Impact Analysis of Covid-19
The complete version of the Report will include the impact of the COVID-19, and anticipated change on the future outlook of the industry, by taking into the account the political, economic, social, and technological parameters.
The smart railway is a system of interconnected and instrumented system that provides several solutions. Smart railway systems are comprised of software, hardware, and other services that redefine and make intelligent use of rail assets and rail network communication. This is done by combining information and communication (ICT) technology with smart transportation systems. Moreover, it involves information integration, data modeling, and data analytics that facilitate to impart strategic and operational decision making. Moreover, smart railway allows sharing of information across the enterprise and with different partners including system integrators, rail operators, solution and service providers, passenger government agencies, etc.
The global smart railways market is estimated to be valued at US$ 21,988 million in 2021 and is expected to exhibit a CAGR of 19.9% over the forecast period (2021-2028).
- The rail network operators in developed parts of the world are actively investing in the development of analytics systems such as cloud-based systems. Some of the reason of adopting rail analytic systems are Timely Travel Service, Time-table Management, Capacity Optimization and Predictive Maintenance.
- For instance, UK-based Network Rail is working with Deloitte MCS Limited, to develop a cloud-based data analytics system which saves 1.3m hours of manual data processing and leverage the railway signaling systems to deliver 92.5% public performance measure (PPM).
- In November 2019, Alstom signed a ten-year maintenance contract with SBB, the Swiss national railway company, to maintain SBB’s European Train Control System (ETCS), the signaling and control component of the European Rail Traffic Management System (ERTMS).
- In April 2019, IBM announced a collaboration with Sund & Bælt to assist in IBM's development of an AI-powered IoT solution designed. The collaboration will help to prolong the lifespan of aging bridges, tunnels, highways, and railways. The new industry solution, IBM Maximo for Civil Infrastructure, also extends the IBM Maximo portfolio to help organizations manage, monitor, and administer their infrastructure assets.
Western Europe held dominant position in the global smart railways market in 2020, accounting for almost 1/3rd of market share in terms of volume, followed by North America and Asia Pacific Excluding Japan hold 25.2% and 19.4% of market share, respectively.
Figure 1. Global Smart Railways Market Value (US$ Mn), by Region, 2020
Global Smart Railways Market: Drivers
Rising government support in railway infrastructure is expected to drive growth of the global smart railways market during the forecast period. Governments of various countries are focused on increasing budget for railway infrastructure, in order to incorporate novel technologies and offer advanced services. For instance, in 2015, the Government of India planned provisions for e-governance and information technology initiatives railway starting from SMS alert service and provision of Wi-Fi at every railway station to digitalized mapping of rail-land. Considering the importance of the smart railway concept, India framed the budget as “Technology-Enabled Traveler Centric.” Some features include free Wi-Fi would be made available at 400 railway stations across the country, CCTVs to be introduced in select trains and suburban trains for ensuring women safety, and the Ministry of Urban Development in India plans to invest US$ 20 Bn in metro rail projects. Moreover, the Government of China’s five-year plan for 2006-2010, US$ 182 Bn were allocated for the development of railways in the country between 2010 and 2020. The Romania government intends to allocate US$ 639 Mn for railway and metro infrastructure projects in 2016.
Increasing urbanization and population across worldwide is expected to propel the global smart railways market growth over the forecast period. Urbanization and population are increasing rapidly across the globe. According to the United Nations (UN) Department of Economics and Social Affairs, urban areas would account for over 60% share of the total world population in the near future. As a result of this, the need for smart railway operators who can provide key solutions to keep rail passenger traffic and congestion under control.
Smart Railways Market Report Coverage
||Market Size in 2021:
||US$ 21,988 Mn
|Historical Data for:
||2017 to 2020
||2021 to 2028
|Forecast Period 2021 to 2028 CAGR:
||2028 Value Projection:
||US$ 78,400.0 Mn
- APEJ: (Australia & New Zealand, China, India and Rest of APEJ
- Eastern Europe: (Poland and Rest of Eastern Europe, Russia)
- Latin America: (Brazil, Mexico and Rest of Latin America)
- Middle East & Africa: (GCC, Rest of MEA, South Africa)
- North America: (Canada, US)
- Western Europe: (BENELUX, France, Germany, Italy, Nordic, Rest of Western Europe, Spain, UK)
- By Device: Rail Sensors, VSC, Smart Cards, Networking & Connectivity Devices, Others
- By Services: Professional Services, Cloud Services, Integration & Implementation Services
- By Solution: PIS, RTMS, ASMS, Smart Ticketing System, Rail Operations Management System, Rail Communication & Networking System, Others
Siemens AG, Ansaldo STS, Huawei Technologies Co. Ltd, Alcatel-Lucent, Asea Brown Boveri (ABB) Limited, Alstom SA, Indra Sistemas, S.A., Cisco Systems, Inc., Bombardier, Inc., General Electric, IBM Corporation, and Hitachi Limited.
