Around the year-end holiday season we can all look forward to sitting in some really long traffic jams as we traipse around visiting family. In fact, according to the INRIX 2015 Traffic Scorecard, Americans spend an average of 50 hours each year stuck in traffic up from 19 hours in the early 1980s. Los Angeles tops the leaderboard with an average of 81 hours but it is even worse in Europe with 101 hours wasted by London commuters each year.
Satnav maker TomTom produces its own index of traffic congestion which shows the problem is worse still in developing countries with Mexico City, Bangkok, and Istanbul all having rush hour traveling times around double what they should be in in free-flowing traffic. Government spending on road and parking infrastructure in cities such as these has not kept pace with the increase in cars in recent decades driven by high population growth and rising incomes.
Our current traffic crisis is comparable with the "Great Horse Manure Crisis" of 1894 when The Times newspaper predicted that "In 50 years, every street in London will be buried under nine feet of manure." With 100,000 horses being used to transport people and goods in New York City alone the problem was debated in the city at the world's first international urban planning conference at the turn of the century. At the time no one could foresee a solution. Karl Benz had been selling cars in Germany since 1886 but no one considered them a replacement for horses at the time due to their high cost. With the mass production techniques of industrialists such as Henry Ford the motor vehicle became much more affordable and hence the number of cars on New York City's roads steadily rose reaching horse parity in 1912.
Today we no longer suffer from horse pollution but instead have gridlocked streets with air-polluting automobiles. Motor vehicles also bring other bad things such as traffic accidents. Once again the technological solutions are probably available but have not all yet reached the economies of scale that make them affordable. In a recent white paper called Smart Transportation, Huawei identifies four major opportunities for mobile operators: connected car services, smart parking, safety systems and emergency services networks.
The connected car opportunity (infotainment, telematics, fleet management) is perhaps the most obvious and mature. However, the question for mobile operators is, like with all IoT opportunities, what value can they bring beyond a bit pipe? On the infotainment side consumers already take their smartphones with them on car journeys -- will the driver be prepared to pay for a separate data connection for the vehicle to stream Internet video to passengers? Telematics is a well established industry covering services such as roadside assistance, navigation, usage-based insurance and remote diagnostics. But the data connectivity contracts are fiercely negotiated by the telematics service providers leading to low margins as well as meager ARPU for the mobile operators. Some operators have built their own telematics businesses mainly through acquisition (e.g. Verizon -- Hughes, Vodafone -- Cobra), however, does such vertical integration bring any synergies or is it simply diversification?
With around 1.3 million road traffic fatalities globally each year, road safety is a critical problem. The solution is perhaps to remove human drivers from the equation or, at least in the short term, to enhance the safety features of human-driven cars. Current Advanced Driver Assistance Systems (ADAS) use cameras or lasers to identify dangers in the road ahead and notify the driver. However, road safety could be further improved through so called Vehicle-to-Everything (V2X) communication which would allow vehicles to communicate with each other ("Watch out, I'm braking!") or road infrastructure (roadworks, intersections, etc.). Some countries have been promoting WiFi-like technology for the V2X communication while others consider LTE to be a more suitable radio bearer.
"My father didn't pay for parking, my mother, my brother, nobody. It’s like going to a prostitute. Why should I pay when, if I apply myself, maybe I can get it for free?", said George Costanza in the TV series Seinfeld. A study from 1993 estimated that 8% of New York City traffic was cars looking for a parking space (free or otherwise). Estimates in other cities were much higher and the situation globally has probably worsened in the last 20 years due to increased car ownership. "Smart parking" involves fixing cellular modules next to the curb that detect if a car is parked above and transmit the information using NB-IoT. Local government usually plays the lead role in smart parking, providing the majority of the capital outlay, but relies on telecom operators to provide the connectivity and sometimes a payment mechanism too.
The emergency services opportunity seems a bit tangential to the smart transportation theme. It is nonetheless an important opportunity for mobile operators as governments around the world seek to upgrade from legacy TETRA networks to LTE or, in some cases, implement emergency services networks for the first time. According to Markets and Markets, the global wireless broadband in public safety market is projected to grow from $16 billion in 2014 to $23 billion in 2020.
Perhaps in a hundred years' time people will look back at articles like this with amusement just as the thought of an urban horse manure crisis seems quaint to us. Perhaps we will all use virtual reality to "transport" ourselves to other environments for work and play instead of getting in cars. With driverless cars the parking problem is likely to go away though the streets could still be clogged with driverless taxis looking for their next fare or paralyzed as jay walkers blithely cross the street in front of them. Whatever the future brings it is likely to involve a more highly networked world reliant on high-capacity, low-latency, mobile communications. Telecom operators may not reap all the benefits of smart transportation for themselves but they still have a key role to play.
This blog is sponsored by Huawei.
— James Crawshaw, Senior Analyst, OSS/BSS Transformation, Heavy Reading