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Russian transport M2M/IoT market

July 2020

Analytical Report (full version)

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Analytical Report (full version)

Russian transport M2M/IoT market
Russian transport M2M/IoT market
July 2020

Russian transport M2M/IoT market

July 2020

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J'son & Partners Consulting has completed a study of the Russian transport M2M/IoT market. M2M/IoT systems are most widely used in cars and road infrastructure, while their use in rail, water, and air transport is lagging behind.

 

Connected cars

 

According to J'son & Partners Consulting, by the end of 2019, there were about 8.4 million connected commercial and non-commercial vehicles in Russia (15-16% of the existing fleet) and this figure is projected to approach 20 million by 2025 (Fig. 1).

 

Fig. 1. Number of connected cars in Russia, 2010-2025

 

In the B2C segment, the main market driver is still the ERA-GLONASS project, (Emergency Response for Accident) thanks to which the share of connected non-commercial vehicles that are in personal use will continue to grow rapidly (this trend has been observed since 2017). By the beginning of June 2020, the number of vehicles registered in the system exceeded 5.3 million. ERA-GLONASS gives a significant impetus to the development of navigation technologies and intelligent transportation systems (ITS), creates an environment for the formation of new products and services, including monitoring of mobile objects, cargo safety control, high-precision positioning, and trusted execution environments.

 

In particular, on the basis of ERA-GLONASS, there has been implemented a number of services for online transport monitoring with use of satellite navigation equipment and the automated monitoring system ERA, which in its turn was implemented on the basis of cloud technologies and is part of the state automated information system ERA-GLONASS. A new joint pilot project by the JSC GLONASS and Rosselkhoznadzor (experimental stage) is aimed at end-to-end temperature control during the transportation of perishable goods in intermodal transport. Additional potential for the development of IoT-based insurance products is being created through introducing a concept for creating a super service for registration of Europrotocol online, in accordance with national standards that establish requirements for technical control and expand the functionality of the state automated information system ERA-GLONASS. 

 

The main limiting factor for the quantitative development of the ERA-GLONASS project is the slowdown in sales of new cars in Russia that started in 2020 (according to some estimates, by 20-50% compared to last year), due to a decrease in consumer demand within COVID-19 lockdown. The government has included auto retail in the list of sectors of the Russian economy that had suffered from the coronavirus epidemic the most. At the same time, this compensation is negligible due to the secondary market – the cost of equipment and its installation on existing cars is too high for the mass market, and the commercialization of the project is too slow.

 

In the segment of commercial and non-commercial vehicles (fleets of state authorities, municipal services, etc.), the market for satellite monitoring of transport and fuel level still has the largest share. According to J'son & Partners Consulting, the total penetration rate of fleet management technologies by the end of 2019 did not exceed 20%, which indicates the still high potential of this market segment. A separate niche in this segment is occupied by platform vendors that allow to integrate hardware from different vendors. One of the largest players in this direction is the satellite monitoring platform Wialon, which is connected to more than 2.4 million cars worldwide. In Russia, about 1.1 million cars are connected to all versions of the platform (local and cloud), i.e. about half of all cars tracked via satellite.

 

In the segment of fuel consumption monitoring, fuel level sensors with built-in GPS/GLONASS modules and SIM cards are gradually becoming widespread. Combining the main features of the fuel sensor with the monitoring unit allows to get two devices in one at the same time. And this allows to simplify transport monitoring connection systems and reduce the cost of their implementation. Fuel level sensors connected via Bluetooth Low Energy technology (BLE, Bluetooth 4.X) are also presented on the market. At the same time, about 70% of fuel control system installations are made using traditional solutions – GLONASS/GPS trackers and fuel level sensors.

 

Another major segment is heavy-duty vehicle monitoring via onboard devices (“Platon project”). Smaller but rapidly growing segments include security systems connected via cellular networks (GSM alarm systems) and infotainment media systems.

 

In general, the current state of the connected car market in Russia is characterized by a large number of different telematics, navigation, and other systems that are not related to each other. It is expected that the development of the Avtodata navigation and telematics platform will allow in the future to integrate such systems and combine the data generated by them. It is possible that Avtodata in the future will also be integrated with state and subordinate information systems, systems of the Ministry of transport, and other departments, as well as with the systems of other market participants, insurance companies, e-passport systems, etc.

 

Smart road infrastructure 

 

Various intelligent transportation systems (ITS) will be the key areas of transport infrastructure development in big cities and agglomerations in the coming years. Smart roads are expected to significantly reduce the number of accidents, waiting time at traffic lights, and travel time in a whole. According to J'son & Partners Consulting, by the end of 2019, there were about 85 thousand connected road infrastructure devices in Russia (smart traffic lights, photo-video, and weight-and-size control systems, traffic flow sensors, etc.). According to forecasts, by 2025 this figure will increase by 1.5 times and reach 128 thousand. The whole Russian ITS market is estimated at 5-10 billion rubles.

 

Pilot intelligent transportation system (ITS) projects in Russia are being promoted at the state, federal and municipal levels. In particular, Samara oblast is preparing to launch a trial project to create smart roads which can among others be used by autonomous cars. On major roads, there will be intelligent modules connected to systems for photo and video recording of traffic violations, automated weight and size control, as well as automatic road weather stations. Smart traffic control and parking information systems will be introduced on highways. This intelligent transportation system is planned to include a v2x module to provide rapid data transfer between vehicles, road infrastructure, and unmanned vehicles.

 

In 2020, according to the Moscow Center for traffic management, the number of smart intersections will increase from 100 to 500. The Center estimates that public transport has become 20% faster on average at existing smart intersections.

