The Role of Telcos in deployment of Smart Cities

Smart city is a concept which has come to realization and now it is part of mainstream discussion. Smart city employs Information and Communication Technologies (ICT) to use resources efficiently and intelligently providing cost and energy savings, improved quality of life, and uses technology as its backbone. Telcos would play a vital role in the development of smart cities infrastructure. The fundamental objective of smart cities is to add intelligence to the city infrastructure, to its people, buildings, environments roads, water, energy and other domains of city. Therefore, Telcos are the key to its success. An illustration of IoT devices connected through cellular network in a cellular environment is shown in figure 1.

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Telco already have the networks and some of the ICT platforms for smart cities. Moreover they know how to implement and extend both of these assets and turn them into services. In this way, they can convert ICT Capital Expenditure (CAPEX) into Operational Expenditure (OPEX) for the city, as a result mitigating the high upfront cost which is one of the major key barriers to smart city investment. Telcos can deliver essential smart city platforms of sensor and actual networks, big data collection, mediation and analysis and delivery, device management, business intelligence, rating and charging to any or all of the application domains. They are delivering “smart city as-a-service” or more accurately “smart city infrastructure as-a-service”.

It has been observed that the Telco infrastructure around the globe is not synchronizing with the demand for smart infrastructure. Therefore, to achieve social and economic benefits for people and cities they live in; initiatives have been taken, known as ‘municipality’ broadband. In most countries this is initiated or at least supported by the telecom companies. However, in other places due to lack of this cooperation such as USA, is leading the cities to take their own communication infrastructure initiatives.

One of the vital and significant problems faced by Telcos is the traditional business models used by them within the traditional Telco market. They are accustomed to doing this on their own and their version of cooperation often goes along their way. Along with this the cost structure of the traditional Telcos is also such that often the smart city solutions they offer are simply unaffordable.

When the internet, smart phones, social media and other new cutting-edge technologies arrived the Telcos failed to take opportunities that these technologies offered because they were busier in protecting their old business model than embracing the new ones. With smart cities similar opportunities have arisen, but the real question is: will the Telcos be able to move faster this time? If they don’t grab the opportunity this time, Google, Apple, Facebook and Amazon of this world now have a significantly higher market value than any of the traditional telecom players. Therefore, the real questions that need consideration from Telcos is, will the Telcos be able to, in time move up the value chain this time, beyond simply offering access?

Telcos should use these opportunities to use their ICT services in a horizontal way, serve various verticals that operate within a city. ICT is an essential component for smart cities but it needs to be used on a cross-sector sharing basis. This will definitely decrease costs and at the same time offer greater value, especially if linked to IoT/M2M. In this direction, big data can be processed and analyzed in order to offer a whole range of intelligence services back to the people in the city and to organizations that are involved in managing the various aspects of the city. Telcos can monetize this and extract extra value from such activities.

Telcos can also create sub-networks, as part of their national infrastructure but with the capability of offering municipality-focused virtual network along with some smart apps and services through a smart city dashboard. This should be based on a collaborative platform where the council, regulators, stakeholders as well as range of other businesses, can participate. Telcos can create a central control system for the city, be it on a Build, Own and Operate (BOO), Build, Own and Maintain (BOM) or Build, Operate and Transfer (BOT) business model.

A cooperative model like this will then offer holistic solutions, rather than the present silo-based. For Telcos to become successful by adopting this model, they need to amend their conventional business model and build new ones which should focus on generating potential revenue streams through establishing across these offerings.

In smart city technology, city should not b taken literally. As a matter of fact, it is often easier to launch smart city building in smaller communities. Telcos should become lead partners in establishing these collaborative, open innovation and technology. It should provide a platform in which government, stakeholders and Telcos should collaborate such as in Netherland, where the national Telco KPN, along with electricity company Aliander are lead partners in such a platform. This type of collaboration model can be considered as a partnership between companies, governments, knowledge institutions and the people of the city which are embracing the smart city concept. An illustration of IBM cloud based IoT platform for designing smart city vertical solutions is shown in figure 2.

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The essential steps for the deployment of smart cities infrastructure include: (i) Leadership and vision; (ii) Creation of smart council; (iii) Engagement with stake holders; (iv) Continuous community engagement and (v) Projects.

While we concentrate on communities and cities, the same processes would also be required to create smart businesses, smart buildings, smart grid and alliance can be used by entities other than cities.

The Internet-of-Things and M2M are going to be real game-changers. They will revolutionize every single sector of society and the economy. Telcos should create new business models so that LTE and later on 5G will take leadership role in the development of M2M. These developments are closely linked to big data, data analytics, cloud computing, data centers and all these elements play a vital role in the success of smart city infrastructure.

For further information about Smart City Infrastructure, deployment and operation you can attend the training course for Smart City Essentials here.