4G Communications Hub only exchange site visits: proposed methodology for calculating a centralised price

Details of outcome

In September 2025, Ofgem and the Department for Energy Security and Net Zero published a joint consultation on the proposed methodology for calculating a single value for a successful 4G Communications Hub only exchange site visit (the “Communications Hub Replacement Reimbursement Methodology”).

We also issued a request for information (RFI) to large energy suppliers and invited small energy suppliers and meter operators to respond voluntarily. Using this data, and applying the final methodology, we have calculated that the Reimbursement Amount for the period 1 April 2026 to 31 March 2027 will be £105.

Many of the responses we received contained commercially sensitive information that informed our final assessment. For this reason, we are not publishing individual responses to the consultation or the RFI.

This document sets out our final decision on the methodology, including the cost components, calculation approach, and annual review process. Following consideration of the feedback received, we have decided to proceed with the minded-to proposal.

Read the full outcome

Original consultation

Consultation description

Smart meters are essential to the energy market, empowering consumers with access to their consumption data, eliminating estimated billing, and enabling flexible energy use through smart tariffs. In December 2021, Mobile Network Operators confirmed their intention to switch off 2G and 3G mobile networks by 2033. These networks currently support communications for SMETS1 in all regions of Great Britain (England, Scotland and Wales) and for SMETS2 in the Central and South regions. These Communications Hubs must be upgraded to 4G to maintain smart meter functionality. For SMETS1, the Communications Hub and meter form a single physical unit, meaning both must be replaced together. In contrast, SMETS2 meters in the Central and South regions have a detachable Communications Hub, allowing for Communications Hub-only replacements without changing the meter.  

A funding gap was previously identified for Communications Hub-only replacements where meters are not being replaced. To address this, the Department for Energy Security and Net Zero (DESNZ) confirmed on 29 February 2024 that the Data Communications Company (DCC) will centrally fund site visits for 2G/3G Communications Hub-only swap-outs for SMETS2 in the Central and South regions. Energy suppliers will receive a single Reimbursement Amount for each successful site visit. This amount will be calculated using the Communications Hub Replacement Reimbursement Methodology, jointly developed by DESNZ and Ofgem, to ensure consistent and equitable cost recovery across the sector.

We are consulting on the proposed methodology to calculate this Reimbursement Amount.

Who should respond

We would like views from people and organisations with an interest in smart metering. We particularly welcome responses from energy suppliers. We would also welcome responses from other stakeholders and the public.