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Market Overview


Milton D’Silva explores how telematics is helping in shaping the smart cities ecosystem.

The term smart city was coined by IBM in 2014. Image by Tumisu from Pixabay

Telematics is a portmanteau term formed by combining the words telecommunications and informatics. Originally used in French – télématique – it was coined by authors Simon Nora and Alain Minc in a 1978 report that originally foresaw the use of telecommunications to exchange information with the science of computer processing. In simple terms, telematics is the process of transmitting information remotely over long distances, now over the internet. This is done in order to monitor, track and control various movements and activities, in conjunction with the use of sensors, GPS technology and other electronics to collect and transmit data. Today it is associated almost exclusively with vehicles and mobile machinery, though there are other applications as well. The exchange of information is central to the applications, the information gathered from multiple sources and devices and computed into useful bytes for specific applications. So widespread is the use of telematics today that it is just taken for granted with no thought to the technologies that go into it.

Like most other sensitive technologies, the use of telematics, even before the term was coined, had begun with the US Defence Department that had developed the global positioning system (GPS), a network of satellites and receiving devices used to determine the location of combat vehicles and equipment in the field. Again as it often happens, it did not take long for the technology to become declassified and widely adopted for general applications, especially with the internet becoming available to the common man. By the early 1990s, GPS was made available for civilian use and the progressive growth in wireless communication technologies that enabled cellular networks made real-time data from vehicles available to central systems. This in turn resulted in the development of telematics systems for vehicle tracking, navigation, and emergency assistance. The earliest example of the effective use of telematics in the automotive field was when the government in South Africa used the technology to curb the widespread phenomenon of carjacking by remotely disabling the engine. However, the real boost to telematics was provided by the combination of mobile telephones and internet services with every successive generation of connectivity adding to the performance and efficiency.

Telematics is widely associated with automotive applications. Image by Freepik

Telematics – Not Just Automotive
Even as telematics is widely associated with automotive applications, it has also been adapted for various other sectors, especially in logistics, healthcare and agriculture. The following sectors make extensive use of telematics even as some relate invariably to the automotive part of these sectoral services:
  • Fleet Management Services: For operators of large fleets of trucks, buses and delivery vehicles, telematics are of great help in planning and execution of schedules, selecting the optimum routes and monitoring driver conduct, which results in improving overall efficiency.
  • Insurance: Insurance companies have been quick to use telematics to offer special incentives in the form of customised insurance packages based on individual driver behaviour and vehicle data by assessing risk behaviour.
  • Healthcare: Perhaps the best use case of telematics, in healthcare, it is used for remote patient monitoring and telemedicine. With wearable devices and sensors facilitating real-time monitoring and timely interventions, it is possible to treat patients remotely.
  • Construction Equipment Monitoring: This is actually an extension of telematics in automotive applications but with a wider scope of tracking equipment usage, maintenance schedules and monitoring of idle time of the machinery. The result is optimum operations, reduced downtime and improved efficiency.
  • Agriculture: With the increased mechanisation of agriculture telematics is the right tool for monitoring farm equipment, maintenance and usage, much like construction equipment. Optimising water use in irrigation is an added advantage.
  • Utilities: This is an area which touches every citizen and the use of telematics by utilities – water, gas and electricity – goes a long way in billing, maintenance services and tracking and predicting failures.
  • Logistics and Supply Chain: The memories of Covid and the disruption of supply chains is all too fresh in most minds even if a few have forgotten. Real-time tracking of shipments, locating lost consignments, and identifying bottlenecks – telematics can play a critical role in the efficient movement of goods.
  • Public Transportation: Those using public transportation can vouch for the efficacy of telematics in improving user experience in terms of schedules, arrival and departure times and much else, giving a seamless experience.
  • Energy Management: If utilities take care of the consumer end, for energy companies, the added advantage of telematics is in monitoring of power generation or gas production and distribution, eliminating system inefficiencies, minimising distribution losses by plugging leaks, etc.
  • Asset Tracking: For enterprises, logistics and supply chain is only part of the story. Tracking of assets – plant and machinery, static and mobile equipment is equally important and impacts the performance and profitability, with telematics binding operations together.
  • Mining: This is a vast area literally and metaphorically, with assets spread across huge terrain that is often inaccessible. The use of telematics connects assets, monitors equipment and also tracks the movement of man and material, with real-time information always available.
  • Telemetry in Sports: Everyone today is aware of the extremely high competition in sports with split-second winning margins and consequent heartbreaks for those who fail to make the cut. Wearable sensors, health monitors, etc., facilitate the smooth and safe conduct of sporting events thanks to telematics.
The above examples make it obvious how telematics play a distinct role in various industry segments by making effective use of data for decision-making, which in turn leads to increased efficiency, safety and performance. Little surprise then, that telematics fits like a glove on the emerging smart cities ecosystem globally. Modern smart cities are driven by technology and telematics is right at the centre of this revolution, but more of that, later. At the moment, it would be of interest to understand the origins of the smart city concept.

