Driving Innovation Through Smart Cities

World Telecommunication and Information Society Day 2015

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Setting the Perspective

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Shifts in the urban markets due to megatrends is driving change across all dimensions of daily life

Demographic shifts

Economic power shifts

Accelerating urbanization

Aging workforce and need for retraining

Shifts in housing demand, changes in city services needed (i.e. mobility)

Design feature changes (i.e. curb height)

Shift in ethnic/cultural balance

Increased demand for investment strains resources

Rise of “city states”

Public vs. Private investment transition

Increasing challenges to governance

Emergence of new consumers in cities

Emerging cities become exporters of talent and capital on south-south axis

Developed cities need to identify new sources of growth

Infrastructure needs changing (i.e. more flooding events)

Shortages in water, food resources

Changing public health issues (i.e. heat, disease)

Land uses adapt to rising sea levels and changing needs

Improved “user experience”

Increased opportunities for economic growth

Growth in safety, sustainability, and efficiency

Climate change

Technological breakthroughs

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Accelerating urbanisation is Impacting Cities Abilities to Deliver

Demands from citizens are increasing while there are fewer resources Demands from citizens are increasing while there are fewer resources

Today, there are 457 cities greater than 1 million population(1)

(1) World Atlas, 2014

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Innovation can no longer be considered a purely technological endeavor

Administrative Innovation

Technical Innovation

Operational Innovation

Commercial Innovation

Other Areas of Innovation

• Privacy, Legal Evidence • Capacity Building, of stakeholders • Ensuring right Systems Integrator

• Right choice of Architecture • Planned Solutions • Analytics and Integration

• Non-planned city infrastructure • Availability of Right Manpower • False Alarms

• High capital and recurring cost • High TCO and ROI not very

quantifiable

• Collaborative Engagement • Expectation Management

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Right Stakeholder

Suitable Approach

Smart Programs

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Smart Mauritius

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Definitions for Smart Cities Continue to Emerge

A smart sustainable city is an innovative city that uses information and communication technologies (ICTs) and other means to improve quality of life, efficiency of urban operation and services, and competitiveness, while ensuring that it meets the needs of present and future generations with respect to economic, social and environmental aspects".

Foundational: Audit, Taxation, Regulations, Analytics Shared Infra: Municipal Network, Integration Platform, Network/Cyber Security, Sensors, Devices, Utility Tunnels, Shared Poles/Ducts/Conduits, Rights-of-Way, Utility Notification Centre

Transport

Liveability

Safety

City Gateway

ICT Economic Character

Utilities

WARNING 24 HOUR

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Government

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Technology Innovation

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Innovative Digital Services (G2C, G2B, G2G)

Urban Platform (Open multi vendor integration)

Instrumented (Connectivity, Sensors)

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Partner Ecosystem for Smart Cities Implementation

Smart City Agency (Government/Private Sector/SPV)

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Citizen advocacy

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A robust and scalable ICT platform leveraging current and planned assets is needed to facilitate technology innovation

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Operations support Operations support

Monitoring Monitoring

Incident management Incident management

Capacity management Capacity management

Configuration Management Configuration Management

Help Desk Help Desk

Change Management Change Management Customer Service Customer Service

Certifications Certifications Billing Billing

City Agency Support City Agency Support Asset

Licensing Asset

Licensing Asset Management Asset Management

API Management

API Management

Dash-boarding Dash-boarding Membership Management Membership Management

Reporting & Analytics Reporting & Analytics

Sensor Management Sensor Management

Ticket Management Ticket Management

Service enablement Service enablement

Payment Gateway Payment Gateway

WAP WAP

Mail Mail

MMS MMS SMS SMS

Service Catalogue Service Catalogue

API/Web Services API/Web Services

Content Management Content Management Proximity Detection Proximity Detection

API Architecture

API Architecture

Electronic Medical Records

Electronic Medical Records

GPS Tracking GPS Tracking

Home Energy Management Home Energy Management

Intelligence Engine Intelligence Engine

Medical Info Library Medical Info Library

Search Search

Smart Metering Smart Metering Traffic Mgmt Platform Traffic Mgmt Platform

Hosting

Network LTE/4G LTE/4G City Broadband City Broadband Telecom Providers Telecom Providers Open Wi-Fi Open Wi-Fi Wireless Mesh Wireless Mesh GSM GSM

Data Centers Data Centers Cloud Cloud Servers Servers Integration Platform Integration Platform

UI Hosting UI Hosting Portals Portals Document

Management Document

Management

Data Hosting Data Hosting

Video Video Internet Internet Internet

of Things Internet

of Things

Asset Licensing Asset Licensing

Cloud Storage Cloud Storage

E-Learning Platform E-Learning Platform

Sensors Sensors Proximity Detection Proximity Detection

Smart Power Grid Smart Power Grid

Fixed & Portable Hotspots

Fixed & Portable Hotspots

Security HW Security HW Security SW Security SW Security LDAP LDAP Identity Management Identity Management Information Security Information Security Provisioning Provisioning

