Smart cities in China offer $153 billion opportunity to telecom and tech companies

Telecom Lead Asia: China’s build-out of smart cities
offers $153 billion opportunity across 54 projects. Big winners from this
investment activity in the next five years will be telecom providers and
infrastructure suppliers. Ericsson, IBM and Cisco have enjoyed early access to
China’s market but their future is cloudy due to expected Chinese demand for
reciprocity and government concerns about information security.


For prospective foreign participants in China’s smart
city growth, opportunities still exist. However, care is needed to navigate
China’s increasing sensitivity about information security while still
leveraging the ability to introduce advanced technologies and systems
integration experience,” said Zhuo Zhang, author of the research report.


From 2011 to 2015, Lux Research estimates the investment
on data transmission at $96 billion, or more than 60 percent of the total


Among the 54 real projects, 35 are scoped at city level
in some of the country’s largest and most crowded cities, including Beijing and
Shanghai and account for $76.2 billion, nearly half the total investment.
Seventeen projects are at the sub-city level and two at the city cluster level,
according to Lux Research.


The report says that city cluster projects have the
highest average project investment but are hindered by the weak ability of lower
tier cities to manage large projects. In contrast, sub-city projects are, on
average, more investment intensive because of the leading cities’ higher GDP
and the resulting stronger ability to make large investments.


Managing smart cities is emerging as a big business
opportunity for telecom and technology companies in India. Companies such as
ZTE and IBM are looking at big opportunities in the Indian smart city market.
Smart cities are already undergoing several changes to grow faster. For
instance, Pune has become the first city in India to appoint a CIO, Anupam Saraph.


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