Mike Zeto, head of AT&T’s smart cities business, reported municipal interest in IoT solutions is growing, but speculated changes will need to be made across policy, procurement and funding processes to effectively achieve scale.
Despite the progression of IoT technology, Zeto told Mobile World Live scale remains a challenge: “The policy needs to change, the procurement models need to be different and there has to be funding” to overcome the hurdle, he said.
In particular Zeto said changes to policy – including the permits process – will be necessary to coordinate and enable large-scale IoT builds. Zeto added: “to coordinate who is going to put what up, at what time and get the permits for it and get the money for it and get the people to do it is a heavy lift.”
In other parts of the world, Zeto said funding for smart cities projects is supplied by the government. But in the US, he revealed the government funding stream slows to a trickle as money is passed from the federal to state and municipal levels and encumbered for other uses along the way. So, instead of receiving government dollars to launch smart city projects, Zeto said funding is being supplied by third-party sources interested in generating savings or new revenue streams.
For example, Zeto said AT&T originally worked directly with the City of Atlanta on a smart lighting project, but ultimately delivered its first implementation of the solution through a collaboration with utility company Georgia Power.
Looking ahead, Zeto said utility companies will continue to be critical partners in achieving smart city scale due to the massive amount of infrastructure they control.
Zeto noted the lack of funding is forcing changes in the way municipalities conduct their procurement process. Rather than just seeking to price out a given service with a formal bid request, Zeto said “what you’ll see the city start to do is not just want to pay for services, they’ll ask for ideas around joint ventures and public private partnerships and alternative funding options.“
He added municipalities are looking to exchange value where possible, which is pushing third party companies like AT&T to consider alternative business models where revenue isn’t generated upfront.
“We’re not always going to get a dollar the day we sign a contract in return for a service. It may come over time, it may come through advertising dollars, through the ability to leverage aggregated anonymised data or through some portion of savings we bring to the city through energy efficiency.”