Municipal Broadband Wireless North American Business Models
Axel Leblois, Co-Founder, W2i EUROCITIES Knowledge Society Forum - Telecities ICT for Safe Digital Cities, Bologna June 28, 2007
Municipal Broadband, North American Cities, 2006
Municipal Wireless Broadband Market
$400 $350 $300 $250 $200 $150 $100 $50 $0
Dollar Value (Millions)
•Over 300 US Municipal Wireless Projects Deployed in 2006 •Mix of Municipal Ownership and Public-Private Partnership Models
2004 2005 2006 2007
Capital Investment in Municipal Wireless Broadband Networks
Source: W2i/Yankee Group Research 2006
Moving from Single Application Networks to Multi-Purpose Networks
Is it a multi-purpose network?
Yes
Municipal wireless networks are increasingly leveraged for multiple applications reducing costs and offering new services to citizens:
No
0%
20%
40%
60%
80%
Public Safety/Police/Fire Meter Reading/Monitoring Field Inspections Intelligent Traffic Management Neighborhood/Community Portals Educational Broadband Public Access Digital Inclusion
Source: W2i/Yankee Group Digital City Survey, 2005
Public Safety: San Mateo (CA) Police Department
72 Officers in 40 Patrol Cars Tropos MetroMesh:
• 3 backhaul points • 37 access points • 3.5 sq.miles
Applications:
• CAD, Records Mgt, Reporting • Database access (LAWNet, DMV, video monitoring…)
Impact:
2 hours/day/officer saved
Workforce Productivity Increases: Medford (OR) Public Works
20 Public Works Crews on shared network among other municipal agencies Motorola MotoMesh: Applications: Work order access from the field Impact:
1 hour/day/crew member Shared infrastructure with public safety
Future Impact:
20+ additional applications including: Records access Location based services GIS
Machine to machine communications Corpus Christi (TX) Water & Gas Utility System
Calculated Cost per Read - Personnel Costs
$1.90 $1.70 $1.50 $1.30 $1.10
Dollars
$0.90 $0.70 $0.50 $0.30 $0.10 $(0.10) 0 2 4 6 8 10 Year 12 14 16 18 20
Current
Drive By
Fixed Network
Field Workforce Automation Scenario
City population Local Government workforce Field workforce Productivity improvement Dollar savings 3% 30% 20% $3050,000/man/year
100,000 3,000 900 180 man/years $ 5.4 to 9 million/year
*Assuming 20% public subscriber uptake
How are you financing the network build?
50% 45%
44% 38%
40%
35%
30%
25%
24%
20%
15%
15% 10%
14%
8%
5%
0%
Local government entity budget/ tax money
Bond underwritings
Grants
Dual funding from private partner and community
Privately funded by private partner
Operational Cost Savings
Patterns are starting to emerge attesting to a negotiation between local government and the private sector to determine the right mix of cooperation
Source: W2i Yankee Group Houston Survey 2006
Municipal Broadband Business Models
Business Model Public/Private Partnership
Benefits Lower risk for community Expert knowledge in network design and management Eliminates all risk, but removes flexibility and government having any role in network Complete financial burden Lack of expertise and knowledge in network build City owns network and outsources to integrator or service provider Focus on government applications
Philadelphia Minneapolis
Private Ownership
Rio Rancho, New Mexico Grand Haven, Michigan
Municipal Own and Operate
Chaska, Minnesota Allegheny County, Maryland
Own and Outsource
Corpus Christi, Texas Miami Beach, Florida
Municipal Wireless: Key Observations
Measurable benefits in government operational efficiencies abound Broadband wireless infrastructure deployment is first and foremost driven by the need for “Better City Management” “Cheap Public Access” as a primary driver for deployment of wireless infrastructure is highly speculative and should be viewed as a secondary objective, or side benefit
A Resource for Municipalities Involved with Broadband Wireless Networks
www.w2i.com
www.w2i.com
axel_leblois@w2i.org
Thank You
Wireless Internet Institute
225 Franklin Street, Boston, MA 02110 Tel: (617) 439 5400 Fax: (404) 252 0628
Existing Technology in Communities
Hybrid Technology 3G Cellular WiM AX M obile M esh Wireless M esh WiFi 0% 10% 20% 30% 40% 50%
Source: W2i/Yankee Group Digital City Survey, 2005
The Digital Divide Is Real 2004 US Broadband Penetration By Income
B roadband P enetration
60% 50% 40% 30% 20% 10% 0 >$100k $75-$100k Average
5x in Difference
Broadband Availability
$10-$30k
<$10k
S ource: P ew R es earch, 2005 esearch,
Knysna, South Africa
Geography: Sub-urban Operating Area: 1,059 km². Population Served: 51,000 Cost: US$ 370,000
Local Champion: Knysna municipality Partners Include: Several local government agencies UniNet Communications Driving Factor: Cost effectively connect all 46 municipal branches with data connectivity and voice Secondary Applications: To improve local government service delivery To further differentiate Knysna as a destination of choice for businesses, tourists and citizens Provide low cost connectivity and voice solutions for citizens
Digital Cities Convention:Major Applications
US Local Gove rnm e nt Workforce (000)
1 0000 9000 8000 7000 6000 5000 4000 3000 2000 1 000 0
17,7 % growth
Priority driven by compelling ROI based business case: Priority #1: service local government mobile workers Priority #2: provide infrastructure necessary for job-saving and jobcreating investments Priority #3: digital inclusion Priority #4: deliver lifestyle changing services to citizens Priority 1&2 are the short/medium term, lower risk compelling economic business case that higher risk priority 3&4 can leverage to achieve long term political goals
6.3% growth
2002
Mobile Workforce Sedentary Workforce
201 2 Year