TelcoFuturism - Part 2
Urbanization, Smart Cities & Telecoms
This is the second blog post in a series on “TelcoFuturism” – which focuses on the intersection points between the telecom industry, areas of advanced technology, such as drones, AI, AR/VR and robotics, plus societal changes such as climate change & shifting demographics. Disruptive Analysis looks at these adjacent technologies through the lens of what’s really happening in networking, opportunities challenges that could emerge and the tough practicalities and complexities telcos face, rather than accepting the general hype and rose-tinted views common among some forecasters.
Demographic trends & challenges
The last fifty years have seen the world’s city-dwelling population grow rapidly, as employment and social-mobility opportunities have drawn people to large conurbations, from agricultural districts, and then from smaller villages and troubled post-industrial towns.
About 55% of humanity now lives in urban centers, with that figure expected to rise to almost 70% over the next 30 years. And while there is often a focus on the largest mega-cities like Tokyo and Lagos with 10 million or more inhabitants, the bulk of town-folk actually live in mid-sized cities of half a million population or less.
While Africa and Asia see the fastest trends here, this is not just true of developing countries. In many developed countries, the urban population is already at 75% of the total, or higher. In fact, many US and European cities are still expanding outwards and upwards rapidly, in response to housing pressures. There is, however, a social and economic paradox here – the polarization between the larger and more popular “alpha” cities such as London and San Francisco, and the challenges faced by other post-industrial locations such as Detroit or Marseille, or smaller second- and third-tier towns, with high unemployment and little investment.
In theory, cities are beneficial at multiple levels – they help economic productivity, give educational and equal-opportunities for new generations, while shared travel systems can actually reduce environmental impact, as there is less long-distance individual driving, or need for diffuse water and utility infrastructure.
But rapid urbanization creates new challenges in building infrastructure, housing and energy supply. And telecoms is central both to servicing connectivity demands for additional consumers and businesses, and in terms of enabling more-effective metropolitan expansion and administration.
Crossover with telecoms
Urbanization is not a new trend. But across Asia, Africa and Latin America it is continuing to accelerate. Some cities and countries are more methodical and organised than others – certain new districts are “built smart”, and some countries decide to create entirely new cities from scratch. These greenfield cities are potentially more attractive for telecom vendors, integrators and operators than “overlay” enhancements in existing metropolises, although they are fewer – and often have long procurement cycles.
The intersections between telecoms evolution and urbanization are numerous
- Scaling network coverage and capacity for new inhabitants, buildings and employers, all needing both wired and wireless services. Often, this tends to just be tactical expansion and densification. Disruptive Analysis believes that a far more strategic approach to connectivity is needed by city authorities – and in central government setting national policies.
- Smart-city systems need an underlying connectivity fabric for dealing with urban services like transport, energy-management, lighting, waste collection and public safety. There are two countervailing trends here: some authorities want to become telecom infrastructure providers themselves (for instance with open-access municipal fiber or shared 5G infrastructure). In other places, incumbent telecom companies – in search of new revenue sources - are vying to add cities’ new information needs to their own application and connectivity solutions portfolio.
But beyond larger upfront deployments, telcos and other network-infrastructure owners also need to consider how best to “future-proof” what they are building. They will need to extend and densify their mobile networks, anticipate changes in traffic density as low-rise buildings give way to high-rise apartment blocks, and new roads and urban rail systems get built.
So while some of the telecoms implications of urban development are slow-moving and obvious, other aspects are more subtle, or even counter-intuitive. Disruptive Analysis believes that both network operators and municipal/regulatory authorities should pay more attention to second-order effects that could yield surprising outcomes, opportunities and challenges.
Examples of these more complex questions and challenges include:
- Does urbanization of a country make the economics of rural / small-town network coverage and upgrades even harder?
- As cities expand outwards, what rules should new districts have in terms of network coverage? Should property developers be mandated to add fibre and ducts to roadways, and implement street furniture while being mindful of network infrastructure needs like cellular backhaul? Is fixed-wireless access a good “quick fix” for new streets and homes, but a poor longer-term choice compared to fiber?
