Strategic Analysis of Communication Based Train Control

Systems in the Western European Urban Rail Market Standardization, Modularity and Capacity Demands Driving Growth

M92D-13

June 2013

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Shyam Raman Research Analyst

Automotive & Transportation

+1 416 495 2686

Shyam.raman@frost.com

Contact The Research Team

Lead Analyst

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Contents

Section Slide Numbers

Executive Summary 5

Research Scope, Objectives, Methodology, and Background 18

Definitions and Segmentation 24

Overview of Urban Rail Signaling 29

Overcoming Challenges in Implementing CBTC 38

Cost Breakdown of Urban Rail Signaling Systems 46

Grades of Automation 51

Communications Based Train Control as Defined by the IEEE 1474 Standard 57

Platform and Track Protection (PTP) Systems 65

Mega Trends and Industry Convergence Implications 75

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Contents (continued)

Section Slide Numbers

Total Market -

• External Challenges: Drivers and Restraints 84

Urban Rail CBTC Market -

• Forecasts and Trends—Communications Based Train Control 92

• Market Share and Competitive Analysis—Communications Based Train Control 102

Case Studies -

• The MODURBAN Project: European Rail Industry's Initiative to Standardize CBTC 108

• CBTC Migration Strategy of RATP, Paris and London Underground 115

• Full System Approach of Ansaldo STS 123

Competitor Profiles 128

Conclusions and Future Outlook 141

Appendix 145

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Executive Summary

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Executive Summary—Key Findings Operational length of CBTC systems in Western Europe is growing at a CAGR of 14.4%.

Denmark and United Kingdom are expected to be the biggest markets for

implementing radio-based CBTC in the forecast period. 1

2 Invensys is going to be acquired by Siemens Mobility. Siemens is expected to deploy

its Trainguard MT CBTC product to 21 lines exceeding 360 km by end of forecast

period.

3 Western Europe is expected to have 726.2 km of Semi Automatic Train Operation

(STO), 440.1 km of Driverless Train Operation (DTO), and 174 km of Unattended

Train Operation (UTO) enabled by radio-based CBTC by end of forecast period.

4

Ansaldo STS’s future is uncertain and it could either be spun off or acquired.

Although it has an excellent product line and a strong customer base, its parent

company, Finmeccanica is in the midst of a financial crisis and its credit rating has

slumped to the lowest possible BBB-.

5 Top 3 competitors are Bombardier, Siemens, and Thales, with a total market share of

78.3% of all operational network length in 2011. The market value is expected to

increase by €2.17 billion during 2011–2021.

Source: Frost & Sullivan

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Executive Summary—Market Engineering Measurements The market value is expected to increase by €1.37 billion during 2011-2021. There is no clear trend on cost

per kilometer as it is highly dependent on several factors existing at the intended installation environment.

Note: All figures are rounded. The base year is 2011. Source: Frost & Sullivan

Compound

Annual Growth

Rate

14.4%

Total Operational Network

Length

(CAGR, 2011-2021)

Market Stage

Growth

Market Value

€993 Million

2011

Market Volume

(Total Length

Operational)

350 km

2011

Average Price

per km*

€2.4 Million

Market Value for

Last Year of

Study Period

€3.59 Billion

2021

Base Year

Market Growth

Rate

N/A

Urban Rail Market: Market Engineering Measurements, Western Europe, 2011

Market Overview

Stable Increasing Decreasing

Market

Concentration

78.3%

(% of market share held by

top 3 companies)

Number of

Competitors

6

(active market competitors in

base year)

Average R&D

Spend by

Product

N/A

*Signaling has a very custom approach. Each contract has to be tailored accounting for various factors.

CBTC prices vary from €1.2 to €4.7 Million per km. Hence we assume average cost of €2.4 Million per km.

For a tabular version, click here.

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Executive Summary—Communication in Automated Urban Rail The Communication subsystem does not perform any vital functions and is used for data transmission alone.

