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The global railway signalling system market size was USD 7493.0 million in 2019. The global impact of COVID-19 has been unprecedented and staggering, with the railway signalling system witnessing a negative impact on demand across all regions amid the pandemic. Based on our analysis, the global market exhibited a lower dip of -1.50% in 2020 as compared to the average year-on-year growth during 2016-2018. The market is projected to grow from USD 7380.6 million in 2020 to USD 11273.2 million in 2027 at a CAGR of 5.2% in the 2020-2027 period. The rise in CAGR is attributable to this market’s demand and growth, returning to pre-pandemic levels once the pandemic is over.
Safety and regularity are seen as the most important aspects of a railway system. Without signal arrangements, it is impossible to assure the safe operation of trains. Signals are among the most significant components of the many systems that make up the entire railway system. This system is used to maintain the railway traffic and keep the rail routes clear for the other trains to reduce the number of accidents.
There are various technologies used by these systems, such as the automatic train protection (ATP) system, positive train control (PTO) system, automatic train operation (ATO) System, and communication-based train control (CBTC) system. Over the years, many signalling and train control communication systems have been evolving owing to the increasing number of rail commuters, the adoption of data analytics, the internet of things, cloud computing, and other advanced technologies that bring the digital transformation in the railway industry.
For instance, the Indian Railways plans to implement a new signalling system project to modernize the signaling systems across Pan-India. The modernization of the signalling system includes the implementation of advanced technologies such as the Automatic Train Protection (ATP) system that helps to adhere to the permitted speed limits without the intervention of the driver and a 4G-based mobile train radio communication system (MTRC) that is used for the emergency communications.
Railway Signalling System Market to Show a Momentary Downfall amid COVID-19 Pandemic
The COVID-19 pandemic raging on a global scale has a huge impact on people's health and lifestyle and has affected the entire world economy to a large extent.
The transportation sector is the primary exposed industry to the COVID-19 pandemic. The policies implemented by the various governments and other legal authorities to ensure social distancing, sanitation regulations, and lockdowns led to a shutdown of production activities for a temporary period, leading to the closure of businesses and retail. The closing of cross-border trades and travel and the restricted operability during the lockdown has severely affected public transport. The proximity of seating arrangements, the longer traveling time would be the least option with the people.
The rail services have been stalled in some regions, and several other countries have resumed the rail operations with limited trains on track. Although some countries have suffered severe losses, some countries have completely renovated their railway infrastructure and built new tracks and freight corridors during the lockdown period. However, the market for railway signalling systems is expected to rebound in 2021. Since the rolling stock that is out of service requires proper maintenance, remote monitoring and predictive maintenance technologies are needed.
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Megatrends of Cloud Computing and Digitization to Elevate Railway Systems
Railway signalling systems play a vital role in the availability and capacity of railways. These systems meet the degree required by the network while ensuring security. To maintain the railway network in its optimum condition, the signaling procedure needs to have gears that can make data mining and analysis more accessible and faster. Thus, a distribution and data collection system based on cloud computing technology is now being proposed to collect information or data related to the railway signalling systems’ assets.
Through the combined use of micro-sensors in the entire track and switching system, information can be immediately analyzed through artificial intelligence and big data to predict maintenance needs proactively, avoid accidents or delays, and improve safety and operational efficiency. Moreover, the connectivity and digitization will enhance the rail system by bringing more transparency and a higher level of interaction in the system that may help the passengers to manage and optimize their end-to-end mobility.
For instance, the Indian Railways are taking IT initiatives by launching the RailCloud project- a virtual server with a built-in security system to enhance server usage and faster connectivity in association with Telecom PSU, RailTel Corporation of India Limited. The Indian Government is also working on leveraging the Building Information Modelling (BIM) process to design and install railway-signalling systems to modernize 8,000 railway stations across India. Additionally, the government’s new policy framework recommends using public-private partnerships (PPP) to unleash the country’s faster development signal system.
Emergence of High-speed Railway Projects to Drive Market Growth
Globally, with the increasing railway passenger traffic, especially in high-speed railways, the development of railway transportation safety has become more critical. Hence, the future railway transportation ecosystem must provide solutions to meet the source's needs to the destination with advanced services, irrespective of the number of steps required to reach the destination or the distance traveled. Advanced train control and signalling systems provide all the gears for monitoring and safe operation of the rail network and efficiently using the infrastructure capacity. The signalling system is complex and comprises several physical assets in rails, trains, and remote-control centers, all of which need to be interconnected.
Nowadays, OEM portfolios have a wide range of products determined by national standards and signal technology requirements. Also, continuous efforts are being made to standardize these products in the future to improve interoperability. All public and private sector participants (PPP) have realized the need to improve transportation infrastructure. Thus, the increasing the demand for rail transportation and the railway system’s rapid developments are expected to drive the market.
