The Advent of Smart City 3.0

Technological development has led smart cities from the 1.0 and 2.0 phases towards evolution to people-oriented informatization. Smart City 1.0 was based on PC and Internet with e-Government and e-commerce as its main application scenarios, while Smart City 2.0 was based on smart phones and mobile Internet with mobile payment as its main application scenario. The emergence of Narrowband Internet of Things (NB-IoT), a narrowband massive connection technology of mobile IoT, has brought about Smart City 3.0. In this generation of Smart Cities, IoT serves as the neural network of the city and artificial intelligence (AI) serves as the brain of the city. Smart City 3.0 is dedicated to comprehensive connections both between things and people and between things and things. This generation has multiple application scenarios, including smart water, smart manhole cover, smart environmental protection, smart firefighting, smart transportation, smart lighting, etc. Mobile IoT is the basis of Smart City 3.0, and is a hot spot for investment and construction in the industry.

According to a research report produced by Markets and Markets in 2017, the global market volume for Smart Cities is expected to increase from US$424.68 billion in 2017 to US$1.20169 trillion by 2022, with a compound annual growth rate of 23.1%.

Thriving global development of Smart Cities

In China, local government work reports and the 13th Five-Year Plan indicate that 95% of sub-provincial cities and 83% of prefecture-level cities, representing more than 500 cities in total, have specifically proposed to build or are in the process of building Smart Cities. The total investment will reach CNY1 trillion.

Barriers to the Development of Smart Cities

As urbanization accelerates, increasing numbers of people are moving to cities, contributing to more than 70% of global GDP. Smart Cities enable efficient municipal management, quality public services, and innovation-driven industrial transformation. Despite its bright future and numerous projects underway, Smart Cities still face the following three major challenges to development:

1.Lack of an optimal connection technology for things

Things are scattered across the corners of cities, from buildings and streets to corridor corners, basements, and underground pipelines. This poses heightened requirements for network signal coverage. Existing 2G, 3G, and 4G networks cannot cover all these scenarios. 2G networks face multiple issues, including limited connection capacity, elevated power consumption, network shutdown, and spectrum refarming. 3G and 4G networks have low resource utilization for most connections between things.

Traditional short-distance connection technologies on unlicensed spectrums, such as Wi-Fi, Bluetooth, and RFID, only cover small areas and perform poorly in deep coverage. In addition, those technologies are susceptible to interference and have difficult power acquisition and poor security.

This means that traditional connection technologies cannot meet the needs of Smart Cities for numerous connections that offer wide coverage, low power consumption, and low costs.

2.Lack of an IoT management platform for industries

Currently, Smart Cities IoT services for industries are siloed and fragmented. Industries have independent application management systems, interface standards, data formats, and even networks. As a result, they cannot interconnect with each other or aggregate and integrate data, meaning that they fail to provide holistic data supporting for the city decider. Smart Cities need to build an IoT management platform that is converged across industries and vendors.

3.Lack of a mutually beneficial business model

Smart City application scenarios mainly involve public facilities (fire hydrants and manhole covers, etc.), and utilities (water metering and street lamp lighting, etc.). These application scenarios offer benefits to society, but their initial investment amounts are large and their commercial value is unclear. To reduce the entry threshold to the industry, and to balance the advantages to society and business value, a set of business models that benefits governments, including governmental industry management agencies, as well as industry operators, telecom carriers, and vendors, must be identified. This is a key issue preventing a boom in the growth of Smart Cities.

Key Roles in the Promotion of Smart City Development

Smart transformation is an inevitable trend of city development. Multiple parties have made concrete efforts to address the challenges outlined here. Among these parties, governments and telecom carriers have played a vital role in Smart City development.

1.The government leads planning and policy formulation for Smart Cities. According to the objectives for overall city development, the government should produce a top-level Smart City design to ensure smooth city operations, covering resource integration, industry applications, technical standards, networks, O&M, and even business models. The government can also provide direct support through policies, such as by offering financial subsidies, guidance funds, or incentives for innovation, by constructing incubator industry parks, and by leading the IoT industry alliance.