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User access devices User access devices Digital Signage Digital Signage Wearable Devices Wearable Devices Mobile Phones Mobile Phones Tablet/eReaders Tablet/eReaders Computers/Laptops Computers/Laptops Display Screens Display Screens

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Ecosystem Orchestrator

Interconnector

The network operator is emerging as a central player in the smart city value chain and as a result, has the opportunity to pursue multiple value streams

Manage the interface with city governments to understand objectives, impact metrics, and prospective smart city service opportunities as well as address policy and funding requirements

Manage relationships with real estate developers and identify opportunities for smart services targeted to the needs of their customer base including but not limited to industrial clusters

Manage the relationship with vertical sector services providers (e.g. utilities) as both go-to-market partners for smart services and prospective clients for smart value added services

Work with technology partners to define the value proposition, assess service feasibility, and plan the go-to market approach

Evaluate various communications technologies including but not limited to 3G, LTE, M2M and fixed IP in order to effectively deliver services to users and aggregate smart services data

Define and drive adoption of standard QoS-enabled connectivity configurations for each smart service based on user data consumption needs and smart services analytics requirements

Define clear and standard QoS-enabled and fully resilient fixed connectivity requirements to the City Command & Control Center and to vertical sector enterprise partners and clients (e.g. utilities, health care providers, waste management, parking management, etc.)

Services Innovator Collaborate with vertical sector enterprise partners and technology partners on definition of

smart services paradigms and outline prototyping and rollout priorities Collaborate with city governments to define the portfolio of smart services to be included in the

smart city roadmap and the opportunity to synergize analytics from these services to maximize actionable insights for the city.

Identify opportunities to develop digital applications to market and package smart services for consumers and embed the ability to collect data in order to generate insights for the city

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Customer Interface

The network operator is emerging as a central player in the smart city value chain and as a result, has the opportunity to pursue multiple value streams

Data Aggregator

Leverage retail stores and customer support centers as channels for promoting and supporting smart city services

Serve as channel for user feedback – Partner with city government and vertical sector smart services providers on solution for collecting citizens feedback on service quality to be used in order to prioritize smart services improvement.

Collect data generated by smart services applications, location services and machine-to-machine applications, such as connected vehicles or sensors, etc.

Work with vertical sector partners and city governments stakeholders to aggregate data from the sources and others

Conduct analytics studies to generate insights from collected data and empower city governments and vertical sector partners/clients to make city-level and service level smart services improvements decisions

System Integrator & Operator

Define and drive adoption of resilient collocation centers to house the smart city Command & Control Center (CCC) or to host value added services for vertical sector partners/clients

Manage the implementation of CCC computing and data infrastructure including city managed systems and cloud based systems used by vertical sector partner and the smart application development community

Manage the implementation of network and information security solutions and policies. Define and manage the implementation of smart analytics and insights platforms Operate the CCC and select adjacent smart services infrastructure components

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Developed by the Land Transport Authority (LTA) of Singapore, MyTransport.SG provides information and eServices for all land transport users, be it commuters, motorists or cyclists

Provides tools for users, such as interactive maps, real time data on road traffic and bus arrival timings for all bus stops, real-time variable toll rates, and real-time parking availability

Representative global smart services deployments

Urban real-time data

Qualcomm has partnered with InStrat Global Health Solutions, Etisalat Nigeria, and the Nigeria health department to develop a wireless electronic medical record system for clinics

KEPCO Rolled-out Nuri's AMI Solution to its 180,000 C&I Customers throughout South Korea

AiMiR AMI allowed KEPCO to define pricing policies based on time interval usage. It also enabled real-time monitoring of electricity usage and notification of abnormal activity so that corrective action can be taken to maintain service quality and avoid costly electricity losses

AT&T provides a Remote Patient Monitoring (RPM) solution that utilizes connected devices to collect physiological data from sick or at-risk individuals outside of the clinical environment, and share that data with a designated clinician or caregiver

Verizon allows its customers to remotely adjust thermostat settings, lock or unlock doors, and turn on or off lights and appliances from any computer or mobile device

Verizon also partnered with Belkin to rollout devices allowing remote home monitoring and the ability to remotely switch appliances on or off to manage energy consumption as well as security

KEPCO, South Korea

CliniPAK360 project

Smart Healthcare

Smart Metering

MOBILE LIVING

Connected Home

Smart Healthcare

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Commercial Innovation

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Revenue Predictability Vs Sufficiency – Is the Nation Prepared?

