Telecoms target revenue from smart city investments

smart city project
Indian telecom network operators  are in the process of identifying new revenue streams by making investment in smart city initiatives of the country.

The smart city essentially centers on the technology playing the role of the basic infrastructure leading to useful interconnection of all available resources, technology, community services, and events surrounding an individual.

More Need for Smart Cities with Population Increase

Most technologists and engineers are busy investigating how to build smart cities, and calculating on the features to be included in them. Every week, more than 1 million population is moving into cities universally. By the end of 2015, more than half of the world’s population lived in cities, according to the CIA Factbook, following a 2 percent increase in the urban population every year from 2010 and 2015. Smart city solution importance is increasing as nearly 70 percent of the global population will live in an urban environment by 2050.

It has been observed that across Africa, developing Asia and Latin America, cities are tending to become densely populated, congested and polluted. In May 2016, the World Health Organization (WHO) warned that more than 80 percent of people in urban areas around the world are exposed to dangerous levels of air pollution, leading to 3 million premature deaths every year and a massive pressure is being put on all transportation and communication medium. When urbanization reaches 50 percent to 70 percent, social problems arising from overcrowding also tend to increase. Due to this, in recent years, the idea of a smart city has also begun to include sustainability along-with ideas to reduce carbon emissions.

Modified smart cities focus on bringing investment to business districts and urban neighborhoods, by adding smart features such as e-waste recycling, e-rickshaws, smart water meters and more to existing infrastructure. This is not a move which favors every aspect of the population and creates uneven geographic development.

Smart City: Policies and Approaches

The benefits to smart city solutions are substantial. Smart meters can manage and control demand as cities face increasing strain on resources and distribution infrastructures due to rapid urbanization. They also cut operational costs by reducing the required number of on-site meter readings. Smart street lighting allows operators to dim them when appropriate, extending their usage and reducing operating expenses. And smart bins help trash collectors optimize their routes and keep cities clean.

Policies that will allow us to closely measure our progress, reflect on short-term setbacks and create a comprehensive database of smart cities for the future are essential to bring up smart cities. Many such policies already exist at an international level.

Challenges posed

The main challenges underlying in the implementation of the smart city include the digital divide that is, the social and economic inequalities which come about as a result non uniform access to communication technology, and the way of its application. Awareness about smart solutions will also play an integral part in developing smart citizens. Apart from substantial investments by local authorities in smart solutions, efforts to raise citizen awareness on the efficient usage of these solutions and services is also a crucial step.

The participation of citizens in policy-making has become significant to the smart city implementation and is also comparatively simpler through online Government portals.

Role of Telecom

Apart from all these factors, the prominent base to a smart city project will be the underlying communication technology. In-spite of efficient communications networks existing in a city with their own fiber networks, or dense networks of sensors, connectivity is still posing to be a challenge for smart city innovation. The connections between sensors and the core communications infrastructure should be modified into application-specific basis, or on multiple application support basis.

Networking Solutions

Numerous solutions suggested are low-power, wide-area network (LP-WAN) IoT network services, cellular operator’s data network service, satellite data services, existing fixed network, new wireless mesh networks or narrow-band radio networks, or a new fixed network with wireless gateways. Mobile operators using 2G and 3G cellular networks to support M2M connections, which were primarily designed to connect mobile phones, these existing networks aren’t well suited to serving the emerging IoT market, which increasingly requires dedicated networks.

If a smart city is implemented with collection of IoT applications, there will be a need for high capacity communication networks to carry out the same. This will lead to an opening in opportunities for both network equipment manufacturers and telecommunications service providers, with several branches available to market for those companies. A cellular network may deliver appropriate connectivity for every smart city application on its own, alongside satisfying many requirements, especially for smaller smart cities that might not be able to contemplate building new infrastructure and will prefer managed service provision at the network layer.

Also emerging narrowband IoT (NB-IoT) networks and partnerships between competing IoT LP-WAN providers can enable a network in meeting the terms of smart city implementation.