Therefore, commercial off-the-shelf systems can be used to lower CAPEX

Telecommunication

• SCADA

• Maintenance/Emergency Control

• Train Traffic Control

• Instant online radio communication

• Mobile monitoring and control for

engineers and conductors

Passenger Services

• Automatic Fare Collection

• Passenger Information System

• Emergency / Stop request

• Mobile access

• Surveillance

Signaling and Train control

• Train Protection Distance to Go

ATP and ATS

• Computerized Interlocking

• Track Circuits

• Radio-based balises

The urban rail environment has assimilated and

integrated heavily with IT

Source: Frost & Sullivan

Urban Rail Market: Simplified Schematic of Automated Urban Rail System, Western Europe, 2011

Image Sources: PESA; railway technical;

telecomseva.com; evoc.com

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Executive Summary—CBTC Technology Roadmap Commercial off-the-shelf (COTS) Wi-Fi and WiMax solutions are expected to become backbone of the CBTC

train to wayside communication system.

Urban Rail Market: CBTC Technology Roadmap, Western Europe, 2011-2021

Tra

in N

etw

ork

Tra

in T

o

Wa

ysid

e

Co

mm

un

ica

tio

n

2011 2013 2017 2021

IEEE 802.11n

60Mbit/s

Source: Frost & Sullivan

IEEE 1473 L/T

Wire Train Bus

MVB –Standard

Vehicle Bus

IEEE 802.3bj 100 Gbit/s

IEEE 802.11ag

3.5 Gbit/s

IEEE 802.16e Rev2

35 Mbit/s

Induction Loop

The use of COTS enables frequent upgrading, allowing networks to keep up

with technology while staying relevant to economic situations - Operator

IEEE 802.11n

60Mbit/s for equipment that are non

vital

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Executive Summary—Grades of Automation Automatic train operation is segmented by grades of operation from semi automatic to unattended train

operation.

Automatic Train Protection (ATP)

Automatic Train Operation

(ATO)

Automatic Train Supervision

(ATS)

ATP is the first step towards

automation. All primary safety

functions are automated.

Driving functions of the train can

be automated through the ATO

(basic driving to zero staff).

Real time automation of train

management and operations

regulation through ATS.

Grades of Automation (GOA)

• Only ATP with no ATO GOA 1

• STO–Semi Automatic Train Operation

• Trains run automatically between stations under driver supervision

• Driver operates doors, provides input for train to leave station and monitors operations

GOA 2:

• DTO–Driverless Train Operation

• Driver does not need to be at the front of the train or at the driving cab / controls

• Doors can be controlled automatically or from a separate location than the front cab

GOA 3

• UTO–Unattended Train Operation

• No need of crew on board.

• Automation of doors is mandatory

GOA 4

Urban Rail Market: Introduction to Grades of Automation, Western Europe, 2011

Source: Frost & Sullivan

CBTC is used to enable ATO

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Executive Summary—Lines Capable of Automatic Train Operation A total of 83 lines are currently capable of automatic operation, of which only 13 can be classified as radio-

based CBTC. Therefore, around 48 lines have the possibility of upgrading to CBTC in future.

France

CBTC: 10

UTO: 9

STO: 12

Germany

CBTC: 2

UTO: 2

STO: 1

9

Spain

CBTC: 4

UTO: 3

STO: 17

7

Switzerland

CBTC: 1

UTO: 1

1

UK

CBTC: 4

UTO: 2 | DTO: 1

STO: 5

Denmark

CBTC: 2

UTO: 2

Finland

CBTC: 0

STO: 1

1

Netherlands

CBTC: 0

STO: 0

5

It is important to keep in mind that all driverless systems are not CBTC. Automation is possible

even with low level ATO systems. Also, all radio based systems are not CBTC either. Finally, all

CBTC systems are not true moving block, they can also be virtual block based –OEM

Urban Rail Market: Number of Lines Capable of Automatic Operation, Western Europe, 2011 and 2021

Sweden

CBTC: 0

STO: 5

1

Italy

CBTC: 2

UTO:1

6

Greece

CBTC: 0 1

14 10

10

Legend:

All numbers inside boxes denote signaling status of urban lines that are capable of ATO as of 2011.

denotes total number of lines operational with CBTC at end of forecast period (2021).

Note: All ATO systems are not CBTC. A line can have STO, DTO or UTO functionality without CBTC.