- Will the advent of self-driving vehicles change patterns of connectivity required, meaning more fiber and wireless access along roads? Will widespread use of such autonomous vehicles restructure cities and suburbs, as people will be able to live and work in more dispersed areas, if they choose? Could this even nudge the pendulum back to de-urbanization?
- Greater urban populations and pressure on space mean that ever more city residents live in multi-dwelling units (MDUs), such as apartment blocks. This adds extra complexity for operators looking to deploy FTTP networks, and also yields complexities for cellular and Wi-Fi coverage. It also has competitive implications for telecoms, as multi-operator access may not be as easy.
- City authorities often have funding constraints – but how should governments balance possible revenues from rights-of-way and infrastructure rental, versus the broader economic and social benefits from improved networks?
- What will be the telecoms/connectivity impact of unmanned drones for physical deliveries, or human-occupied “drone taxis” in major cities? Will this accelerate or change the patterns of urbanization?
- Will metropolitan authorities, or their partners, take advantage of liberalizing radio spectrum allocations, to build localized 5G networks for their own, or citizens’ use? What would that imply in terms of backhaul/fronthaul fiber deployments?
- How closely do power and telecoms planning need to be linked? Increasingly there will be overlap, such as connected vehicle-charging points, lamp-posts used for small cells, and utility companies’ fiber used for both grid control and end-user broadband.
- Will new city environmental rules and goals impact fixed or mobile networks in unexpected ways? Will energy-efficient buildings, with new reflective windows and insulation, block wireless signals used for 5G? Will new edge- or micro-data centers add to the city’s CO2 footprint? Should the networks themselves be optimized for energy use, for instance with greater levels of asset-sharing or neutral/open-access models?
- Will governments look to revitalize left-behind towns with better network infrastructure, perhaps with incentives? Or will they focus more on large-scale regeneration of areas of existing cities as new business/housing districts, with major network investment needs?
- How will tensions between city authorities’ desires, national urban-planning strategy, and telecoms competition law play out? How should different stakeholders approach policy making and lobbying?
- Telcos have roles in helping cities counter risks from climate change and various catastrophic events, but also face their own challenges from extreme weather, floods or cyber-security threats.
- A corollary of urbanization is that declining (and ageing) rural and small-town populations make network investment and operation even harder. Political determination to “connect the unconnected” may mean greater needs for network-sharing and wholesale infrastructure.
- In some countries, ageing populations, emigration and low birth rates are resulting in shrinking cities. This brings additional challenges for telecoms, as their addressable market may fall, while at the same time new requirements for health and social care, or different forms of mobility, may shift demand patterns.
- Do the threats of cyber-attacks, or other catastrophes, imply that cities should look to have backup parallel infrastructures, even if this is costly? Should they have more fiber diversity, or wireless backup for infrastructure connectivity, at least for the most critical functions? How can this be best designed-in upfront?
These and many other questions result from thinking through the evolution paths of cities and telecoms together. Today, there is far too little interaction or alignment of these worlds – as well as broader issues of national importance and in adjacent sectors such as energy, environment and public safety.
The ongoing process of urbanization allows cities to do things differently to the past. Telecoms is infrastructure! And telecoms is essential for attracting businesses and providing services to residents and municipal bodies. Yet the inter-dependencies are not entirely obvious at first glance.
Early involvement in urban planning and design phases can yield both foresight about future network needs, and also greater opportunity to participate in higher-value smart city projects. This can also act to give warning about city authorities’ possible intentions to build their own networks – and perhaps even compete with telcos with municipal infrastructure, if regulations permit. A variety of public-private partnership models are emerging, for instance around open-access fiber and neutral-host mobile, which offer win-win opportunities. Win-win approaches are possible.
Disruptive Analysis believes that a “telcofuturism” approach to combining telecoms and city needs and directions can yield huge upsides to all stakeholder groups.
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