2.Telecom carriers are important participants in Smart City construction.Carriers plan and build mobile IoT, and leverage network technologies and channel advantages to provide various IoT services.

(1) Traditional 2G, 3G, and 4G networks are upgraded to NB-IoT networks to provide ubiquitous public mobile IoT with low power consumption and wide coverage. As of the end of 2017, 91 carriers globally have invested in or constructed NB-IoT networks in 52 countries, and 39 NB-IoT networks have been put into commercial use.

(2) Build a public IoT service platform that integrates industry applications to provide IoT services for various industries. Currently, more than 50 carriers around the world have deployed IoT platforms, making remarkable achievements in Smart City applications. In addition, they have conducted in-depth integration and joint development with 50 industries.

(3) Respond to the government's call, actively promote the construction of the IoT ecosystem, and explore a business model based on value sharing. To take China as an example, three major Chinese carriers have paid close attention to ecosystem construction. They attract upstream and downstream partners by means of module subsidies, open labs, ecosystem alliances, innovation contests, and summits. In terms of business models, in addition to the traditional capital expenditure (CAPEX), operation expenditure (OPEX), and revenue sharing (RS) models, innovative models such as energy performance contracting (EPC), build-operate-transfer (BOT), build-operate-manage (BOM), public–private partnership (PPP), and other flexible models can be applied to public municipal product and service scenarios.

3.Huawei offers dedicated technological support for Smart City construction. As a global leader in mobile IoT solutions, Huawei has in-depth understanding of various industries and provides a series of solutions covering the communications chip (Boudica), IoT terminal operating system (LiteOS), mobile IoT, IoT platform (OceanConnect), and ecosystem. Huawei helps governments and carriers address the challenges and problems of Smart City construction.

(1) Chips: Launched by Huawei in the IoT domain, Boudica series chips are the industry's first NB-IoT chips. They have been put into commercial use and can be embedded with Huawei LiteOS, a lightweight IoT operating system. Millions of chips are produced every month. As of late 2017, Huawei has cooperated with multiple module vendors, with 12 vendors offering large-scale production capabilities (up to millions of modules per month).

(2) IoT operating system: The LiteOS is a lightweight IoT-oriented software platform which integrates an IoT operating system and middleware. It is implanted into terminals, effectively lowering the development threshold and shortening the development period.

(3) Network: In addition to traditional 2G, 3G, and 4G networks, Huawei has released the groundbreaking NB-IoT solution for low-speed connections of things. This solution meets industry requirements for mass connections (100,000 terminals/cell), wide coverage (20 dB more gain than GSM), low costs, and ultra-long standby terminals (up to 10 years). It enables carriers to build a Smart City neural network that can grasp the operating status of the city in an accurate and timely manner.

(4) IoT platform: The OceanConnect is a management platform designed by Huawei for the IoT domain. It ensures that governments and industries can use unified connection management to obtain service information, data, and terminal status as soon as possible. It also provides data through standard data interfaces to help city managers make decisions.

(5) Ecosystem enablement: Huawei has built 5 IoT OpenLabs and 8 carrier-joint OpenLabs across the world, and has established the Developer Community. In this way, Huawei has provided industry partners with IoT product development, testing, certification, and innovation support services to help partners quickly launch products, supporting mutually beneficial cooperation. As of late 2017, Huawei has cooperated with more than 1000 partners worldwide.

Huawei has participated in the planning and construction of Smart City projects for more than 100 cities in more than 40 countries and regions.

In the future, Huawei will continue to embrace customer-centric and business-driven concepts and resolutely help carriers promote the construction of Smart Cities. We will work with governments, carriers, and industries to carry out our mission of "better governance, livelihood, and business," and to build a smart world where all things are connected.