- Rising government support in railway infrastructure
- Increasing urbanization and population across worldwide
|Restraints & Challenges:
- High cost of installing and integrating smart systems
- Security and safety challenges
Global Smart Railways Market: Opportunity
Growing preference for rail transport over air & water transport due to enhance efficiency can provide major growth strategies. A UIC study shows that rail transportation is, on average, two to five times more energy-efficient as compared to road, water, and air transport. Oil scarcity and rising fuel prices could lead to the rise in adoption of more efficient and safe railway transportation in the long run.
Technological advancements have led people to become dependent on mobile. The methods of payment have evolved over the years with traditional payment methods being replaced by card or mobile payments. According to Coherent Market Insights’ analysis, by 2025, over 90% of railway transactions globally would not involve the use of paper tickets. Moreover, Greater London, now, has a fully integrated contactless payment system for railways that comes under the responsibility of TFL (Transport for London).
Key players in the market are focused on mergers and acquisitions, in order to enhance the market presence. For instance, in 2012, Siemens AG acquired Invensys Rail for around US$ 2.2 Bn. In 2014, Alstom SA acquired GE Transportation’s rail signaling business to strengthen in presence in smart rail market. Moreover, in July 2014, Herzog Technologies Inc., partnered with Lilee Systems to provide Positive Train Control (PTC) system.
GSM-R solution is considered highly reliable for high-speed railways. This technology is highly effective and efficient in improving rail network safety and comes equipped with value-added functions and provides greater coverage than analog radio networks. For instance, in 2010, Huawei Technologies Co. Ltd provided the GSM-R solution for Australia RailCorp’s radio communication upgrades to the metropolitan rail network in New South Wales (NSW). Moreover, in 2014, Nokia introduced the GSM-R (Global Systems for Mobile Communication–Railway solution), which was intended to enable rail operators to manage 40% more train traffic and, thereby, enhance the safety and security of passengers.
Figure 2. Global Smart Railways Market Share, By Services, 2020
Key Takeaways of the Graph:
- The Integration & Implementation Services (By Service Segment) held dominant position in the market and accounted for 2% share in the global smart railways market in 2020. The segment is expected to reach US$ 36,221 million in 2028. This is owing to fact that building a new generation and integration & implementation of information infrastructure enhances of the ability of railway intelligence development.
- The Professional Services and Cloud Services Segment followed by Integration & Implementation Services and accounted for the market share of 9% and 17.9% in the global smart railways market in 2020.
Market Dynamics- Restraints
High cost of installing and integrating smart systems are expected to restrain growth of the global smart railways market during the forecast period. High cost of installation and integration of a smart solution, followed by its continuous operation and maintenance is a major restraining factor. When the system is implemented, the management is required to train its staff, in order to operate the software thereby leading to additional costs. The maintenance and software upgrades for the systems are also an additional burden for the railway company operators.
Security and safety challenges regarding a large amount of data generated are expected to hamper the global smart railways market growth over the forecast period. Smart railway includes a number of technology-related challenges, which include consolidating different systems in place into a single system. The challenge is to manage the critical and large amount of information generated whether it is from smart ticketing, passenger information or any other system.
Key players involved in the global smart railways market are Siemens AG, Ansaldo STS, Huawei Technologies Co. Ltd, Alcatel-Lucent, Asea Brown Boveri (ABB) Limited, Alstom SA, Indra Sistemas, S.A., Cisco Systems, Inc., Bombardier, Inc., General Electric, IBM Corporation, and Hitachi Limited.
- June 2019, Siemens AG supplied propulsion system to Indian Railways for its electromotive locomotives from 6,000 HP and 9,000 HP as a part of its rail electrification initiative.
- Major companies in the market are involved in product and service launches, in order to enhance the market presence. For instance, in September 2018, Huawei Technologies Co. Ltd introduced ICT solutions for cloud-based railways at InnoTrans 2018.