Increasing Automation of Urban Rail Infrastructure to Boost Growth
The autonomous trains are employed with Communication-Based Train Control (CBTC) technology that supports communication between the device on the rails and trains for managing the rail traffic. This technology allows a detailed identification of bogey alignments, train locations, and track stability and ensures enhanced safety and greater efficiency of the device as well as the passengers. Autonomous trains run at a higher frequency and can transport a large number of passengers and goods at a faster speed than road transportation. Also, automation in trains can considerably improve the cost efficiency of train operations as both the train drivers and control officers could be substituted by autonomous technology.
The global population is proliferating and is expected to double over the years to come. With the growing adoption of advanced technologies, infrastructure development, and increasing industrialization, a large part of the world’s population is expected to be urbanized. In this rapidly changing world, the transportation system is also expected to be highly operative, with no option of human errors. Therefore, trains' automation is expected to create enormous opportunities for the railway signalling system market growth.
For instance, Russian Railway Authorities set up the first trail on the Shcherbinka railway test ring near Moscow to test the functions of automatic trains. This train is furnished with Automated Train Operation (ATO), enabling emergency stop, if there are any hindrances on the track.
The final stage of digitization is the imminent arrival of automated railway operations. With the help of automation, the trains will need advanced sensors to give a complete perception of their environment. These sensors will be combined with artificial intelligence to enable them to operate on the network entirely autonomously. This is not just a vision; Thales Germany and the local Albtal-Verkehrs-Gesellschaft (AVG) are developing autonomous trams in Karlsruhe.
High Initial Cost and Unavailability of Skilled Professionals to Restrain Growth
The demand for railway transport is tremendously increasing over the past few years due to the economical fare prices, faster mode of conveyance, and the growing adoption of advanced technologies in the rail infrastructure. Therefore, to fulfill this ever-increasing demand, the rail authorities are bound to develop the rail infrastructure, introduce high-speed trains, expand the rail networks, and adopt advanced technologies that ultimately require a large amount of investment. However, all these investments may not be fulfilled owing to the limited budget allocated by the government. Also, the other expenses involved, such as maintenance, replacement costs, and management of existing and new systems within railway premises, may act as a major restraining factor in the growth of the market for railway signalling systems.
Moreover, the railway systems comprise various technical components, including networks, hardware, and software which can be complex and difficult to configure. Thus, without a strong IT and skilled professional, the integration of digital infrastructure becomes very difficult. The railway operators can perform a thorough overhaul of IT systems. However, the cost of this overhaul may take a significant amount of time to realize.
Nevertheless, the governments of various countries are revising their budgets for the development of the railway infrastructure. This sector is going to be one of the major contributors in the digital and e-commerce world. For instance, a long-term strategic plan called the "National Railway Plan" has been formulated by the Indian Railways to plan the development of infrastructure capacity and the strategy of increasing the modal share of railways. This will be a common platform for all future business, infrastructure, and financial planning of the railways.
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Communication-based Train Control System Segment to Show High Growth
Based on technology type, the market is segmented into automatic train protection system (ATP), positive train control (PTC) system, communication-based train control (CBTC) system, and automatic train operation (ATO) system. The communication-based train control (CBTC) system segment holds the largest share in the global market. Communication-based train control (CBTC) is a railway signalling system that uses telecommunications between trains and track devices for infrastructure control and traffic management. Communication applied to railway signals has special requirements that are largely dependent on the railway system's characteristics and performance. Therefore, it is necessary to understand the transportation system's characteristics and performance in detail and provide appropriate requirements to the communication system. By means of the CBTC systems, the exact location of the train can be obtained more precisely. Thus, the railway traffic can be managed more effectively and safely.
Increasing investment in urban transportation, especially in the railway network, fuels the global demand for CBTC systems for effective railway traffic management. The increase in the number of passengers and the increasingly fierce competition among the operators and higher expectations for safety and comfort are driving railway operators to replace or upgrade their rolling stock. Because of the high utilization rate of existing infrastructure, a modern signaling system is essential to improve network security and capacity.
For instance, Alstom seized a Mumbai Metro Railway Company Limited (MMRCL) contract to provide the CBTC signalling system for Mumbai Metro Line 3. The contract is based on the rolling stock and power supply contract that was won for the same metro line earlier this year and is worth more than 100 million euros. The Line 3 will be equipped with Urbalis 400, the latest generation of CBTC signalling technology. The contract includes platform screen doors, computer-based interlocking, and centralized train supervision, unmanned train operation (UTO), as well as mechanical and electrical supervisory control and data acquisition system (E&M SCADA).
Inside the Station Segment to Hold the Largest Market Share in Upcoming Years
Based on the application type, the market is segmented into inside the station and outside the station. The inside the station segment accounts for the largest share in the global market. The signalling system is widely utilized inside the station as the station is the place where every train halts and departs. The trains' arrival and departure schedules are completely dependent on the railway signalling system that sends accurate location of the other trains and occupancy of the railway tracks. In railways, the railway station and train operation's communication system is realized by the signal sent out by the wired media. After the train is departed from the station, there is no communication between the running train and the station or the controller.
