Telecom service providers have an untapped opportunity to lead smart city development efforts. By using their assets proactively and exploring new collaborations, service providers can become important strategic partners to industries and governments that drive smart city projects.
The smart city landscape
Telecommunications service providers help create information and communications technology (ICT) infrastructures that enable smart city environments. These infrastructures are vital to the objectives of industries that drive smart city projects.
Smart cities demand common open platforms and an ICT infrastructure that can support high-speed Internet access across wireline and wireless networks. This infrastructure requires 2 key components:
- An all-IP core network that can seamlessly integrate wireline and wireless technologies and create a converged infrastructure for buildings and ICT systems
- A broadband access network that can integrate systems through wireless, wireline, copper, fiber and other access technologies
Service providers can help make cities smarter by supporting machine-to-machine (M2M) and machine-to-machine-to-human (M2M2H) communications. They can also help by enabling advanced services and applications such as telecommunication coordination, urban traffic management, lighting and energy management, and access and security networks.
So why aren’t service providers playing a bigger role in smart city projects?
Getting smart about smart cities
In 2011, Alcatel-Lucent decided to explore how smart cities work and how service providers can contribute to them. The research project included 3 phases:
- An examination of the players, processes, vendors and service providers involved in 18 smart city projects.
- A deeper dive into 7 smart city projects. Contributors to these projects supplied information about the business, funding and engagement models that govern relationships between smart city project players.
- Identification of smart city categories and the motivations behind smart city projects.
Finding a role
Alcatel-Lucent research revealed that, in general, ICT is not perceived as a key component of smart city projects. Rather, it is seen as an enabler for a project’s initiators or objectives. ICT is seldom treated as a separate segment with a designated budget. It is typically grouped into other functional areas, such as transportation, energy saving or waste management.
It was also discovered that the role of ICT differs for each smart city project, mostly because there is no definitive way in which project stakeholders collaborate. Most often, governments initiate smart city projects, either alone or in cooperation with other partners. Private companies can also initiate, but they need support from governments or their affiliates.
In many smart city projects, the roles and relationships of stakeholders are difficult to pin down. Sometimes stakeholders play unexpected roles. For example, in Chattanooga Tennessee, one of the leading smart city projects in the United States, the Electrical Power Board has become an electric utility and communications company. It leverages a fiber optic infrastructure to supply fast 1-gigabit network capabilities to residents and businesses for “smart” energy and Internet/IPTV/telephony services.
What’s behind the smart city movement?
Each smart city project is driven by a variety of different motivators. Alcatel-Lucent research uncovered 3 main motivators for smart city projects:
- The economic motivator reflects the need to construct or invent a new economic model.
- The eco-sustainability motivator reflects the need or wish to reduce energy consumption.
- The social motivator reflects the need to improve the quality of life in a city environment.
These motivators are not mutually exclusive. Aspects of each play a role in all smart city projects. But every city emphasizes and values these motivators in different ways. Service providers have to position their ICT capabilities to be responsive to what and who is driving or implementing a given project.
Evaluating the opportunities
Despite the challenges and complications they present, smart cities offer viable business opportunities to service providers. But the fast-evolving smart city opportunity is not without risk. Service providers that jump in quickly may commit too much without realizing clear benefits. They need an engagement model that is strongly linked to a smart city strategy and based on a clear understanding of related ICT opportunities.
Some opportunities are better for service providers to pursue solely. Some call for cooperation with other players in the smart city ecosystem. Alcatel-Lucent research identified 4 basic types of smart city projects:
- IT box projects focus on IT excellence and are backed by private sector funding. Initiated and driven by IT companies, these projects are often the best fit with a service provider’s product and service offerings.
- Dream box projects aim to create turnkey smart cities. The business model for these projects involves a public–private partnership. Service providers can pursue these projects in cooperation with the companies and industries that are driving the project.
- Fragmented box projects include many independent and separate tasks that may not be part of a global smart city plan. Service providers must evaluate each project independently to understand its functional areas and develop the right approach.
- Black box projects are usually led and managed by governments and affiliated agencies. They operate as closed ecosystems. Service providers must typically be invited to participate.
Positioned for success
Service providers have unique assets that they can use to position themselves as the key ICT providers for smart city projects. Their most important asset is an ability to manage and deliver large volumes of data over protected, secure and reliable network infrastructures. These infrastructures are essential for enabling the many different visions of an ideal smart city.
Service providers also offer many other assets that extend their value beyond the network. These include:
- A network that provides high availability, quality of service (QoS), privacy and security
- Sophisticated authentication and billing capabilities that can be integrated across multiple bearer network types, including fixed, mobile and Wi-Fi®
- Mass-market customer care and self-service capabilities
- Consumer and commercial distribution and marketing channels
- Real-time customer insights into presence, location and usage
- Data center scale
- Technology expertise in networking, telecom and IT
These assets can help service providers strengthen their role in any smart city ecosystem. For example, they can seamlessly integrate a city’s service support systems within a single telecommunications infrastructure. They can deliver solutions that fit the objectives, needs and priorities of specific projects and stakeholders. And they can work with vendors and developers to support each city’s unique service and application development requirements. They can also act as a facilitator to bring the voice of the consumer and enterprise customers to city planners, government officials, and other stakeholders to deliver highly valued smart city services.
Enabling the vision
With strategies built around their strengths and assets, service providers can become prime players in smart city developments. This will allow them to become strategic partners to the industries and governments that drive smart city developments.
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