The global network analytics market is forecast to grow at a CAGR of 25.68 percent during the period 2016-2020. It has been estimated that the US mobile workforce was more than 50 million, which was 38.46 percent of the global mobile workforce in 2015 and will grow at a CAGR of 14.87 percent by 2020. The global mobile workforce was approximately 1.3 billion in 2015 and will reach approximately 1.64 billion by 2020.

Revenue and Investments

Many MNOs are in lieu of exploring IoT services that will help to maintain, or even increase, spend from existing customers. Operators should also try to identify IoT services that they can supply and add value to, so they will generate useful ARPUs for them.

ABI Research forecasts global smart meter revenue will top $13 billion in 2021. The number of smart bins will increase from roughly 70,000 in 2015 to almost one million in 2021. And while smart street lighting solutions barely scratched their market potential, they will grow to reach 78 million shipments by 2021.


Network Function Virtualization (NFV) and Software-Defined Networking (SDN) have also brought the network operators to a better position due to which the networks can be capable to deliver network services which meet specific requirements. New commercial models for service delivery will be required for the same.

Benefit to the authorities

As the ideas around smart cities emerge, city authorities will become more knowledgeable about the choice of communications available to them and may even lead to building and owning networks, while also keeping cultural and business factors in mind. Also given that the internet is a global network, an international manifesto is required to prioritize human rights, social justice and rights to privacy in both physical and digital life.

Wireless connectivity will capture the lion’s share of new smart street lighting deployments, but power line communication (PLC) solutions are unlikely to disappear in the foreseeable future. Most smart street solutions will be hybrid, incorporating wireless and PLC nodes to maximize reach with Echelon, Silver Spring Networks, and Paradox Engineering.

Smart Cities in India

In India also smart city initiatives are under process with the top 20 smart cities ready for the next stage of implementation. Citizen participation as the major success factor in implementing the smart solutions in a city, with most developed cities ensuring that their citizens participate in every aspect from cleaning to safety requirements. The use of innovative information and communications technology (ICT) applications, smartphones and smart fixtures have all been started to be implemented with examples being the Swachh Bharat Clean Indiamobile app,, Safecity India, and Kumbhathon.

With the recent announcements made by the NDA government highlighting the vision of 100 smart cities within the current fiscal year, and a Rs 7,060 crore budget allocated for the same. M2M communications are capable of making things readable, recognizable, locatable, addressable and controllable via the Internet. The data collected by the mesh of connected devices and M2M technologies can lead to smart governance.

Smartphones and mobility devices will lead to the IoT movement with BlackBerry and QNX investing in developing solutions that connect and support the IoT, including embedded platforms, networks and devices, are at the core of QNX offerings. With QNX, BlackBerry is well poised to move beyond mobile computing, playing a leading role in the Internet of Things.

A minimum of Rs 2,000 crore is estimated to flow into the technology sector for backing up the smart cities initiative. This will create new opportunities for telecom providers, infrastructure vendors, application providers and the entire IoT ecosystem in general. Telecoms will have an increased play in the sector with the application ecosystem providing a smart interface to use technology and encourage new innovations, which will result in an integrated platform providing seamless communication.

By 2023, the smart city technology market is expected to be worth more than $27 billion annually with a diverse range of suppliers participating in multiple industry verticals. Ericsson was among the first global vendors to explore potential opportunities for applying smart metering, public safety and remote health monitoring services in India.

Many telecom solution providers like Cisco and IBM have also been showcasing how connected systems of education, health care, smart buildings, transport and smart parking can transform the way communities are designed to ensure economic, social and environmental sustainability.

Among telecom operators, Bharti Airtel is currently operating with three electricity boards in the country on smart metering solutions. In addition, it recently collaborated with the Odisha State Road Transport Corporation to deploy a satellite-based vehicle tracking system and fuel monitoring system for the organization. Russia-based Sistema is planning to develop smart cities in India along the lines of projects it has implemented in its home country.

Vina Krishnan
[email protected]