The Evolution of the Smart City Concept
The term smart city was coined by IBM in 2014, but the concept originated in the late 1960s in the US when the cities-based organisation Community Analysis Bureau began using computerised databases of citizens to serve them better. This was done to study the demographics, housing conditions and civic services in different cities and localities, in order to improve the quality of life in general, and provide emergency services and initiate relief measures in case of civic strife or natural calamities. Gradually, the concept evolved in tandem with increasing trends in urbanisation as cities attracted more and more people and there was a growing need for more efficient and sustainable urban development. Today, smart cities represent a paradigm shift in urban living, aided in no small measure by various digital technologies, data analytics, and connectivity solutions to address the many challenges that defy solutions by human intervention alone.

One of the key aspects of smart cities is the optimised use of available resources. In general, the traditional city administration with dated methods and distribution channels is largely ineffective due to the many deficiencies that have crept into the system. To optimise anything, the beginning has to be made by measuring all the parameters such as power quality and state of transmission and distribution networks, state of water pipelines, quality and accuracy of metering, etc. Once this is done with the help of advanced sensors and monitoring systems, the cities can manage energy and water supply more efficiently, plugging the leakages. For example, smart grids not only ensure better management of electricity distribution, it also minimises waste if not eliminating it altogether. The same is true of water supply, where proper monitoring and detection of inadequate pressure and leakages prevent unnecessary loss of a precious resource. Such optimisation not only conserves resources but also reduces the environmental footprint of cities, contributing to sustainability efforts. In the process, it also helps consumers by reducing the cost of utilities.

Another important aspect of modern cities is transportation – the road networks, metro infrastructure and various mobility options between private vehicles and public services. Traffic congestion and the resultant pollution are obvious bottlenecks made worse by inadequate public transportation services. Smart cities need smart transportation solutions and many have evolved over the years. Gowing electrification of mobility – the metro services and tram carriages run on electricity as do an increasing number of private vehicles. Authorities today resort to intelligent traffic management with real-time information from the vehicles on the road to ease traffic congestion by keeping all drivers on a particular stretch informed about alternate routes, or caution them about delays. Another measure is encouraging carpooling, which is also aimed at reducing the number of vehicles on the road.

Next in importance on the smart cities agenda is public safety and security, which is achieved by extensive electronic surveillance systems. Extending far beyond the scope of traditional CCTV cameras, the smart city surveillance network encompasses smart lighting, advanced sensors, IoT devices, facial recognition systems, AI-powered analytics and predictive algorithms that form a seamless system of surveillance, enabling real-time data on traffic conditions, public places and environmental conditions, etc. This facilitates quick response in emergency situations. Besides contributing to safety measures, smart lighting also helps conserve energy by adjusting brightness levels to need-based requirements.

The emerging smart cities ecosystem connected by telematics. Image by evening_tao on Freepik

Perhaps the most significant part of the smart cities initiative is citizen engagement and the digitalisation of administrative services in civic bodies. With systematic metering and billing of utilities, there is transparency and accountability. Online services with user-friendly interfaces on mobile devices empower citizens to access information without visiting any office and in general participate in decision-making by providing feedback to the municipal authorities. Such initiatives also inculcate a stronger sense of community participation and responsibility, taking ownership of the civic affairs in a way, contributes to the overall development of the city.

Finally, smart cities also encourage innovation and economic growth by wider community participation in civic activities. An empowered citizen also becomes a responsible, environmentally conscious citizen conserving resources and avoiding excesses.

