Will Smart Parking be the NB-IoT Killer App?

NB-IoTThe outcome of the IoT connectivity standard battle which is in full swing today will hinge on a number of factors. One critical factor is the application of the technology. Applications vary in requirements as well as in barriers of entry. While IoT promises huge economic potential at a macro-economic level, it is a major challenge for any entity, be it investor or service provider,  to assess where to place its investments and focus. Such dynamics are fully evident today at different levels: competition between LPWA and 3GPP IoT standards, and the competition within each camp, for example, between backers of NB-IoT and LTE Cat-m1. So, if applications are so critical, what are some of the leading ones and where one needs to look?

I recently had a chance to take a very close look at one such application: smart parking. This application is leading in NB-IoT trials featuring in seven of Huawei’s carrier engagements. One engagement with China Unicom received the endorsement of Shanghai Disney to deploy the solution (300 deployed sensors). The initial application is to provide indication of spot availability which can be upgraded in the future to include payment and other advanced services such as spot reservation.

Anatomy of a Smart Parking Meter

Anatomy of a Smart Parking Meter.

The elements of smart parking include sensors with integrated connectivity and the control system with backend operator applications that tie into the payment system and the user application. Such systems are not new, nor the reserve for NB-IoT. In fact, there are a few such systems deployed around the globe based on different technologies, either LPWA or based on peer-to-peer technologies. Given this, the essential question on the success of this application will depend on a number of factors that are not related to technology. In the first instance, there is the cost issue which has to be very low. NB-IoT promises sub $5 per sensor module, which can only be achieved through high volumes. To get to volumes, a number of inherent barriers need to be addressed. In this realm, we are still at the early stages of development.

Parking Sensors in the Ground

Parking Sensors in the Ground.

Some smart parking deployments are precipitated by political expediencies and promotional reasons that make for good advertising but fall short on building a sustainable value proposition. So where and how will the technology be used, and who will lead adoption? There are different segments to parking which includes municipalities, private garage operators, and institutions such as hospitals, universities, stadiums and theme parks. Each of these categories have unique characteristics with varying barriers of entry.

For instance, municipalities typically operate on very tight budgets and keep parking fees lower than garage operators. Many have recently spent to adopt a pay-and-display payment systems and many don’t mark parking spots which is required for smart parking. Expenditure on intelligent parking will have to be justified in consideration to a number of factors such as integration with existing systems and improving traffic flow (estimates that 30% of congestion caused by search/cruising for parking). Malls and retail stores have different concerns and view parking as a mean to attract clients. Ease of parking is a major concern – in fact, paid parking would detract from business. Universities on the other hand look to ensure sufficient space is available for staff and students and don’t look to maximize profit from parking facilities in contrast to airports who can extract maximal value for available parking. For private operators with relatively thin margins, the justification and value proposition for smart parking becomes paramount – they typically look for very quick payback period.

In light of these different market segments and needs, there is no one-size fits all in smart parking. Spot identification is a start to be followed by payment, and later in advanced use cases, by adding more sophisticated procedures such as spot reservation or bundling of parking with other services such as ticket purchase for a concert or advertising. But before getting there, there are a number of challenges to overcome: integration of legacy systems and accommodating people without smart phones are such issues that need to be addressed.

Convenience alone will not drive adoption. Scalability is essential for smart parking in order to justify the business case. This entails high reliability to maintain low operational costs. Low module cost is a start, but also low integration costs with existing systems will factor into the equation. With the limits on ability to extract more money from drivers, the business case for smart parking maybe tilted on justifying greater efficiency. As such, the uptake may not be as fast. Still, parking is a numbers game with spots numbering in the hundreds of millions at a global level (e.g. there were 2.9 million parking spaces in Beijing by the end of 2014, but 3.8 million were needed).

About Frank Rayal
Telecom industry management consultant.

One Response to Will Smart Parking be the NB-IoT Killer App?

  1. NB-IoT: D size LiSOCl2 battery + 1/2AA size HLC (supercapacitor) = $15USD in large volume

    Compare it with a Sigfox/LoRa solution using AA or A size LiSOCl2 battery, $1USD in large volume

    NB-IoT and Sigfox/LoRa play in different league

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