NEW DELHI: Global majors such as Ericsson, Nokia, Huawei and Cisco are betting big on India’s ‘smart cities’ project, which is estimated to be an up to $50 billion (Rs 340,000 crore) business opportunity over five years.
For companies like Cisco, which are largely looking at IT solutions, the opportunity is pegged at around $25 million per city, according to industry estimates.
Players like Ericsson and Huawei have started working on some of the projects in the country, while Nokia could soon bid for some projects. Cisco, on the other hand, is involved in more than 25 cities, including the government’s 20 official smart cities shortlist.
The government has defined a smart city in the Indian context as one that provides a decent quality of life to its citizens, a clean and sustainable environment, and supports the application of smart solutions.
It has shortlisted 20 cities, including Pune, Jaipur, Surat, Kochi, Ahmedbad, New Delhi, Chennai, Visakhapatnam, Ludhiana and Bhopal, which will be developed as smart cities. The smart city market opportunity in India will be $45-50 billion over the next five years, according to a report by Sustainability Outlook.
The electronic equipment business, just for the first phase, will be a $220-250 million opportunity for these vendors. For companies like Cisco, which are largely looking at IT solutions, the opportunity is pegged at around $25 million per city, according to industry estimates. “The Indian government’s vision of a Smart Digital India is creating enormous opportunities,” said Orvar Hurtig, global head of industry and society at Ericsson. The company has identified three key industry segments public safety, utilities and transport—as its focus areas in the country.
The Swedish company has just won its first deal in India in the utilities space—to install 15,000 smart meters in Assam over the next three years for a public sector power company.
Ericsson, which earlier created a separate vertical called ‘industry & society’ to tap ‘Smart City’ and ‘Digital India’ opportunities, expects up to 20% of its India sales to come from this segment by 2020. Sales from this segment are negligible now.
Sandeep Girotra, Nokia’s head of India market, said the company is in talks with various state governments and the Centre and may soon bid for some projects. “We believe that there is no single approach that fits all cities and each city can have multiple drivers, therefore, it is absolutely vital to engage with state government, city administration and planners to understand their objectives and KPIs,” Girotra added.
Cisco, which has worked on more than 120 smart cities globally, is working in 12-13 cities out of the list of 20. Besides, the company has been working in another 14-15 cities, according to Purushottam Kaushik, managing director-sales at Cisco India & Saarc.