The Spanish operator won two out of three lots, in a deal worth £1.5 billion over 15 years, with infrastructure provider Arqiva also securing an allocation.
The contract will see Telefónica, owner of the UK’s O2, provide homes in Britain with a meter to monitor and control electricity and gas usage.
The smart meters will use real-time, two-way communications technology, allowing data to be collected remotely rather than physically, and are designed to reduce power consumption as part of a longer term strategy for sustainable energy.
SIM cards, provided by telecoms groups, will be installed in the meters to enable coordination between the devices, and it is hoped these can be used to control other household functions and utilities in the future.
David Plumb, digital director of Telefónica, said: “It is a huge endorsement of cellular as the right communications technology, and of our vision for smart meters to be the foundation of a smarter energy future for the UK.”
Telefónica will cover the south and central region of the country as part of the agreement, and the northern region and Scotland will be covered by Arqiva.
The government has reportedly estimated savings of around £25 per household per year by 2020, and a widespread roll-out is expected to begin in late 2014.
The deal is still to be officially finalised and Plumb said: “We are working with the DECC (Department of Energy and Climate Change) on next steps and will be making a further announcement in due course.”
Earlier this month, Telefónica UK announced a launch date for 4G services in the country through its mobile unit, O2.
