Cleantech Market Intelligence
Telcos Aggressively Expanding Smart City Services
Among the essential building blocks for the smart cities market are communication networks that connect the sensors, controllers, cameras, and other hardware infrastructure capturing valuable data from the city environment. The need for urban connectivity is creating new opportunities for the telcos responsible for providing public wired or wireless communication services to government, consumers, and businesses. Telcos are increasingly making strategic acquisitions and extending their footprint into solutions and services for smart cities and Internet of Thing (IoT) application areas. Whether through established technology such as 3G/4G or potential disruptors like 5G and narrowband-IoT (NB-IoT), cellular providers are aiming to become the leading suppliers of connectivity for smart cities.
Significant Acquisitions and Service Offerings in North America
In recent years, a number of telcos have made bold expansions into the smart cities market. Verizon, for example, has been working to expand its presence in that industry. It made a major move to extend its footprint with the acquisition of smart street lighting and sensor network provider Sensity Systems in late 2016. Verizon is supporting a wide range of smart city applications, including transportation, public safety, city management, and smart buildings.
AT&T has also significantly increased its visibility in the market since its initial smart cities launch in 2015—notably through its role in the Atlanta and San Diego IoT platform deployment projects. It is supplying Bluetooth and Wi-Fi for short-range connectivity, plus fiber and LTE for backhaul to the cloud.
In early 2017, AT&T obtained exclusive rights to distribute the sensor nodes from Current powered by GE through a reseller agreement in the US and Mexico. AT&T will be the commercial lead on future smart cities projects, with Current as its technology provider.
Significant Global Acquisitions and Offerings
Telefónica, the Spanish-based global telecom provider, has also been targeting smart city opportunities. It was lead commercial partner in the SmartSantander project, which involved deployment of over 20,000 devices in Santander and the surrounding area (including sensors, repeaters, gateways, etc.).
French carrier and service provider Orange is leveraging its expertise in 4G, fiber, LoRa, Wi-Fi, and Bluetooth to install a network of connected sensors for Romania’s Alba Lulia Smart City 2018 project. Telefónica and Orange Group are key players in the development of FIWARE standards—an open source initiative that aims to establish a standard for smart cities based on the FIWARE platform.
Most recently, Telestra, an Australian telecom company, acquired fleet management systems provider MTData and created a partnership with Melbourne-based Smart Parking. The company has already won contracts to install Smart Parking’s sensors in five Australian council regions.
Telco Expansion Challenges Non-Cellular Connectivity Providers
The aggressive telco expansion into the smart cities market should serve as a warning shot to other providers of urban connectivity such as RF mesh and Wi-Fi players. These providers should quickly move to protect market share by emphasizing their relative advantages over cellular (e.g., private networks, lower operating costs) and developing more vertical solution partnerships and connectivity capabilities.
While most cities are likely to have multiple providers and types of connectivity for different use cases, cellular providers are making a clear push to capture the high bandwidth segment of the smart city communication networks value chain. There is evidence that resistance to public cellular is declining in the utility sector. With the deployment of new cellular technologies such as NB-IoT and 5G on the horizon, the same is likely true for cities.