Role of Telematics in Smart Cities
With the proven efficacy of modern telematics – the amalgamation of advanced communication and information technologies – the technology plays a crucial role shaping smart cities that are enhancing various aspects of urban life. Following are the main areas where telematics provide the basic blueprint for the development of smart cities:

Traffic Management: Modern cities are thriving places of people engaged in business and commerce, and for that very reason travelling within the city for a myriad of reasons besides the basic need for commuting to respective places of work. While every city has a basic public transport system in place, a large number of people travel by own vehicles and growing urbanisation means traffic often becomes unmanageable. The smart city solution is twofold:
  • Real-time Traffic Monitoring: Real-time data collection with the help of telematics of the number of vehicles on the road, the traffic hotspots causing congestion, providing information on alternate roads, etc., for optimised traffic flow.
  • Predictive Analysis: With real-time analysis of current data and comparison with historical data for specific routes, smart cities are in a better position to predict traffic patterns and initiate measures to decongest the bottlenecks, easing the flow of vehicles.
Public Transportation: A long-established system of transport in urban areas for mass movement of people, public transportation is even more important in the smart city scheme of things to improve the quality of life. This is achieved by:
  • Real-time Tracking: By providing accurate information on movements of metro trains and municipal buses, telematics allows for real-time tracking of public transportation, helping commuters plan their journeys more efficiently.
  • Route Optimisation: Smart cities use data made available by telematics to rationalise public transportation routes, improve frequency of trips during peak hours and reduce overall travel times.
Parking Solutions: Vehicle owners driving around cities know how severe the space crunch for parking is with the limited slots already occupied. While dedicated mechanised parking facilities have sprung up in response, telematics help them connect with the motorists.
  • Smart Parking: Smart parking systems that guide drivers with the help of telematics to the nearest available parking slots, avoiding traffic congestion and the resulting emissions from idling vehicles.
  • Payment Integration: A seamless, integrated payment interface with mobile apps facilitates convenient and cashless parking payment solutions.

Emergency Services: Accidents, criminal activities, medical emergencies are routine happenings in city life. Instant action and remedial measures in what is described as ‘the golden hour’ in medical parlance can save lives. This is exactly what telematics can provide in smart cities – a quick response that activates emergency services by providing real-time information about such incidents.

Environmental Monitoring: Air pollution in cities – mainly vehicular, industrial, construction and garbage disposal – is a serious health hazard. Besides air pollution, cities also suffer from noise pollution. Measuring pollution levels is the first step for initiating remedial actions:
  • Air Quality Monitoring: While data of vehicular pollution and that of construction machinery is captured at source, sensors monitor pollution from other sources via telematics to help monitor and analyse air quality data, the results of which determine the course of action against pollution in order to improve environmental conditions.
  • Noise Level Monitoring: Mainly a result of construction and building activity, here too sensors connected through telematics monitor noise levels, which in turn helps restrict the offending machinery from operating at all hours.
Infrastructure Upkeep: City infrastructure needs periodic maintenance, especially the state of the roads and bridges, for signs of unusual wear and tear and damage. For example, a study done by the Michigan Technological University in cooperation with the Center for Automotive Research and the Michigan Department of Transportation, made use of remote sensing technologies to assess and monitor the condition of bridge infrastructure and improve the efficiency of inspection, repair, and rehabilitation efforts.

Smart Grids & Water Supply: Another important aspect of smart cities is energy and water supply and distribution, utilities that service the citizens. Telematics helps monitor and manage water and energy consumption, contributing to the development of smart grids that enhance energy efficiency in cities and supply metered water with appropriate conservation measures.

Waste Management: Mountains of trash is a serious side effect of modern lifestyles where everything comes packaged, mostly in plastic and other non-biodegradable materials, a serious problem for smart cities.
  • Efficient Collection: Planning is the key to optimise waste collection by rationalising the routes to reduce vehicle use and fuel consumption in order to reduce the carbon footprint while raising the efficiency of waste management operations.
  • Monitoring Fill Levels: Sensors are used to monitor the fill levels of waste containers, optimising collection schedules.
Public Safety: The importance of safety can never be overemphasized and the law enforcement agencies are always on the job. Technology plays an important role in this as public places are equipped with smart surveillance systems that continuously monitor streets and other public spaces for unusual activities. The footage is analysed by AI-based tools to detect unusual activities that trigger immediate response. Telematics plays an important role in bringing together all the areas under a common platform, facilitating quick decision-making that helps city administrators.

Telematics is facilitated by the combination of smartphones and the internet. Photo by Henry Marsh, Pexels

Telematics – A Growing Market
Traditionally associated with automotive applications, telematics, as seen in the preceding paragraphs, has applications beyond automotive in many other areas. While the primary focus of telematics remains the automotive sector which is witnessing rapid advances in the connected vehicles era, smart cities are emerging as a major user of telematics. This is obvious when comparing the growth of telematics exclusively in the automotive field versus the overall growth of telematics including other industry segments. A word of caution though – when it comes to market reports rarely do two agencies agree on the estimated numbers and at times the differences in figures are too far and wide raising doubts about the datasets used.

