Technology Smart City Opportunity - India

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Technology Opportunityin Smart Cities: India

Oct, 2016

1

Government of India aims to leverage “Smart Cities” to improve the economy

Note: 1Cities: Areas having population more than 100K | 2Urbanization Rate: % of the total population living in urban areas | Urban area is the region surrounding a city with most inhabitants having non-agricultural jobsSource: World Bank | IMF | Zinnov Analysis

# of Cities1

300+ 70+ 650

+500+

Urbanization Rate2

82% 83% 56% 33%

35 269 146 441Population Density

(Population /Sq.Km)

Area (Mn Sq. Km)

9.8 0.2 9.6 3.3

GD

P PP

P (B

n)

Population (Bn)

0 225

0

UK

India

China

US

Size of bubble indicated GDP PPP/Population

Infrastructure Overview by Country-2015 India has Weaker GDP PPP Per Capita-2015

2

Massive urbanization and plaguing challenges are augmenting the demand for smart cities

Note: 1Urban Population for 500+ cities in India | 2GIS: Geo Spatial Information System Source: Press Releases | Zinnov Analysis

India is trying to address its urban challenge

s by building Smart Cities

Transportation

Power &

Energy

Water

Sanitation

• 2nd largest road network but ranks 76th for its quality

• Limited dependency on public transport

• ~$62 Bn expenditure on crude oil imports in FY16

• ~18% of total energy output lost in distribution

• ~80% of sewage directly flows into the rivers

• ~54% of cultivable land is dependent on monsoons

• ~76Mn citizens have limited access to water

• ~7.5% of urban population1 uses open defecation

Smart Cities will Leverage Technology to Address Challenges

Water

• Analytics: Real time analysis of water availability patterns

• GIS2: Assessment of water consumption patterns

Power &

Energy

• Analytics: Predict demand and analyze operations

• Smart Meters: Reduce theft and pilferage

Transportation

• Smart tolls: Efficiently reduce the queues and collect user charges

• Smart traffic lights: Regulate traffic based on real-time traffic conditions

3

Waste Managem

ent

• Maintenance Decision Support Systems: Provides intelligence on roads and pavements for repairs

• Analytics: Projections about capacity management

“Smart City” program is supported by various other government initiatives for faster results

• 100 Smart cities being developed across 6-industrial corridors

• 90 Mn new jobs to be created by 2022

• 16 Technology Business Incubators being planned in smart cities

• 7 Research centers and 13 startup centers being built in smart cities

• Leverage GIS1, Big Data/Analytics to deliver direct benefit transfer schemes

• 500Mn+ Broadband users by 2020

• $20 Bn investment in Metro rail projects by 2020

• $10.5 Bn investment for 534Km Mumbai-Ahmedabad high speed rail project

Transportation• $26 Bn investment by Power Grid

Corporation of India by 2020• 8 Smart Grid projects being

implemented

Power & Energy

Note: 1Geographical Information SystemSource: Press Releases | Zinnov Analysis | USD to INR conversion: $1 = 65INR 4

100 potential cities have been identified based on the recommendations from the States/UTsJammu & Kashmir* 1

Chandigarh 1

PunjabAmritsar, Jalandhar, Ludhiana

3HaryanaFaridabad, Karnal 2

New Delhi Municipal Corporation

1RajasthanAjmer, Jaipur, Kota, Udaipur

4

Madhya PradeshBhopal, Gwalior, Indore, Jabalpur, Sagar, Satna, Ujjain

7

GujaratAhmedabad, Dahod, Gandhinagar, Rajkot, Surat, Vadodara

6

Daman & DiuDiu

1Dadra & Nagar HaveliSilvassa

1MaharashtraAmravati, Aurangabad, Thane, Greater Mumbai, Kalyan-Dombivali, Nagpur, Nashik, Navi Mumbai, Pune, Solapur

10 Goa

Panaji 1

LakshadweepKavarrati

1 Tamil NaduChennai, Coimbatore, Dindigul, Erode, Madurai, Salem, Thanjavur, Vellore, Thoothukudi, Tiruchirapalli, Tirunelveli, Tiruppur

12Kerala

Kochi 1KarnatakaBelagavi, Davanegere, Hubballi-Dharwad, Mangaluru, Shivamogga, Tumakuru

6

Himachal PradeshDharamshala

1

UttarakhandDehradun

1

Uttar Pradesh*

Agra, Aligarh, Allahabad, Bareilly, Ghaziabad, Jhansi, Kanpur, Lucknow, Moradabad, Rampur, Saharanpur, Varanasi