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Revenue Predictability

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Revenue Sufficiency

Revenue Predictability Revenue Sufficiency

Water Water Power Power Gas Gas

Solid Waste

Solid Waste

Mobility Projects

Mobility Projects

Mobility Management

Mobility Management

Illustrative Illustrative As an illustration – Water involves high Capex, the predictability of Revenue is high but the user charges are not sufficient to cover even the Operating Expenses. Hence for water both Capex and Opex grants are needed.

Institutional & social infra

Institutional & social infra

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Pay-for-performance contracts where the private partner identifies and recommends efficiencies that can be paid for through the savings realized.

Instance Performance contracts usually involve a private-public partnership where the private sector works with the public sector to implement a new more efficient or more sustainable technology.

Funds The owner gets the immediate advantage of savings from reduced consumption without making a capital investmentor assuming debt.

Example Multiple examples across cities where LED based smart street lighting allows ~30% savings in energy costs

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Value Capture is the identification and capture of increased land value from resulting public investment in infrastructure

Instance Improving transport system impacts and accessibility is a benefit to neighboring properties. This benefit is the increase in higher land values and, perhaps, an increase in business for property owners.

Funds

Beneficiaries should pay for receiving benefits through the city’s choice of assessment, which could be an imposition of public transit impact fees, land-value taxation or capture of property tax increments

Example

The Dulles Corridor Metrorail project, the Silver Line, is funded by special assessments on commercial and multi-family residential property and increased toll charges. The first phase of the Silver Line opened in 2013 costing Fairfax County $400 million.

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User fees impose fees to cover cost associated with funding services and enhancements to increase the quality of life.

Instance As an option and not a tax - Paying a toll to drive in express lanes. Taxes, on the other hand, are compulsory and support government operations across the board.

Funds The attractive thing about user fees is that they can be used to secure financing to fund all or parts of large capital projects.

Example

In 2009, the city of Toronto experienced a $500 million budget deficit. Convenience fee of paying a parking ticket by phone or online- increased by 50 cents, Changes to tax accounts increase by $15 , Increase of 3.7% in city-run programs and renting a city-run facility brought in $396.3 million

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Developer Dedication requirements are commonly found in city and town ordinances as part of the land use and zoning regulations for new development.

Instance Option and not a tax: Paying a toll to drive in highway express lanes. Taxes, on the other hand, are compulsory and support government operations across the board.

Funds

City’s existing residents should not subsidize developers who bring in new residents. Rather, the additional infrastructure costs demanded by the new subdivision should fall to the developer and its new residents.

Example

Douglas County, Colorado requires all adjacent roads around a new development be paid for by the developer. In addition, the county requires the dedication of park space (or cash-in-lieu) at a rate that achieves the county’s goal of 15 acres/1000 population

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A Case Study for Technical Assistance: RE.Invest

Purpose

18-month predevelopment process with eight US cities and teams of

leading private sector design, engineering, law, and finance experts.

Primary Partners: Bechtel Corporation (engineering); Akin Gump

Strauss Hauer & Feld, LLP (legal); Wall Street Without Walls

(finance); Rockefeller Foundation.

Results

Results are projects made possible using a new framework

for reimagining civic infrastructure systems to create both

public value and private investment opportunities, especially

for vulnerable communities.

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Other Examples

Eurasian City used World Expo as an intermediary milestone and is

leveraging funding for Expo to meet smart city objectives

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Indian City is having a private operator invest in surveillance in-lieu of NOC/ROW

and will lease surveillance equipment back to city police department

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Regional health exchange funded in part by payers (insurance agencies)

that see a constant surge in costs

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Hardware usage and software license costs that billed on a pay per use and paid

over extended periods

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Smart Initiatives

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Findings are based on a PwC survey conducted in 64 cities comprising a total population of over 120 million people from around the world .

Key Enablers and Barriers

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Thank you

© 2015 PricewaterhouseCoopers Private Limited. All rights reserved. In this document, “PwC” refers to PricewaterhouseCoopers Private Limited (a limited

liability company in India), which is a member firm of PricewaterhouseCoopers International Limited (PwCIL), each member firm of which is a separate legal

entity.

Jean-Pierre Young Partner Direct: +230 404 5028 Mobile: +230 57 28 6918 Jean-pierre.young@mu.pwc.com Biju Kadapurath Associate Director PricewaterhouseCoopers Pvt. Ltd. Mobile: +91 7093804471 biju.kadapurath@in.pwc.com

Vikas Sharma Senior Manager Direct: +230 4045015 Mobile: +230 54973395 v.sharma@mu.pwc.com

Diya Guttoo Manager Direct: +230 4045014 Mobile: +230 57976990 Diya.guttoo@mu.pwc.com