For example, according to a recent report by Market Research Future, the telematics market industry is projected to grow from USD 42.6 billion in 2023 to USD 133.2 billion by 2032, at a compounded annual growth rate (CAGR) of 13.5% during the forecast period (2023-2032). However, for the same period, Custom Market Insights puts the figure for 2023 at USD 59.21 billion, which is projected to reach USD 172.4 billion by 2032. Despite such variations, most agencies project a healthy market growth for telematics over the next decade.

When it comes to the use of telematics in smart cities, various players are involved from different sectors, which include government bodies that coordinate the various initiatives, technology companies, telecommunications providers, and infrastructure developers. Some of the major players in the smart city telematics field from the different sectors mentioned above include:

Government bodies and municipalities: Various municipal governments worldwide are investing in smart city initiatives, deploying telematics systems for transportation management, waste management, public safety, and more. Government agencies often collaborate with technology providers to implement smart city projects.

Technology companies

  • IBM: A major player in developing software for smart cities, IBM provides various solutions including IoT platforms, data analytics, and cognitive computing. The Intelligent Operations Center is part of the IBM Industry solutions software portfolio for smart cities.
  • Cisco: As one of the pioneers of the smart city concept over the past several years, Cisco is partnering with cities, communities and governments around the world. It offers networking infrastructure and solutions for smart city initiatives, including IoT, security, and data management.
  • Siemens: At the forefront in creating sustainable and efficient smart city infrastructure, buildings, and industries, Siemens provides smart city solutions ranging from transportation systems and building technologies to energy management, intelligent power distribution solutions, and SCADA systems for utilities management such as water, gas, and electricity.
  • Microsoft: With a worldwide network of fast, efficient, and secure data centres, Microsoft ensures better performance through improved security and protection of city data, apps, and infrastructure. The company offers cloud-based platforms and services for smart city initiatives, including Azure IoT and data analytics solutions.
  • Huawei: One of the key attributes of a smart city is efficient transportation, Huawei plays a significant role in optimising urban mobility. Through the use of IoT sensors and AI-driven analytics, Huawei's solutions enable intelligent traffic management, besides providing smart city solutions focusing on IoT, cloud computing, and digital transformation.
  • Google: Despite the failed experiment of the large-scale project in Toronto, Google offers various technologies and platforms for smart city applications, including Google Cloud and Google Maps.
Telecommunications providers
  • Verizon: Offers IoT solutions and connectivity services for smart city applications, including smart transportation and public safety.
  • AT&T: Provides IoT platforms and connectivity solutions for smart city projects, including smart grid, traffic management, and environmental monitoring.
  • Vodafone: Offers IoT connectivity and solutions for smart city applications, including smart metering and urban mobility.
Infrastructure developers
  • Schneider Electric: Provides infrastructure solutions for smart cities, including energy management, automation, and sustainable building technologies.
  • ABB: Offers technologies for smart grids, transportation systems, and industrial automation, contributing to smart city developments.
  • Bosch: Provides smart city solutions encompassing mobility, energy, and building technologies.
  • General Electric (GE): Offers smart city solutions focusing on energy management, lighting, and digital infrastructure.
Besides, there are a number of startups focusing on specific aspects of smart city telematics, such as urban mobility, environmental monitoring, and citizen engagement. These players often collaborate and compete in the smart city space, working together to create innovative solutions for urban challenges. Additionally, research institutions and academia play a role in advancing smart city technologies through research and development initiatives.

A great sci-fi looking train station. Photo by Tim van der Kuip on Unsplash

Summing Up
Automobiles – electric vehicles to be more specific – are going to be at the centre of the emerging smart cities ecosystem connected by telematics. Singapore, for example, is leveraging electric mobility as the key component of its urban transportation ecosystem with a widespread network of charging infrastructure integrated with smart grids, intelligent traffic management and smart parking. The smart city infrastructure will be focused on sustainable transport solutions equipped with V2X technology where vehicles can communicate with each other, infrastructure, and even pedestrians, besides connecting with environmental monitoring and emergency response services. Above all, the smart cities ecosystem relies on a strong public-private partnership, with the involvement and close cooperation of all stakeholders.


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