In August, we reported on Brazil’s decision to switch from a universal smart metering mandate to more of an optional model requiring utilities to give smart meters only to new buildings and customers who asked for them.

Now we’ve got a forecast on just what the new mandate will mean for smart meter deployments in the country, and it isn’t pretty. According to the new report from Innovation Observatory, Brazil’s meter deployment will add up to about 27 million meters between now and 2030, placing it 11th on its list of top smart-metering countries.

That’s a big drop from the 65 million smart meters by 2020 that were forecast under the old, universal scheme. For companies such as Itron, Landis+Gyr, Elster, Echelon, Sensus, Silver Spring Networks, Trilliant and General Electric that have been investing in what they thought was going to be a Brazilian bonanza, the news was disheartening, to say the least.

Indeed, prior to the August decision Brazil Electricity Regulation Agency (ANEEL) to make smart meter deployment voluntary for existing customers, Brazil ranked fourth on the list of countries with the biggest smart meter plans, behind China, the U.S. and India. Now it’s behind Japan, Russia, Germany, France, UK, Spain and Turkey as well.

We’ve already seen other forecasts on Brazil’s reduced smart meter expectation, and how it impacts the country’s broader smart grid goals. Bloomberg predicted the new rules will drive about $670 million per year in smart meter projects, with about 4.5 million deployed between 2014 and 2017. Northeast Group reduced its 2012-2022 country smart grid market forecast to $27.7 billion, down from an original $36.6 billion, as a result of ANEEL’s decision. The figure shows both a marked reduction for the metering side of Brazil’s plans, as well as plenty of spending on other smart grid imperatives that haven’t necessarily been affected by the smart meter decision.

Indeed, smart grid vendors have plenty of work ahead in beefing up Brazil’s power sector, which faces high levels of energy theft and reliability problems, as well as pressure to bring host cities up to world-class standards for the 2014 World Cup and 2016 Summer Olympics. Rio de Janeiro, Brazilia, Sao Paolo and other major cities are deploying smart meters today, and utilities are also working on broader smart grid networking projects that span the country’s rural territories as well.