Digital Railway Market Size, Share, and COVID-19 Impact Analysis, By Offering (Solution (Remote Monitoring, Route Optimization and Scheduling, Analytics, Network Management, Predictive Maintenance, Security), Service (Managed Services, Professional Services, Consulting , System Integration and Deployment, Support and Maintenance)), By Application (Railway Operation Management (Rail Automatic Management, Rail Control, Signaling Solution, Rail Traffic Management, Freight Management, Smart Ticketing), Asset Management, Passenger Experience), and Regional Forecast, 2024-2032

Digital railway is a system designed to improve the visibility of the train status, offer a better connective experience, provide real-time solutions related to sudden breakdowns, identify failures, and optimize its performance. It is a government-supported initiative to offer substantial improvement in the command & signaling system to avoid delays, increase capacity at a lower cost, and enhance the reliability of the railways.

The number of railways passengers has increased significantly over the years. As per the data published by the Office of Rail and Road report, a total of 248 million passengers commuted via rail in Great Britain during the second quarter (Q2) of the financial year 2021-22, an increase of 85.8% in Q2 of 2020-21 Q2.

Such growth is an indication of economic and social progress. Additionally, the International Energy Agency (IEA) predicted that passenger and freight activity will increase by more than double by 2050. Hence, to accommodate the growing number of rail commuters, new capacity is required to meet the continued rise in demand. Conventional ways of accommodating this capacity by building new rail infrastructure would be non-feasible, hugely disruptive, and probably unachievable.

Digital railway or train technology will deliver services more cost-effectively and efficiently than conventional technology, leading to enhanced safety, sustainability, higher capacity, and improved performance. Rail operators are embracing digital technologies such as passenger information systems, passenger analytics, crowd detection algorithms, and traffic management solutions to provide quality services and efficiently manage traffic. For instance, in March 2021, Thales introduced new digital rail solutions to improve passenger experience and operational efficiency for greener mobility.

However, the lack of robust rail infrastructure in underdeveloped countries will challenge the digital railway market growth. Strong railway and communication infrastructure is a prerequisite for building digital network solutions. Hence, massive investment is required to implement digital technologies in underdeveloped countries to scale up operations. Furthermore, the increased threat of cyberattacks is another challenge for the market growth. As the system becomes more digital, a significant amount of passenger and train data travels to the operating center, providing greater access to hackers. Industry 4.0 and IoT technology provide real-time data access to critical information of rail operators, maintainers, asset managers, and customers, posing a challenge to market growth.  

Globalization of business has led to a rise in complexities in supply chain management. The transformation of the global supply chain has made logistics operations more complex than before, with the rising pressure to deliver goods & services at a lower cost with minimum to no delay. Hence, this has increased the demand for advanced transportation services with enhanced security, reliability, and speed. Emerging digital technologies, such as Big Data, 5g, IoT, blockchain, AI, and ML, will pave the path for digital railways in the coming years. With the help of automation or real-time geo-location, trains are becoming reliable and more competent. IoT sensors are creating new opportunities for preventive maintenance and damage detection.

Impact of COVID-19 on the Digital Railway Market

The COVID-19 pandemic brought the entire mobility industry to a standstill, disrupting the production and sale of new vehicles globally in the first half of 2020. Even after production resumed, operating capacity was considerably lower, and the unexpected rebound in demand caused a shortage of raw materials and components such as semiconductors. As a result, automakers had to modify their manufacturing capacities.

However, the COVID-19 pandemic led to an increase in the usage of digital technologies due to nationwide lockdowns and social distancing norms, leading to an expansion of opportunities for digital railways. Additionally, national and local governments’ ambitious plans to digitally transform every industry propelled the market growth. Rail manufacturers have been adapting to the trend by incorporating IoT, sensors, Big Data, AI, and ML in their rail operations to meet consumers’ demands, such as fast ticket booking, freight management, and others, accelerating the phase of digitization.

Key Insights

The report will cover the following key insights:

• Key Industry Developments – Mergers, Acquisitions, and Partnerships


• Porter’s Five Forces Analysis


• PEST Analysis


• Technological Developments


• Impact of COVID-19 on the Digital Railway Market

Analysis by Offering 

The solution segment accounted for the largest market share in the digital railway market. The solution segment is further split into remote monitoring, route optimization and scheduling, analytics, network management, predictive maintenance, and security. The predictive maintenance segment is anticipated to register a higher CAGR over the forecast period as it is increasingly being deployed in railways to enhance rail operation, safety, and security. Predictive maintenance involves deploying sensor-based monitoring in real time to anticipate problems beforehand.

Equipment failures can lead to fatal consequences, unreliable operations, and unplanned outages that can adversely impact revenues as well as customer safety & satisfaction. Time-based conventional maintenance strategies fail to capture the exact state of an asset and lead to unnecessary operating & maintenance costs. Furthermore, through predictive maintenance, operators can accurately estimate the requirement for spare parts and cut down on their shipping & procurement costs.

Analysis by Application 

In 2020, the railway operation management segment accounted for the largest revenue share. The smart ticketing segment is anticipated to register the fastest CAGR through 2029. The growing demand for a cashless transaction has propelled the demand for smart ticketing. Smart ticketing offers the best fare price for each journey, saves time, reduces environmental impact, provides an enhanced travel experience, and is safer than traditional paper tickets. Moreover, smart tickets save time, as passengers are not required to stand in queues for long to book tickets.

Regional Analysis

Asia Pacific is anticipated to register the fastest CAGR in over the forecast period owing to rising GDP, increased adoption of new technologies, and government focus on the digital economy. Countries including China, Japan, Singapore, India, South Korea, and Australia are investing rapidly to digitalize their economy, creating lucrative opportunities for the market. Growing urbanization and high population growth have intensified the need to transform the existing rail infrastructure. Supportive government regulations, increasing investment by rail manufacturers, and the growing number of rail passengers are expected to propel the Asia Pacific digital railway market growth over the forecast timeframe. For instance, the East Japan Railway Company is incorporating tools such as Mobility as a Service (MaaS), data marketing tools, and digital payment platforms to transform their rail infrastructure.

Key Players Covered

• Siemens (Germany)


• Wabtec (U.S.)


• Cisco (U.S.)


• ABB (Switzerland)


• Huawei (China)


• Thales (France)


• IBM (U.S.)


• Alstom (France)


• Bombardier (Canada)


• Tego (U.S.)


• KONUX (Germany)


• Toshiba (Japan)


• Thales (France)


• Hitachi (Japan)


• Fujitsu (Japan)


• Oxplus (Netherlands)

Segmentation

Key Industry Developments

• In June 2022, Thales introduced digital interlocking system to provide trains with a safer route and keep them at a safe distance apart to avoid the risk of collision. The digital interlocking system verifies instructions and manages the operations of signals, level crossings, and other critical assets to provide the highest level of safety.


• In September 2022, Siemens showcased its new digital business platform, Siemens Xcelerator, at InnoTrans 2022. Siemens Xcelerator is an open digital business platform designed to create a robust ecosystem to accelerate digital transformation and sustainability in mobility. The platform will help to connect real-time data with the digital world in the rail industry. It will also allow better utilization of trains, which will benefit both passengers and operators and create a new level of efficiency and comfort.


• In September 2022, Huawei launched the Future Railway Mobile Communication System solution at the InnoTrans 2022 and the 9th Huawei Global Rail Summit in Berlin, Germany. The solution focuses on improving reliability and safety to support the rail sector's digital transformation and improve railway operations' efficiency.