Smart Cities Will be a US$7.6 Billion Opportunity for MSPs in 2023

Smart Cities Will be a US$7.6 Billion Opportunity for MSPs in 2023

Smart cities is one of the main verticals where Mobile Service Providers (MSPs) can use their strength and expertise to move up the value chain to target revenues beyond the connectivity-only space and generate substantial “UnTelco” revenues.

ABI Research, forecasts that by 2023 the smart cities market will be a US$7.6 billion UnTelco opportunity for MSPs and network vendors.

All MSPs are interested in this market, which shows how crucial is the smart cities segment for the future of MSPs.

“Smart cities is a huge and complex market, where a traditional vertical focus is now co-existing with a cross-vertical trend that is gaining momentum. The size of the market, with all its different sub-verticals, means that MSPs can target and assume various roles from system integrators to platform providers,” said Pablo Tomasi, Senior Analyst at ABI Research.

“While the opportunity is huge, competition is mounting, as proven by network vendors’ aggressive activities in the platform space. MSPs need to balance coopetition and prioritize innovative business models, for instance, based on advertising or performance-based revenues, rather than waiting and fostering the marketing trend centered on the role and potential of 5G in smart cities,” Tomasi explained.

More than in any other vertical, MSPs are using innovative tactics to become key market players; their challenge is now to scale these offerings. For example, Verizon has a smart city strategy backed by strong M&A activity (Sensity System and LQD), AT&T is amassing a wide range of partners to deliver spotlight cities solutions, BT is betting on analytics capabilities, and Deutsche Telekom is leveraging aggressive NB-IoT deployments and innovative business models.

“MSPs success in smart cities will be defined by their ability to act – owning a wide ecosystem of partners and improving customer relations while aligning various interests, assets, and innovative monetization options. MSPs’ success and activities will be shaped by their ability to innovate and not by 5G”.

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