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Case study: The connected bus shelter

Within the context of a smart community, bus shelters equipped with ultra-broadband connections can come alive, improve user experiences, and enable new business opportunities

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Waiting for the bus has never been so productive
Waiting for the bus has never been so productive

For a long time, bus shelters have remained virtually unchanged. Typically, they have provided a sitting area that can be used while awaiting transportation, as well as shelter from the elements and static advertising for both those waiting and passing by.


Historically, shelters have been a cost to a transportation authority. An initial capital investment was required to build them and some level of on-going expenditure was needed for maintenance. Documents published in the US suggest that shelters cost from $2,000 to $15,000 USD to build, and $500 to $30,000 USD annually to maintain, depending on size, location, degree of vandalism, and shelter quality. These costs have been offset by revenue from advertising, but they have still been net costs to the owners.


Beginning about 15 years ago, many communities, such as Chicago, IL, in the US began to outsource ownership of the shelters to advertising companies. This new outsourced business model relieved the transportation authority of the initial capital expenditure (CAPEX) and annual operating expenditures (OPEX), and provided an annual revenue stream for the leased locations. These shelters went from becoming a cost to a profit center.


The advertising companies benefited by being able to pocket the difference between the costs associated with building, maintaining, and leasing the locations and the ad revenue they generated. So, a precedent was set for transportation authorities to relinquish ownership to third parties for contractual revenue streams from advertising revenues.


The fact that shelters also served as a prime location for revenue-generating advertising offset the costs to some extent. But, the shelters typically did not have a business model beyond simple advertising and did not generate a positive return-on-investment. This is changing. Within the context of a smart community, bus shelters equipped with ultra-broadband connections can come alive, improve user experiences, and enable new business opportunities.


A market trial of new, modern shelters with ultra-broadband connections was recently undertaken in Auckland, New Zealand by the transit authority and a consortium comprising ng Connect members Chorus, Downer, Nokia and Solta. During the trial a survey was conducted to get perspective from users about the features offered and to test reactions to potential future capabilities.


The initial version of the connected shelter set out to test the waters for a ‘next generation’ bus shelter and focused on broadband connection and interactive signage -- capabilities that wouldn’t overwhelm users to begin with. This pilot shelter consisted of a new physical design, Chorus broadband connection enabled by Nokia gigabit passive optical network (GPON) equipment, Nokia service aware routers, interactive, touch screen displays and a user interface (UI) developed by Solta.


During the pilot a survey of users was performed by the Auckland University of Technology (AUT), an ng Connect member, to assess user acceptance and experience associated with this new, more capable shelter.


Among the notable findings of the survey was that, despite the fact that the shelter was trialed for only a short period of time and the features were not really publicised, a surprising number of users actually interacted with the screen and tried out the different content types without any instructions or training. This indicated that users consider interactive displays useful and more features can be deployed to support new business models in future versions.


Some survey questions were aimed at potential future features that could be deployed. Wi-Fi capability had a strong positive response with nearly 85 per cent of users saying they would like Wi-Fi to be available. CCTV at the shelter would make nearly three-quarters of users feel safer, while 44 per cent of users said they would like to be able to transfer information from the interactive display to their mobile devices -- valuable feedback when considering future features and business models.


With the basic functionality used for the trial in place, a next iteration of a connected bus shelter can begin to add the features that are enabled by the Chorus ultra-fast broadband (UFB) connection and the associated business model opportunities.


A foundational revenue generating opportunity lies with mobile service providers. As wireless demand increases in cities, mobile operators must keep up with the traffic and manage the user experience. The bus shelter owner can rent pre-certified mounting space for small cells and offload wireless traffic using the ultra-broadband connection. At the same time, advertising can move from static ads that change infrequently to dynamic ads that change based on contextual information.


Interactive signs can adopt kiosk-like capabilities that enable revenue-generating features. Sensors can be mounted in a similar manner as small cells to enable the collection, analysis, and monetisation of data by allowing access to paying third parties. Alternatively, sensor owners can simply lease the space if they want the data to remain private.


As potential business model opportunities are identified, a broader set of companies interested in owning and operating shelters may emerge. For example, transportation authorities may be able to outsource ownership and let others incur the cost and risk, while they continue to collect a predictable revenue stream. As noted above, an ultra broadband connection to the shelter opens up a whole world of additional revenue opportunities beyond advertising.


Meanwhile, in New Zealand, the ecosystem involved in the trial is interested in exploring additional capabilities and testing the associated business models for the connected bus shelter solution concept. It is also interested in extending the concept in a multi-modal framework to include buses, trains, trolleys, ferries, and other modes of transportation.


*This has been adapted from Nokia’s Innovation 2020 Report

Connected Bus Shelter




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