Monday 17th February 2020

Who should pay for automated cars’ road infrastructure and where’s the ROI?

Published on April 17th, 2019

Stefano Gastaut, CEO, Vodafone IoT, talked to Annie Turner about 5G, transport megatrends, timing, looking east instead of west for innovation at scale, and national priorities.

Annie Turner: How big an impact with 5G have on IoT in transport?

Stefano Gastaut: 5G is going to bring a number of things, but what is going to be [most] visible is there’s going to be more connected things than people. That’s why there is a lot of political attention all of a sudden — all the discussion around who will build 5G and Huawei — because 5G is all about the infrastructure of countries, about cars, but also about [electricity] and many other things.

AT: And what about 5G specifically regarding transport, where there is such a diverse range of potential uses for IoT?

SG: There are two key ways to split this. On one side, there is enabling the infrastructure for the autonomous car — everything that needs to interact with the car.

The amount of investment in 5G just to cover the main highways and cities is really big. The real question is that it’s not clear when the payback will come, as well as the matter of who pays as there is already the cost of [spectrum] licences and other things. The model for infrastructure investment is not yet straightforward [as] there are a lot of stakeholders.

Stefano Gastaut

My hope is that when 5G comes, there’s a lot more infrastructure investments and we’ll be clearer [about] who has to do what — otherwise it will take ages.

What happens inside the car is the simpler part; things are quite defined, if not there yet they are coming. The car manufacturers invested a lot and 80% of them work with us using 4G to connect the cars. They have an idea of how they want to play the whole mobility challenge. To me the endgame is not the autonomous car, but the car becoming a service.

It’s a business model question. Car makers ask “Do we keep making things, or we start being a service provider?”. It’s most likely going to be the second one, [so] then you need to know the customer versus just making beautiful cars. It’s a very different set-up.

AT: Where are we going to find the space to deploy autonomous cars? Many cities have old, narrow streets.

SG: The technology and 5G is the solution to the problem too. The car becoming a service means that you probably have more than one person in a car a lot of the time, which is the problem today – most cars are almost empty.

I’m pretty sure that we will be soon be able to drive in a way that is safer, but also has less impact on the environment and with less congestion, simply because there will be fewer cars on the road. I am optimistic from this perspective.

AT: Some people are attached to their cars. It’s their private bubble that insulates them from the annoying habits of other people on public transport. Many people buy cars as status symbols and so on.

SG: We are talking about mega-trends and it takes a long time to change. But look at statistics: for instance, the 20 years and below [age group] doesn’t care at all about cars. Car manufacturers are very worried about it. There is a big segment of younger people who don’t care about owning anything, especially not something as expensive as a car.

Other people [want to live] in large cities… We are a family of five with three kids in central London and we don’t have a car. There’s a growing tendency to ask yourself, “Do you really need a car?”.

Annie Turner

For mobility in big cities, I think this [trend] is going to [progress] really quickly. This is partly because regulation will impose more traffic control, so there will be more fines and it will be more expensive to park. This will push people to use things like Uber, which is more environmentally friendly, because there are fewer cars on the road and you only use the car when you need it.

AT: How long will these changes take?

SG: We are talking about trends that probably are going to cover the next ten years to really manifest themselves.

Also, for at least 20 years we have looked west, at Silicon Valley, as the tech reference. Now we should look east, to China, which is going very fast on autonomous cars and will create a gap in both the infrastructure and the car because they manage the infrastructure part in a very top-down way. If the West – Europe and the US – don’t want to fall behind, we need to catch up.

We think of China in terms of manufacturing, but with IoT, 5G and Artificial Intelligence [AI], things are really changing. China is becoming the leader. It will stimulate things to go faster and the cost of things will go down.

Stefano Gastaut, CEO, Vodafone IoT was interviewed by Annie Turner, editor of IoT Transport

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