Nowadays, the railways across the world are installing optical fiber cables for communications between stations to send signals to the trains. The use of fiber optic cables is not as easy to provide track-side communications as copper cables. Therefore, when communicating with drivers, guards, maintenance gangs, guards, etc., outside of the station limits, another transmission medium is required. This communication medium is wireless. With the increasing number of high-speed rail networks, and adoption of automated management systems, the demand for wireless sensor network-based systems will accelerate. Therefore, boosting the expansion of advanced technologies outside the station.
North America Railway Signalling System Market Size, 2019 (USD Million)
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The market size in North America stood at USD 3234.5 million in 2019. The region presently holds dominance in the global market. It is expected to grow and to show a steady growth hereafter owing to the well-established high-speed rails and already installed advanced signal controlling systems in all the major cities and countries. Also, the gradual replacement of traditional systems with advanced, cost-effective, and reliable solutions to deliver improved efficiency and enhanced safety is expected to promote the market growth in these established industries.
Europe is among the most developed markets for various railway technologies and with well-established rail networks. Various prominent players, including Bombardier, Alstom, Siemens, Hitachi, and Thales, have their presence in this region or hold a significant share in the European railway signalling system market. These OEMs are the world leader in signalling innovation, such as moving block technology, which enables trains to travel in the order of braking distance, increasing capacity on multiple lines by more than 20%, and operating in fully automated operations which have further improved the safety as well as capacity. European OEMs have developed these systems together with railways and put them into commercial operation, although on a small scale.
However, Asia Pacific is expected to witness a significant and rapid growth during the forecast period. This disruptive growth is attributed to the expansion of railway network projects and advanced signalling systems on new and existing high speed railway networks. China is one of the major contributors to this regional market. Chinese companies such as CRCC, CRSC, and CREC have experienced the fastest growth among the other global leading players by holding 20-25% in the global signalling, rail control, and electrification markets. This growth is owed to the expansion of the railway network, which grew from ~75,000-line length in 2005 to 150,000 Km in 2020.
Also, several Asian countries are increasingly investing in the CBTC system. For instance, Nippon Signal has installed a protection system, “SPARCS,” based on CBTC for Beijing Subway Line. India is also investing a high percentage in high-speed rails and metro projects to support their economic development. Recently, the Indian Railways launched their first high-speed railway project that connects Mumbai and Ahmedabad's major cities. Moreover, Virgin Hyperloop One signed an agreement with the Maharashtra State Government to deploy their first Hyperloop train project between Pune and Mumbai. Therefore, all these factors represent a positive growth opportunity in the region.
The Middle East and Latin America also exhibit steady growth in the global market. Various major countries from these regions are focusing on improving the existing rail network in the coming years. The UAE is also working towards expanding its railway network from 264 km up to 600 km by the end of 2024. Additionally, the governments are also backing financial budgets for the comprehensive rail systems to grow the industry players. For instance, The African government launched the Ethiopia-Djibouti project- the first cross-border electrified railway network in Africa.
Prominent Companies Focus on Expanding Their Geographic Presence to Intensify Competition
In the digital era, Alstom is a global leader in the transportation sector. The company thrives on more innovative and greener mobility worldwide by developing integrated systems that offer sustainable solutions for future transportation. The company provides a complete range of equipment and services from metros, high-speed trains, and trams to integrated systems, signalling, infrastructure, digital mobility solutions, and customized services. Alstom takes a transformational step by completing the acquisition of Bombardier Transportation. This acquisition will provide a unique opportunity for Alstom to strengthen its global position in the rapidly growing digital mobility market.
Other prominent players, including Hitachi, Siemens, and Thales, have adopted aggressive expansion strategies to maintain their global market position. For example, Hitachi expanded its operations in Europe through various strategies, which involves the transfer of its global rail headquarters to the U.K. With this move, Hitachi has significantly increased its market penetration in two key markets in Italy, the U.K., and Europe. Hence, increasing consolidation initiatives are likely to drive competition in the market.
An Infographic Representation of Railway Signalling System Market
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The global railway signalling system market research report provides a detailed analysis of the market and focuses on key aspects such as leading companies, product types, and leading applications of the product. Besides this, the report offers insights into the market trends and highlights key industry developments. In addition to the factors above, the report encompasses several factors that have contributed to the market's growth over recent years.
Value (USD Million)
By Technology Type
By Application Type
Fortune Business Insights says that the global market size was USD 7493.0 million in 2019 and is projected to reach USD 11273.2 million by 2027.
In 2019, the North American market size stood at USD 3234.5 million.
The market is projected to grow at a CAGR of 5.2% in the forecast period (2020-2027).
The communication-based train control (CBTC) system segment is expected to lead this market during the forecast period.
Increasing high-speed railway projects and surging demand for advanced controlling systems are the key factors driving the global market.
Alstom is the major player in the global market.
North America dominated the market in terms of share in 2019.
The increasing automation of the urban rail infrastructure is expected to drive the adoption.
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