Municipal Broadband Wireless North American Business Models
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1 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
2 Municipal Broadband, North American Cities, 2006 Municipal Wireless Broadband Market Dollar Value (Millions) $400 $350 $300 $250 $200 $150 $100 $50 $ Capital Investment in Municipal Wireless Broadband Networks Over 300 US Municipal Wireless Projects Deployed in 2006 Mix of Municipal Ownership and Public-Private Partnership Models Source: W2i/Yankee Group Research 2006
3 Moving from Single Application Networks to Multi-Purpose Networks Is it a multi-purpose network? Yes No 0% 20% 40% 60% 80% Municipal wireless networks are increasingly leveraged for multiple applications reducing costs and offering new services to citizens: 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
4 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
5 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
6 Machine to machine communications Corpus Christi (TX) Water & Gas Utility System $1.90 Calculated Cost per Read - Personnel Costs $1.70 $1.50 $1.30 $1.10 Dollars $0.90 $0.70 $0.50 $0.30 $0.10 $(0.10) Year Current Drive By Fixed Network
7 Field Workforce Automation Scenario City population Local Government workforce Field workforce Productivity improvement Dollar savings 3% 30% 20% $30-50,000/man/year 100,000 3, man/years $ 5.4 to 9 million/year *Assuming 20% public subscriber uptake
8 How are you financing the network build? 50% 45% 44% 40% 38% 35% 30% 25% 24% 20% 15% 15% 14% 10% 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
9 Municipal Broadband Business Models Business Model Public/Private Partnership 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 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
10 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
11 A Resource for Municipalities Involved with Broadband Wireless Networks
12 Thank You Wireless Internet Institute 225 Franklin Street, Boston, MA Tel: (617) Fax: (404)
13 Existing Technology in Communities Hybrid Technology 3G Cellular WiMAX Mobile Mesh Wireless M esh WiFi 0% 10% 20% 30% 40% 50% Source: W2i/Yankee Group Digital City Survey, 2005
14 The Digital Divide Is Real 2004 US Broadband Penetration By Income Broadband Penetration 60% 50% 40% 30% 5x Difference in Broadband Availability 20% 10% 0 >$100k $75-$100k Average $10-$30k <$10k S ource: Pew R esearch, 2005
15 Knysna, South Africa Geography: Sub-urban Operating Area: 1,059 km². Population Served: 51,000 Cost: US$ 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
16 Digital Cities Convention:Major Applications US Local Governm ent Workforce (000) ,7 % growth 6.3% growth 2002 Mobile Workforce 2012 Sedentary Workforce Year 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
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