Source: Frost & Sullivan

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STO 54.2%

DTO 32.8%

UTO 13.0%

Executive Summary—Brownfield Projects Prefer STO Operators on existing lines choose STO to gain familiarity with CBTC technology, to upgrade the system at a

modest CAPEX, and to allow the workforce such as train drivers to move into other responsibilities.

30

1

9

13

1

10

0

5

10

15

20

25

30

35

40

45

Brownfield Greenfield

Nu

mb

er

of

Pro

jec

ts

Land Type

STO DTO UTO

Urban Rail Market: Number of Projects by Land

Type and GOA, Western Europe, 2021

Source: Frost & Sullivan

Most operators upgrading existing lines prefer to choose STO as the first level of CBTC

implementation. Scaling to DTO or UTO is a relatively simpler upgrade once the CBTC

framework is set up. As the workforce in most transit operators are unionized, there certainly

will be difficulties to implement UTO and completely take away existing jobs. Once CBTC is

installed, operators can slowly start the transition of train drivers/engineers towards

administrative, executive and technical roles. –OEM

Urban Rail Market: Market Share by GOA,

Western Europe, 2021

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1 1

5

1 3

6 4

7

4

5 2

2 4

9

1 1

2

1 2

3

1

0

2

4

6

8

10

12

14

16

Nu

mb

er

of

Lin

es w

ith

CB

TC

STO DTO UTO

Executive Summary—Converting towards Automatic Operation Priority Out of 34 identified projects, 23 are brownfield conversions; less than 30% of projects are new lines under

construction.

Brownfield 69.8%

Greenfield 27.9%

Both 2.3%

Urban Rail Market: Number of Lines Expected to Operate

with CBTC, Western Europe, 2021

Source: Frost & Sullivan

• These 3 cities are expected to have majority automated metro systems:

• Copenhagen–Copenhagen Metro (Ansaldo) and Copenhagen S-Bane (Siemens)

• Paris–OCTYS + OURAGAN Project involving Ansaldo, Areva, Siemens and Thales

• London–Bombardier CityFlo 650 CBTC on SSR Lines and Thales Seltrac S40 on 3 lines.

Urban Rail Market: Market Share by

Number of Projects in Different

Land Types, Western Europe, 2012-

2021

Rail Automation and IT integration allow for remote monitoring on mobile devices for track-side

workers with applications that are on the cloud and independent of hardware requirements.“

– Operator

• 54.2% of all CBTC systems expected to be STO

by end of forecast period

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Alstom Ansaldo STS Bombardier Invensys Siemens Thales

0.0% 10.0% 20.0% 30.0% 40.0%

Denmark

Finland

France

Germany

Greece

Italy

Netherlands

Spain

Sweden

Switzerland

UK

Radio-based CBTC Systems Installed

0.0% 10.0% 20.0% 30.0% 40.0%

Denmark

Finland

France

Germany

Greece

Italy

Netherlands

Spain

Sweden

Switzerland

UK

Radio-based CBTC Systems Installed

Executive Summary—Competitive Positioning of CBTC Systems For completion within 2011-2021, a total of 1,077.8 km of projects have been confirmed and construction is

underway. This is a significant increase over the previous with 188.9 km installed from 2001–2010.

Urban Rail Market: Competitive Environment of CBTC Systems, Western Europe, 2011 and 2021

Type of Block Alstom Ansaldo Bombardier Invensys Siemens Thales

CBTC Virtual

Block Urbalis 200 Ansaldo CBTC CityFlo 450 SIRIUS Trainguard MT

Seltrac MS

CBTC Moving

Block

Urbalis 300

Urbalis Evolution - CityFlo 650 - - Seltrac IS

Urban Rail Market: CBTC Products Categorised by Type of Block, Western Europe, 2011

Note: All figures are rounded. The base year is 2011. Source: Frost & Sullivan

2011 2021

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2011 2021

16.3%

3.1%

10.0%

15.7%

2.9%

8.7% 4.7%

8.4%

3.6%

26.6%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

Denmark Finland France Germany Greece Italy Netherlands Spain Sweden Switzerland UK

Tra

ck L

en

gth

of

CB

TC

Denmark Finland France Germany Greece Italy Netherlands Spain Sweden Switzerland UK

Executive Summary—Operational CBTC Forecast London and Copenhagen aim to have fully automatic metro systems. Paris is expected to start automation of

other lines when CBTC projects in line 5 and 13 complete in 2013.