13

BiharBhagalpur, Biharsharif, Muzaffarpur

3SikkimNamchi

1

Arunachal PradeshPasighat

1AssamGuwahati

1ManipurImphal

1

TripuraAgartala

1

MeghalayaShilong

1

JharkhandRanchi

1

OdishaBhubaneshwar, Raurkela

2Andaman & Nicobar IslandsPort Blair

1

ChhattisgarhBilaspur, Raipur

2Andhra PradeshKakinada, Tirupati, Vishakhapatnam

3PuducherryOulgaret

1 TelanganaGreater Hyderabad, Greater Warangal

2

NagalandKohima

1MizoramAizawl

1

West BengalBidhannagar, Durgapur, Haldia, New Town Kolkata

4

Note: *1 city each in UP and J&K to be decided later on by the Government of India | Madhya Pradesh is considered to be a part of West Region Source: Press Releases | Zinnov Analysis

# Shortlisted Smart Cities in that StateColour represents Region of the State

5

Current Persona of 100 Shortlisted Cities

100Cities

Contribution to India’s GDP

Population of 100 cities

Tier-III1 cities

Cities having population over 1 Mn

Cities from UP, Tamil Nadu & Maharashtra

$190Bn

125Mn

41

65

35

Shortlisted cities are a mix of urban, semi-urban, business and financial hotspots

Note: 1Definition of City Categories by Population : Tier I – >5 Mn, Tier II – 1-5 Mn, Tier III - <1 MnSource: Press Releases | Zinnov Analysis | USD to INR conversion: $1 = 65INR 6

Key Components of Smart City

Global MNCs, Indian enterprises and startups have capabilities to address the rising demand

Power

Transportation

Video Surveillance

Traffic Management

Water & Wastage

Start-upsLarge Enterprises

*Illustrative List of Companies

Source: Press Releases | Zinnov Analysis 7

Global Technology MNCs

Smart Buildings

Total Spending (E)

(Across 100 Smart Cities during 2015-2020)

$31 Bn investment would be required to build 100 cities sustainable and future ready

33%

22%

19%

13% 2% 11

%

Transportation Power Water & Sewage Governance Waste Management Others

100-120 100-120 130-15030-50 20-30

140-160

430-450240-260 170-190

170-1903-5

30-40

Pan-city

ABD

3

530-570

340-380 300-340200-240

23-35

160-200

%age of TotalTechnology Spend

TechnologySpend by

Key Categories($ Mn)

Note: ABD : Replacing the existing built-up portion of a city and enabling co-creation of a new layout ; Pan-city : Development and implementation of smart solutions to the existing city-wide infrastructure |1Cloud includes Public, Private & Hybrid | 2Governance include Infrastructure, Security & Surveillance, Traffic Management etc. | 3Others include Education, Healthcare, Cross functional elements such as Thematic Mapping etc. | E denotes estimated valuesSource: Analysis based on Proposals of Top 20 Smart Cities | Press Releases | Zinnov Analysis

$31 Bn

$800-900Mn

Cloud based service delivery platforms for E-Governance initiatives

20% of Indian smart city solutions will be IoT-enabled by 2020

Cloud based Analytics solutions for smart grids and tax collection systems

Technology SpendCloud1 Spend

2

Area Based De-velopment (ABD)Pan-city

60-70%

30-40%

$1.5-2Bn70-75%

25-30%

8

West# Smart Cities: 30

Population1: 62 Mn (49%)

Total Spend: 10,000-11,000 (36%)

Technology Spend: 540-590 (34%)

Sout

h

# Smart Cities: 27

Population: 28 Mn (22%)

Total Spend: 7,200-7,500 (24%)


East

# Smart Cities: 19


Total Spend: 4,200-4,400 (14%)


# Smart Cities: 24


Total Spend: 8,000-8,200 (26%)


North

Spending Split By Region ($ Mn)

Note: 1Population of Smart Cities in that StateSource: Press Releases | Zinnov Analysis

Of total & technology spending will be driven by UP, Maharashtra & Tamil Nadu

~44%

Of total technology spending will be on tier-III cities>60%

Of total spending will be on tier II and III cities91%

Tier-III cities will witness maximum spending for transforming into a Smart City

(%) Represents share in Total Spend Value

9

Low

High

Tech

nolo

gy

Spen

d

HighLow Total Spend

Total Spend vs. Technology Spend for Smart Cities

States in West India are expected to lead the overall spend followed by states in South India

