HomeInsightsThe telco's critical role in smart cities

    The telco’s critical role in smart cities


    Ahead of his participation in the Smart IoT Connect event, Dimitrios Spiliopoulos, IoT Sales Enablement, O2 (Telefónica UK), shares his insights on how telcos and cities can better work together.

    Where do the revenue opportunities lie for operators in smart cities?

    DS: It is becoming a necessity for almost every city to start exploring and then deploying smart city applications in order to solve some of their biggest problems. Of course, this means that operators can play a critical role in these projects.

    The revenue opportunities are plenty for operators and I would categorise them in three pillars:

    • Connectivity: Operators can collaborate with local councils and enterprises in order to improve connectivity where necessary and provide a full variety of networks such as 4G, wi-fi, fibre but also very soon 5G and the low power wide area networks (LPWAN) such as LTE-M and NB-IoT.

      Moreover, operators can help manufacturers of smart city devices to connect their products in a secure and reliable way, but also help them access the smart city market.

    • Data: Operators own huge amounts of data that could be useful for cities and enterprises. There are very few operators, like O2, that are able to analyse the data from the mobile network and other sources, anonymise it and aggregate it in order to help city stakeholders understand how citizens are moving, where and when.

      The insights from this data are really valuable and can be a great revenue stream for operators. The magic is when this data is combined with other sources such as IoT sensors and cameras.

    • Partnerships: Through strong partnerships, operators can provide end-to-end solutions to the cities and help them solve problems around transportation, healthcare, security, air pollution, utilities and more. The revenue models in this case are plenty and we have just started scratching the surface of this.

    Will 5G create even more opportunities and what might these be?

    DS: 5G is a very important enabler of a smart city and operators have started exploring the opportunities very seriously. 5G will help cities deploy applications that couldn’t be deployed before due to limited connectivity.

    If operators collaborate well with smart city solution providers to build end-to-end solutions and also help them access the cities, this can create significant revenues for operators.

    The main use cases that could be benefited by 5G in a city are transportation through autonomous vehicles (initially buses and trains), security through real-time video analytics as well as healthcare through remote healthcare and supporting elders.

    What are the challenges/obstacles to achieving a return on investment (ROI) in smart city projects?

    DS: We are just at the beginning of the smart cities vision so the challenges are plenty.

    Some of them are related to the unclear digital strategy and lack of digital talent from the public sector side.

    Other obstacles are related to the challenge of bringing many different stakeholders together to build consortiums that will be win-win for all parties.

    Some partners are looking for quick wins or using old solutions to new problems, which is not a recipe for a successful ROI. There are also some technical reasons too.

    Who should operators be collaborating with in smart cities to increase the success of projects and realise ROI?

    DS: Simply, with everyone. This means stakeholders from all the different parts of the smart city ecosystem, starting with the local authorities but also including universities and local companies (start-ups and enterprises).

    The engagement with the local players is key as they know the city’s challenges and they can bring solutions and benefits faster. In addition, operators shouldn’t forget the citizens.

    Together with the local authorities, it would be good to engage citizens from the beginning in order to receive feedback about what works well and what needs to change, as well as to understand which new ideas should be prioritised.

    We have started seeing these broad partnerships already in the UK and this is a very promising sign.

    How can revenue opportunities be accelerated for operators?

    DS: There are many ways, but I think by simplifying their offerings and making them easy and approachable for local authorities.

    This simplification is related to the language operators use when they speak about smart cities, but also related to the commercial models and the way they structure partnerships and contracts.

    If operators offer simple, clear and flexible solutions and contracts, it should be easier for the cities to make decisions and start new projects.

    Do you think cities have a good understanding of what operators can offer them beyond connectivity?

    DS: I am not sure, but I think it is difficult for anyone to know what operators can offer beyond connectivity.

    Operators are trying to reinvent themselves and as a result, they are slowly transforming to become digital services providers. But it isn’t always easy for cities to track and realise this.

    Closer collaboration and open dialogue could help bridge this gap.

    What do operators need from cities that they’re perhaps not getting now?

    DS: I feel that speed in terms of decision-making and deployments is something that operators and other smart city vendors are missing from the cities. If a project is discussed for years and at the end there is no decision at all, this doesn’t help the operators to justify investments of resources and time into the smart cities market.

    In addition, communication and collaboration between operators and cities could be improved so they can understand each other better.

    Do operators need to reinvent/restructure themselves in the digital economy to serve new markets such as smart cities?

    DS: Absolutely! In the digital economy, it is important not only for operators but for every company to re-invent themselves. This includes how we build digital solutions, how we collaborate with other companies, how we build our pricing and business models, and the kind of talent that we need.

    These are all questions that operators are working on while they try to serve existing markets and new ones such as smart cities.

    These are the views of Dimitrios Spiliopoulos and do not necessarily reflect those of O2.

    Smart IoT Connect takes place in London on September 10. Register now, free.