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Smart cities and the telecoms opportunity

With 55 per cent of the world’s population now living in urban areas, over three-quarters of cities around the world are already showing signs of fragility, such as inadequate infrastructure, rising inequality, housing, and environmental challenges. And making our cities smarter, more efficient, cleaner, and more productive is seen as one of the solutions to these challenges.

As a result BoAML predicts that the market for smart city technologies will grow from US$1 trillion today to US$1.3-1.6 trillion by 2020. The report highlights six entry points: (1) Smart Infrastructure; (2) Smart Buildings; (3) Smart Homes; (4) Smart Safety & Security; (5) Smart Energy; and (6) Smart Mobility.

According to BofAML, the growth of smart cities is being fuelled by a ‘perfect storm’ of disruptive technologies and social innovations, including ubiquitous broadband coverage (84% globally); next generation infrastructure (5G), IoT (10 billion predicted connected devices in cities by 2020), big data (200 million GB of data/day per 1 million people by 2020), the cloud, and artificial intelligence (AI).

Clearly, this represents a great opportunity for operators and service providers to create new revenue streams, and ensure that they are at the heart of smart city development, whether simply as suppliers of connectivity, or as developers of new applications and services.

5G offers an interesting example, with many industry watchers sceptical about its necessity, given the advances being made in 4G/LTE networks. However, according to Nokia CEO, Rajeev Suri, speaking at the recent MWC event in Barcelona, 5G will be key to unlocking the “fourth industrial revolution” involving artificial intelligence and smart cities.

Suri said: “I know that more than a few of you may wonder why we need 5G, wonder what is so different about it, wonder whether it will be worth the billions planned to be spent on it. My simple answer is yes. It is both worth it and it is also necessary.”

There are predicted to be 10 billion devices connected to the IoT by 2020, many of which will be sensors in everything from traffic lights to dustbins to vehicles and mobile devices. In order to unlock the potential of self-driving vehicles, remote healthcare, and smart transportation systems, 5G will be at the centre of myriad connectivity technologies that will be required, each optimised for different tasks, from high-volume, low bandwidth to mission-critical, low latency applications.

Already, London is at the forefront of 5G development, as promised by Mayor of London, Boris Johnson, back in 2014. Last month O2, in collaboration with Cisco, announced it would spend £80 million installing 1,400 small cells across Greater London by the end of 2017 in order to pave the way for the rapid deployment of 5G connectivity.

Likewise, in February, Arqiva, Samsung and Nokia announced that they would hold the UK’s first 5G trial in the centre of London within the next year. The 5G Innovation Centre (5GIC) at the University of Surrey, meanwhile, is the largest European research centre dedicated to the development of 5G, and considered to be a global innovation hub for telecoms and connectivity research.

Other cities around the UK are also already testing smart city applications, although not necessarily 5G. For example, both Cambridge and Milton Keynes are testing smart traffic lights, which give public transport priority at traffic lights, by enabling a ‘green light run’ through the city centre during busy periods.

No doubt there will be as yet unforeseen applications and services emerging as smart city innovation and investment develops and grows, and it is vital that operators and service providers ensure that they position themselves to take full advantage of smart city transformations, particularly those already emerging in their doorstep. To read our suggestions on how they might do this, follow our blog over the coming weeks.