Urban Rail Market: Country-wise Market Share by Length of Operational CBTC,

Western Europe, 2011-2021

Note: All figures are rounded. The base year is 2011. Source: Frost & Sullivan

5.9%

37.0%

5.8%

11.5%

2.3%

16.9%

20.6%

13.8%

2.3%

16.4%

13.2%

9.3%

2.2%

10.4%

2.7%

0.5%

25.7%

3.5%

• Siemens with Trainguard MT is expected to be market leader with 39.5% of market share of total CBTC

network operational in 2021. Thales is expected to follow with a share of 19.8%.

• Germany is expected to order CBTC upgrades for it’s urban rail systems post 2015. Nuremberg metro is

expected to upgrade it’s U1 line only after the extension of U3 line completes in 2018.

• Metro Systems in Denmark and United Kingdom (UK) are expected to contribute towards 52.6% of CBTC

implementation during the forecast period.

Note: The center chart shows the market share by length of CBTC network that is expected to be operational in the forecast period (2012-2021) in each

country.

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Parameters Current Future

Market Status

• The potential size of the market is vast and not fully

penetrated. The total length of metro and light rail systems in

Western Europe is over 8,100km. Only 1,340 km is expected

to have operational CBTC by 2021.

• Market is placed in the launch pad for robust growth in

implementation of CBTC.

• CBTC is expected to become industry standard in urban

rail signaling. Its scalability allows for various levels of

automation.

Competition • 78.3% of the market is consolidated by 3 participants

(Siemens, Bombardier and Thales).

• Standardization is going to increase competition. Orders

for green field projects are expected to be won by

participants providing a holistic solution of rolling stock +

signaling.

Solutions • Moving block and virtual moving block systems offer

comparable performance.

• Moving block systems expected to become standard as

they will provide higher response times that virtual moving

block systems cannot match.

Technology • Induction-based and radio-based systems

• Induction-based communication systems to become

obsolete

• Multi modal communication platforms (Wi-fi + Cellular +

Satellite)

Barriers to Entry in

Western European

Market

• Handful of global suppliers are capable of providing CBTC.

• Highly expensive technology platform deters new participants

from entering the market

• Unlikely to change.

Executive Summary—Key Conclusions and Future Outlook CBTC systems are expected to become standard signaling solutions for urban rail systems.

Source: Frost & Sullivan

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Research Scope, Objectives, Background, and

Methodology

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Research Scope

Communications Based Train Control Systems, Urban Rail Signaling Topics Covered

2012 to 2021 Forecast Period

2011 to 2021 Study Period

2011 Base Year

Western Europe - Denmark, Finland, France, Germany, Greece, Italy, Netherlands,

Spain, Sweden, Switzerland and The United Kingdom Geographical Scope

Source: Frost & Sullivan

5.9%

37.0%

5.8%

11.5%

16.9%

2.3%

20.6%

0.0%

20.0%

40.0%

Mark

et

Sh

are

by L

en

gth

of

Op

era

tio

na

l C

BT

C

Urban Rail Market: Country-wise Market Share by Length of Operational CBTC, Western Europe, 2011

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Research Aims and Objectives

Aim

The aim of this study is to evaluate the revenue growth opportunities available in the communications-

based train control industry. The study defines drivers and restraints to the market, market share analysis,

and strategic market sizing forecasts for urban rail networks that are automated.

Objectives

• Provide a strategic overview of the urban rail CBTC market in Western Europe, including key

technology trends, market drivers and restraints for the CBTC market.

• Provide market size and forecasts of future implementation of CBTC systems in new and existing urban

rail systems

• Provide revenue forecasts of the Western European CBTC stock market by segment and breakdown by

region from 2011–2021

• Competitor analysis: Analyze competitive factors, competitor market shares, and product portfolio

analysis and capabilities

Source: Frost & Sullivan

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Key Questions This Study Will Answer

Who are the leading suppliers of CBTC systems in Western Europe?

