Cities are the engines of economic growth, but with growing populations they face important challenges – many of which can be addressed through ICT and digital technologies. With this in mind, a new report from Pyramid Research has concluded that, “At a fundamental level, the smart city is an important and attractive opportunity for network operators.”.
The researchers note that, “By their nature, smart city projects are complex, long term and unique with many stakeholders and a variety of priorities and business models.”
There is also strong competition from global and local vendors, they find. Another issue identified by the Smart Cities: A Challenging but Attractive Opportunity for Network Operators report is that smart city growth is often not continuous and network operators need to carefully consider potential growth across their footprint, combined with their positioning in the different markets where they are present.
However, there is good news because network operators are well positioned for the growth of M2M and IoT, which are the basis for many smart city services such as transport-related, surveillance/ security and smart metering.
Look before you leap
Pyramid advises, “Prior to allocating significant resources, operators need to both see a significant emphasis by governments on smart city investment and be sure they are positioned to take advantage.”
In most countries, they found, there is no significant central government involvement, and city projects tend to move forward only when funding is made available locally, with only limited market potential. The most common approach is for operators to address various verticals that are attractive in themselves on a nationwide basis, but can also form part of a broader smart city project.
The researchers say, “Pyramid does not believe that the option of investing into dedicated smart city resources is viable for most operators, and rather recommends focusing on M2M and IoT services (and networks) which lowers risk and leaves smart city opportunities open.”