 

Fig. 2. How a smart traffic light system works, Moxa's ICF-1150

 

Significant players of the ITS market are major telecom operators, first of all, Rostelecom (according to some estimates, it may take one-third of the Russian ITS market), system integrators, suppliers of automated traffic management systems, etc. In May 2020, a joint venture Rostelematika was created with the participation of Rostelecom's subsidiaries. Rostelematika plans to use mainly domestic equipment and software. The joint venture will create automatic photo-video recording systems for traffic violations, paid parking lots, automatic weight and size control systems, traffic management systems, weather monitoring, and road condition monitoring systems. In addition, Rostelematika intends to develop solutions for public transport and smart bus stop management.

 

Also in May, it became known that Rostelecom acquired a 51% stake in the Russian automated traffic management system manufacturer VoiceLink which will allow the national operator to strengthen its position in the ITS segment.

 

Water, rail and air transport

 

The Russian IoT market for railway transport is one of the most capacious. IoT is used in systems for rolling stock (locomotives, wagons) and railway infrastructure (tracks, crossings, depots, etc.) monitoring and in personnel control systems. By the end of 2019, the number of connected IoT objects in this area exceeded 22 thousand.

 

The main participant of the railway transport market, JSC Russian Railways, implements the projects “Smart locomotive” and “Digital depot” using IoT solutions. Digitalization prospects are defined by the JSC Russian Railways’ long-term development program until 2025, which includes the “Digital Railway” project; IoT systems, big data processing, distributed registry, digital modeling, and artificial intelligence are also among the priority areas for digitalization.

 

The JSC Russian Railways’ development program has identified the following areas of digital transformation: creating a platform for managing and monitoring freight transport, creating tools for intelligent traffic management, digital modeling, and monitoring of vehicles and infrastructure facilities with IoT based-services.

 

Implementing IoT systems for monitoring movement, condition, and safety of cargo, including in multimodal transport is another promising development area. By the end of 2019, the number of connections of cargo tracking devices (electronic seals, thermal sensors, etc.) was about 3 thousand. The driver of using IoT systems for cargo tracking was the requirement to control transit traffic of sanctioned goods using electronic navigation seals. In 2020 a number of pilot projects in multimodal cargo transportation on rail and road transport, including on the territory of seaports were implemented.

 

As part of the road map approved by the government of the Russian Federation on the formation of a system of transportation and control of perishable goods in June 2020, there was conducted an experiment to monitor the state of cargo in multimodal transportation (transportation of goods in containers on road and rail transport) using sensors for monitoring the cargo state and location. These sensors were connected to the ERA system based on the state automated information system ERA-GLONASS.

 

The development drivers of IoT in water (sea and river) transport are the requirements for equipping vessels with GLONASS navigation equipment, as well as the program for the introduction of intelligent marine transport management systems "Marinet" (as part of NTI).

 

Monitoring of sea and river vessels and fuel consumption control are priority areas of IoT application on water transport. By the end of 2019, about 1.5 thousand vessels were connected. Among the promising areas of IoT are the introduction of cargo tracking systems, modernization of navigation equipment for inland waterways, including light-signaling navigation signs and smart buoys. Previously, it was planned that by 2020, about 160 thousand light-signaling navigation signs would be installed on Russian waterways, of which about 90 thousand were coastal and more than 65 thousand were floating. Smart buoys are manufactured in Russia and combine communication, navigation, and light-optical systems. The block is based on the ERA-GLONASS terminal and the GSM modem developed in Russia. Requirements for creating conditions for the operation of unmanned vessels can become a significant development driver.

 

As for air transport, IoT systems for are not widely used in the Russian Federation and their main development areas are aircraft flight control systems and monitoring of special equipment at airfields for improving safety and reducing vehicle downtime, and the introduction of cargo tracking systems based on the use of radio beacons for cargo navigation and self-service systems at airports

 

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This information note was prepared by the J'son & Partners Consulting. We work hard to provide factual and prognostic data that fully reflect the situation and available at the time of release. J'son & Partners Consulting reserves the right to revise the data after publication of new official information by individual players. 

 

Copyright © 2020, J'son & Partners Consulting. The media can use the text, graphics, and data contained in this market review only using a link to the source of information - J'son & Partners Consulting or with an active link to the JSON.TV portal

 

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Detailed information is presented in the full version of the report:

Russian transport M2M/IoT market

SUMMARY

1.        ROAD TRANSPORT

1.1.      Consumer sector 

1.1.1. Infotainment systems

1.1.2. Insurance telematics (smart car insurance) and remote diagnostics

1.1.3. Search and security systems

1.1.4. Other systems

1.2.      Commercial and public sector

1.2.1. Fleet management systems

1.2.2. Fuel level sensors 

1.2.3. Driver behavior monitoring systems

1.2.4. Remote diagnostics systems

1.2.5. Other systems

1.3. Prospects for creating a self-driving car

2. INTELLIGENT TRANSPORTATION SYSTEM (ITS)

2.1. Sensors (detectors)

2.2. Controllers

2.3. Cameras

2.4. Smart traffic lights

2.5. Parking meters

2.6. Information boards and road signs

2.7. Automated lighting control system

2.8. Automatic weather stations for road safety

2.9. Automatic road accident detection systems

2.10 Road condition management system and subsystem for monitoring the technical and operational condition of artificial structures

2.11 Weight control systems

3. RAILWAY TRANSPORT

4. WATER TRANSPORT

5. AIR TRANSPORT

6. MAIN STATE INITIATIVES AND PROJECTS FOR TRANSPORT

7. MARKET FORECASTS UP TO 2025