Where are the new opportunities in signaling for urban rail systems?

In which direction is the urban rail signaling technology heading? Will radio-based signaling see rapid

uptake in urban rail environment? If so, then in which environment and segment?

What is the market share of participants in the CBTC market? Who is expected to be the market

leader in CBTC in each country in Western Europe by 2021?

Source: Frost & Sullivan

What is the business environment of the Western European CBTC market, the dynamics and its

impact on mobility and urbanization?

Urban Rail Market: Key Questions This Study Will Answer, Western Europe, 2011

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Year RS Code Research Service Title Regional

Scope

2012 M77E-18 Growth Opportunities In Urban Rail Rolling Stock Systems In Europe Europe

2012 M77D-18 Strategic Insight on Global Rail Market Global

2011 M4DD-18 Strategic Analysis of the Global High Speed Rail Market Global

2011 M64A-18 North American Locomotive Market: A Strategic Analysis of Powertrain Technologies and Auxiliary Systems

Considered by OEMs for EPA Emission Compliance North America

2011 M6DB-18 Strategic Analysis of Alternative Powertrain Technologies in the European Diesel Locomotive and Railcar

Market Europe

2011 N92D-18 An Executive Analysis on Passenger Rail Rolling Stock and Seating Systems Market in the U.S. United States

2011 P488-18 Green Technologies and Developments in Rail Transportation APAC

2010 M649-18 European Rail Catenary Systems – Executive Analysis of Copper Requirement for Electrification across

Strategic European Markets Europe

2009 M3F5-18 Strategic Analysis of the European Rail Electrification Market Europe

2009 M1B6-18 Strategic Analysis of the European Light Rail and Underground Market - Part 2: Market Engineering

Measurements Europe

2009 P2A3-18 Strategic Analysis of the Growth Opportunities in the Indian Rail Industry India

2009 M363-18 Strategic Opportunity Analysis of the Russian Rail Market: Implication for the Global Supply Chain Russia

2008 P391-18 360 Degree CEO Perspective on Green Transportation: Focus on Rail, Automotive and Procurement Global

Research Background

This research service strengthens our coverage of the rail industry.

Source: Frost & Sullivan

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Company Designation

Centro Media Manager

Thales Managing Director, Market

Analyst

Invensys Rail Ltd Head of Innovation

RATP External Business

Development Manager

Vectus Ltd. CTO, MD

ULTra PRT Financial Controller

2getthere Commercial Director

Rock Project Project Manager

TFL UK Project Manager

Siemens plc Project Manager

Thales Market Analyst

Ansaldo STS VP (Investor Relations)

Bombardier Chief Innovation Officer

Ansaldo STS Director Global – Signaling

Siemens Partner

ALSTOM

TRANSPORT

Deputy Vice President

Investor Relations, Director

Urban Strategy

Research Methodology: Frost &

Sullivan’s research services are based on

secondary and primary research data.

Secondary Research: Extraction of

information from existing reports and

project material within the Frost &

Sullivan database, to include data and

information gathered form technical

papers, specialized magazines, seminars

and internet research.

Primary Research: More than 10

interviews have been conducted over the

phone by senior consultants/industry

analysts with original equipment

suppliers, regulation authorities and

distributors. Primary research has

accounted for 80% of the total research.

Research Methodology

Company Designation

Skoda

Transportation Vice President Sales

Keolis Nordic AB Chairman of the

Board

AB Stockholms

Spårvägar Chairman

Barcelona Metro Project Manager

Roma Metro Technical Director

Milan Metro Technical Manager

Copenhagen Metro Project Engineer

Source: Frost & Sullivan

Urban Rail Market: Key Industry Participants, Western

Europe, 2011

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Key OEM Groups/Participants Compared in this Study

Group OEMs / Divisions

Alstom Alstom Transportation

Bombardier Bombardier Transportation

Finmeccanica Ansaldo STS

Invensys Invensys Rail

Siemens Siemens Mobility

Thales Thales Transportation

The OEM groups and companies compared in this study are as follows:

Source: Frost & Sullivan