Smart city enabler SenSen Networks (ASX: SNS) has expanded its existing contract with the City of Calgary and has significantly improved its commercial terms in the process.
This expansion follows SenSen’s announcement in September last year that it had signed a multi-year contract to monitor parking and traffic in Calgary, one of Canada’s largest and smartest cities.
Under the terms of the initial deal, Sensen received around C$1.3 million (A$1.32 million) as an up-front revenue payment covering the installation of Sensen’s fixed and mobile camera systems.
The deal also guaranteed Sensen additional fees of around C$290,000 (A$294,000) per year for the software licence and maintenance of these systems.
Currently, Sensen provides multiple video-based IoT solutions to municipalities around the world, in countries such as Australia, Singapore, India and the UAE.
Just recently, Sensen announced a new initiative in collaboration with Silicon Harlem LLC, to improve broadband internet and 5G connectivity in Harlem, New York, beginning with a trial project in 116th Street.
In Calgary, Sensen provides an automated parking monitoring system that is able to detect and capture parking violations without human input or intervention and thereby improve upon the number of resources the City of Calgary expends in policing parking violations in residential and commercial areas.
The expansion to the deal announced today means that Calgary will purchase five additional SenFORCE mobile parking enforcement units, with upfront revenue for the systems, software and commissioning amounting to C$540,000 (A$547,500) with a further C$897,000 (A$909,000) to be paid to Sensen.
The deal is based on Sensen providing its services on a software as a service (SaaS) model which is generally favoured by customers because it removes the need for large initial set-up fees and encourages efficient scalability as Sensen’s system is extended to more districts in Calgary.
According to Sensen, its commercial agreement with the City of Calgary is forecast to generate up-front revenues of around C$1.84 million (A$1.86 million) in this financial year — and improvement of 41% from the previous deal.
Also, Sensen expects to generate additional recurring revenues of C$379,000 (A$384,000) per year between now and 2022 — an improvement of 31% from the previous deal signed in September 2017.
“We will ensure Calgary continues to have access to the most advanced and ground-breaking solutions for civic compliance, parking management and enforcement,” said Subhash Challa, CEO of Sensen Networks.