A new report from Kaleido Intelligence, a leading connectivity market intelligence and consulting firm, has found that smart cities’ data usage will increase by over 140% between 2023 and 2027.
The new report, Cellular IoT Connectivity Series: Smart Cities Opportunities & Forecasts, notes that smart cities have recently been put back onto governments’ agendas following increased drives for sustainability in municipal planning and operations. This is particularly the case where local and national governments are supportive of the initiatives, making Europe and East Asia the biggest markets for these technologies.
Kaleido expects smart city initiatives to intensify in future, with cellular IoT connections growing at a CAGR of 17.9% between 2022 and 2027, to reach over 122 million, with particularly high growth in the next two years.
Cellular Must be Part of a Broader Solution
The highest number of connections will be found in the smart lighting space, and Kaleido anticipates over 161 million lights to be linked to a cellular connection as part of their deployment. However, this and many others will often be served by gateways, with a single cellular connection relaying data to and from many lights, which will rely on non-cellular technology at the endpoints. This emphasises the need for interoperable data protocols, to simplify the transfer of data across technologies.
Kaleido expects relatively high data traffic through these connections even where LPWAN is deployed, because of the number of endpoints relayed through the network. This will require effective edge computing to limit the flood of data to the network; in some cases, we estimate this will reduce data transfer by over 80%. As such, an emphasis needs to be placed on edge computing and other service-based revenue, rather than just monetising connectivity.
Smart Traffic Deployments Lead the Way on Revenue
Kaleido’s report also found that smart traffic management will bring the most connectivity revenue, thanks primarily to the prevalence of video usage. It anticipates airtime revenue in this sector to exceed $900 million by 2027, from $292 million in 2022.
“Smart traffic management in many ways represents a nexus for smart city applications,” remarked research author James Moar.
“Traffic routing decisions can be based on air quality data and smart parking availability. However, care must be taken to abide by data privacy legislation and other relevant laws, which will require an intelligent network to direct data purely on a need-to-know basis.”
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