A Grand Internet Vision for Saudi Economic City

Saudi Arabia's "smart city" in the desert, King Abdullah Economic City, will boast the best Web technology money can buy

You can't accuse the people behind King Abdullah Economic City, the vast metropolis rising out of the desolate sands of western Saudi Arabia, of thinking small. Once completed by 2020, the estimated $26 billion project will include a seaport and industrial park that will be among the largest in the world, a huge sports stadium, a university, and a shopping mallnot to mention 260,000 apartments, 56,000 luxury villas, and 120 hotels. And tying it all together will be the best Internet set-up money can buy. "We benchmarked [the plan] against the best in the world on every indicatornot against the top 10," says Ahmad Al Yamani, who is responsible for the so-called smart city.

For starters, there's the basic Internet bandwidth. Every home and business in the city will get links of least 100 megabits-per-second, on par with world-leading rates available in Japan. But many will have access to up to one gigabit-per-second—roughly 1,000 times faster than the average connection in the U.S. Customers will be able to choose from various plans, up to this maximum.

More interesting is what those high-speed connections will carry. With help from Cisco Systems (CSCO), the developer of the city—Emaar, the Economic City, a subsidiary of real estate developer Emaar Properties—plans to offer a slew of services to residents and businesses. Consumers will be able to choose from basic TV, Internet TV with all the on-demand bells and whistles, or possibly high-definition videoconferencing on their big-screen TVs and PCs. A dozen other services will be available from the city at the click of a mouse, from basic utilities to home automation.

Holistic Vision

Visions of a smart city have been offered before. What sets this one apart, though, is how Emaar hopes to deliver digital services. Given the opportunity to build something from scratch, Emaar wants all of its online services to be part of a single easy-to-use system. That way, consumers can pay for a vast array of services—movies on demand, the monthly air-conditioning bill, even a driver's license renewal fee—on one bill.

What's more, they'll be able to pay those bills from nearly anywhere in the city, since the system will encompass both wired and wireless networks, with connected devices in stores, parks, libraries, offices, and on some streets. Personal records of people who avail themselves of these municipally offered services will be kept in one place as well. While privacy issues need to be worked out, the project's backers say this could be useful for health-care purposes. For example, a paramedic could easily gain access to a patient's medical history and quickly contact his family doctor.

Businesses will also be able to tap into this infrastructure. Emaar's goal is to take the tech headaches out of opening up an office. Rather than build a data center and assemble an in-house IT staff, a business could outsource much of this by reserving space and various services doled out from the city's data center. Details are sketchy, but in essence the city would be getting into the so-called cloud computing business for companies with basic needs; others may still want to hire a tech outsourcer or use Web services such as those offered by Amazon.com (AMZN).

All the city's services—for both consumer and business—will have a common look and feel. Once a resident learns how to use the system at home, he will know how to use the one in kiosks around town or in the office. And there will be a single customer service operation to call when things don't work. "It's all about economies of scale," says Omar Al-Khudairi, a senior director of Emaar. Besides handing out contracts to build the infrastructure, he says the plan is to hire a large international carrier that will run the entire operation as a managed service.

Dual Purpose

Emaar officials believe that for the city to prosper, it must be truly metropolitan from the start. "A lot of countries have failed [with megaprojects] because they only sought to attract businesses and become industrial parks, or only residences and became weekend resorts. We want to attract both," says Al Yamani, who works for the Saudi Arabia General Investment Authority, the government agency charged with developing and attracting investors to build this and three other new cities.

For Cisco, the project is turning into a mixed blessing. The company has spent two years helping Emaar design the city, which may end up requiring $250 million worth of networking gear. Cisco also set up one of its Networking Academies training centers. But when it came time for Emaar to hand out the first contract, an $86 million deal to build the basic communications infrastructure, Emaar chose Ericsson (ERIC). The Swedish company's bid included some use of a less expensive technology called a G-PON, which lets multiple locations share a single fiber-optic link to reach less densely populated neighborhoods. Cisco was proposing a pricier fiber-to-every-home approach. Ericsson also had the edge, Al Khudairi says, because it has experience not only at providing technology but at operating it as well. "Cisco is a products company," he says.

Cisco may yet win substantial business. Al Khudairi says Ericsson is likely to choose Cisco's massive CRS-1 core router as part of its network. He says only 10% of the networking business has been handed out so far. "We still have a good relationship with Cisco…. I wouldn't call this a major loss for Cisco," he says. Not a major victory either, at least for now.

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