A&N Islands

Arunachal Pradesh

Assam

Andhra PradeshBihar

Chandigarh

Dadar & Nagar Haveli

Daman & Diu

New Delhi

Goa

Chhattisgarh

Haryana

Himachal PradeshJammu & Kashmir

Jharkhand

Gujarat

Karnataka

Kerala

Lakshadweep

Madhya Pradesh Maharashtra

Manipur

Meghalaya

Mizoram

Nagaland

Odisha

Puducherry

PunjabRajasthan

Sikkim

Tamil NaduWest Bengal

Telangana

Tripura

Uttar Pradesh

Uttarakhand

Source: Press Releases | Zinnov Analysis

North

West

South

East

# States/UTs : 13

# Smart Cities : 75

Total Spend : $26 Bn

Technology Spend : $1.4 Bn

Leader Zone

# States/UTs : 17

# Smart Cities : 19

Total Spend : $4.1 Bn

Technology Spend : $218 Mn

Contenders Zone

10

Bubble Size indicates Number ofSmart Cities in the respective State

~$200Bn

Additional contribution ofshortlisted cities in the GDP after

transformation >10%Real-Estate industry’scontribution to Indian GDPby 2020 from 6% in 2015

Source: Press Releases | Zinnov Analysis

40% Contribution of Smart Cities inurban population of India

(70% in the economy) by 2020

Smart Cities will have positive impact across key development areas

Number of jobs created due toSmart City initiative, a rise of

10-15% in the employment

>10Mn

Savings in traffic congestion withthe help of smarter technology

>$10Bn

Reduction in energy consumptiondue to smarter infrastructure,

15% saving in water losses 40%

Impact of 100 Smart Cities by 2020

11

Entity

Role

Initiative2

Note: 1Technology Vendors include Product Vendors, System Integrators, Network Service Providers & Managed Service Providers | 2Illustrative initiativesSource: Press Releases | Zinnov Analysis

Participating entities are adopting various measures to win “Smart City” contracts

Cross-Border Collaboration

s

1

Cross-border government

agencies that are willing to invest in

upcoming Smart City projects

India, Japan signed MoU to develop

Varanasi into a Smart City

Technology Vendors1

2

Partnering with government to

execute Smart City projects

Cisco and IL&FS collaborated to utilize IoT to develop digital solutions for India's infrastructure and

Smart Cities

Real Estate Developers

3

Building Smart Cities in a defined premise

In Pallava project, Lodha builders

partnered with GE for treatment of waste

water, to be re-used in flushing, landscaping,

etc.

Government owned Bodies

4

Government forms bodies such as

Special Purpose Vehicle (SPV), local

municipal corporations etc. to

manage the implementation of Smart City projects

Delhi Development Authority is building Delhi’s first flagship Smart City project in

East Delhi

Industry Associations

5

Taking initiatives to build platforms for pilot testing and

encouraging/ inviting stakeholders to

participate

CII, Siemens and Hitachi formed

consortia to lead the conceptualization and

implementation of pilot projects in Smart

Cities

12

Limited technology vendors have offerings across key focus areas of the initiative

Note: 1Capability is measured on the basis of solution offerings and case studies available across each category globally | 2Others include Healthcare, Education etc.Source: Press Releases | Company Websites | Zinnov Analysis

High Very Low

Capability1 Mapping of Key Vendors across Smart City Components

13

*Illustrative List of Companies

Transportation

Governance

Water & Sewage

Power

Waste Management

Others2

SystemIntegrators

Technology

Vendors

Note: 1Subject Matter Experts | 2Banking, Financial Services and InsuranceSource: Press Releases | Zinnov Analysis

Regulations Managemen

t

3 Set up its datacenters in India to cater verticals like Government and BFSI2 etc.

Setting up a surveillance system and integrating it with existing CCTV cameras for Lucknow Police Department

Open to Flexible Payment Options

Special Focus on Regulated Industry Verticals

Adherence to

Local Laws

Technology vendors need to augment their capabilities to address the Smart City opportunity

14

Development of Local

Ecosystem

1 Consultants

Local Government

Bodies

India based ISV

Partnerships

SME1 on Best Practice

Applications

Developing multiple solutions around waste & water management

Ebix & Educomp have partnered to set-up Smart Classroom and E-learning solutions in Udaipur

Solution Customizati

on

2 Scale & Requirement

of Indian citiesFocused towards Key Pillars (smart

energy, waste management, etc.)

Addresses NativeIndian

LanguagesIntegration

withExisting

Initiatives

Reduced the prices of its LED products following Governments initiative to replace bulbs with LEDs and resulted in ~4X increase in

revenue

Allowing local users to create and consume content in regional Indian languages

Recommendations Illustrative Examples

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Technology Smart City Opportunity - India

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