The study leaves little doubt that municipal wireless is destined to grow at rapid rates in the foreseeable future despite lingering questions surrounding the technical and political challenges. It predicts that the U.S. market will enjoy a compound annual growth rate of 134 percent between 2004 and 2007 and will exceed $400 million by 2007 as more municipalities, including larger cities like San Francisco and Portland, embark on wireless initiatives.
Esme Vos, founder of Muniwireless.com
Vos produced the report to fill what she saw as a growing need for a comprehensive picture of the municipal wireless market. "Since I began following this industry more than two years ago, everyone has struggled to get a handle on just how big this market really is, and what the market opportunity represents for companies building and deploying wireless networks for municipalities," Vos said. "In the last year, so many people have asked me if I knew of a market report out there and there wasn't one I could point to. I had been waiting for Jupiter and Gartner Group to do it, but after hearing the question so often, I finally decided to do it."
While it is still unclear what the market impact will be of major technology players such as Intel, Cisco, Microsoft and Google as they move toward more wireless emphasis, the study does make it clear that municipal wireless has gained critical mass. Other key findings include:
* The top application for current municipal wireless networks is public safety (police, fire, emergency services). Just over half of U.S. municipalities that have deployed municipal wireless have done so for public safety.
* Many municipalities are starting their "unwiring" efforts in an attempt to reduce skyrocketing telecommunications costs. But small municipalities are often driven to offer inexpensive broadband access to residents and businesses that are typically underserved by the large incumbent communications carriers.
* Since the majority of municipal wireless spending will focus on infrastructure build-out for the next several years, product vendors will be well positioned to capitalize on demand for their products. However, that infrastructure is deployed, applications developers are going to be the most sought-after technology partners.
Additionally, the study notes that adoption of important industry standards, such as the next generation of Wi-Fi (802.11s) and WiMax, could spur even higher growth rates for
the market, if those standards are widely adopted by technology vendors early next year.
Growing Cities Most Active
Behind the statistics given in the report is a picture of municipalities turning to wireless technology to meet financial challenges as well as improved service to citizens. "Actually the most interesting thing I found, which might not have been fleshed out in the report enough, is that the cities that are most keen on deploying city-wide Wi-Fi are the fastest growing cities in the U.S.," explained Vos. "Because of budget constraints, these cities can't just add personnel to their municipal government. They can't just go and hire another 25 cops. A lot of these cities are strapped for cash and there are budget problems at the state and local level.
"So they are saying, 'Well if our city is going to grow three times in 7 years, we need to make sure we can still deliver services. But we need to put a cap on costs. And we need to be more efficient.' Citywide wireless is the way to do it, as a platform or infrastructure for all kinds of city services -- the police, the building inspectors, remote monitoring of facilities. So that's why these departments are really keen on wireless."
As far as applications, public safety is the leading driver for municipal wireless deployments according to Vos. "When you have a city-wide network, what the police want to do is to put up a lot of video surveillance cameras," she said. "That way, the cops don't have to drive around all the time and they can focus on the hot areas where there is a lot of crime and where they really need a physical presence. Additionally, capturing a crime on video becomes part of evidence that the prosecutor can use to help secure a conviction."
Police, she added, are also interested in the traffic management possibilities, using video to rapidly locate bottlenecks or accidents. They want to be able to file reports from the field. And finally, many police forces are still operating on old CDPD (Cellular Digital Packet Data) networks that operate at dial-up speeds and are not conducive to downloading or uploading photos and other information from state and national databases.
Estimates May Be Conservative
Vos emphasized that the projections in her study may be on the conservative side. "The fact that now cities are deploying wireless networks means there will be more applications developed," she said. "That's why the numbers that I gave for 2007 may be on the low side. They didn't take into account the applications that have yet to be written. I personally believe there will be even more spending on that once the infrastructure is in place. In the report, I really only took into account spending on infrastructure -- connectivity, roaming, billing, the nodes, and the backhaul. I excluded lots of applications because they are not there yet."
Vos does acknowledge that the conclusions reached in the report might alter based on events over the next couple of years. "If there is a potential stumbling block here in the United States, it would be legislation primarily," she added. "The telcos are not going to stop trying to get anti-municipal broadband bills passed at the federal and state level. In the last legislative session in various state legislatures, the pro-municipal people managed to defeat just about all of these bills. Nevertheless, that is still the big question mark in my mind, the cloud that continues to hang over this whole thing."
More information on this report is available at Muniwireless.com.
