the industry. Investing in utilities can be money well spent, but only if you are able to understand the trends that are starting to shape the future of utilities in the United States and around the entire world.