Global Tel­cos Bet Big on Smart City Plan

While cos like Eric­s­son & Huawei have al­ready started work­ing on some projects, oth­ers are in process of bid­ding for $50-b smart city projects

The Economic Times - - Companies: Pursuit Of Profit - Dan­ish.Khan@

timesin­ter­ New Delhi: Global ma­jors such as Eric­s­son, Nokia, Huawei and Cisco are bet­ting big on In­dia’s ‘smart cities’ project, which is es­ti­mated to be an up to $50 bil­lion (.`340,000 crore) busi­ness op­por­tu­nity over five years. Play­ers like Eric­s­son and Huawei have started work­ing on some of the projects in the country, while Nokia could soon bid for some projects. Cisco, on the other hand, is in­volved in more than 25 cities, in­clud­ing the govern­ment’s 20 of­fi­cial smart cities short­list. The govern­ment has de­fined a smart city in the In­dian con­text as one that pro­vides a de­cent qual­ity of life to its citizens, a clean and sus­tain­able en­vi­ron­ment, and sup­ports the ap­pli­ca­tion of smart so­lu­tions. It has short­listed 20 cities, in­clud­ing Pune, Jaipur, Su­rat, Kochi, Ahmed­bad, New Delhi, Chen­nai, Visakha­p­at­nam, Ludhiana and Bhopal, which will be de­vel­oped as smart cities.

The smart city mar­ket op­por­tu­nity in In­dia will be $45-50 bil­lion over the next five years, ac­cord­ing to a re­port by Sus­tain­abil­ity Out­look. The elec­tronic equip­ment busi­ness, just for the first phase, will be a $220-250 mil­lion op­por­tu­nity for th­ese ven­dors. For com­pa­nies like Cisco, which are largely look­ing at IT so­lu­tions, the op­por­tu­nity is pegged at around $25 mil­lion per city, ac­cord­ing to in­dus­try es­ti­mates. “The In­dian govern­ment’s vi­sion of a Smart Dig­i­tal In­dia is cre­at­ing enor­mous op­por­tu­ni­ties,” said Or­var Hur­tig, global head of in­dus­try and so­ci­ety at Eric­s­son. The com­pany has iden­ti­fied three key in­dus­try seg­ments — pub­lic safety, util­i­ties and trans­port — as its fo­cus ar­eas in the country. The Swedish com­pany has just won its first deal in In­dia in the util­i­ties space — to in­stall 15,000 smart me­ters in As­sam over the next three years for a pub­lic sec­tor power com­pany.

Eric­s­son, which ear­lier cre­ated a sep­a­rate ver­ti­cal called ‘in­dus­try & so­ci­ety’ to tap ‘Smart City’ and ‘Dig­i­tal In­dia’ op­por­tu­ni­ties, ex­pects up to 20% of its In­dia sales to come from this seg­ment by 2020. Sales from this seg­ment are neg­li­gi­ble now.

San­deep Giro­tra, Nokia’s head of In­dia mar­ket, said the com­pany is in talks with var­i­ous state govern­ments and the Cen­tre and may soon bid for some projects. “We be­lieve that there is no sin­gle ap­proach that fits all cities and each city can have mul­ti­ple driv­ers, there­fore, it is ab­so­lutely vi­tal to en­gage with state go- vernment, city ad­min­is­tra­tion and plan­ners to un­der­stand their ob­jec­tives and KPIs,” Giro­tra added. Cisco, which has worked on more than 120 smart cities glob­ally, is work­ing in 12-13 cities out of the list of 20. Be­sides, the com­pany has been work­ing in an­other 14-15 cities, ac­cord­ing to Pu­rushot­tam Kaushik, man­ag­ing di­rec­tor-sales at Cisco In­dia & Saarc.

“We are not just pro­vid­ing its so­lu­tions to the au­thor­i­ties, but also pro­vid­ing con­sul­tancy ser­vices,” Kaushik said. He added that Cisco is pro­vid­ing its net­work­ing, safety and se­cu­rity so­lu­tions, along with an ag­gre­gated IT plat­form where all apps can be writ­ten on top of it to col­lect data from var­i­ous de­vices.

Cisco ex­pects sig­nif­i­cant rev­enue gains to start flow­ing in two to three years. Chi­nese gear maker Huawei is also kick­ing off a num­ber of Smart City projects in col­lab­o­ra­tion with its part­ners like Tech Mahin­dra, tar­get­ing ar­eas like pub­lic safety.

“The smart city do­main, along with other govern­ment pro­grammes such as BharatNet of­fers huge op­por­tu­ni­ties to th­ese ven­dors,” said Ro­han Dhamija, part­ner and head for In­dia and South Asia at tele­com con­sult­ing firm Analysys Ma­son.

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