All mobile networks want to get into the business of connected cars, according to global M2M platform Cubic Telecom.
Cubic is one of many players in mobile looking to take advantage of this new market, partnering with car manufacturers as both industries look for new ways to engage customers.
Often used as an umbrella term, the term connected car covers products and services that include everything from remote locking and unlocking to stolen vehicle recovery and vehicle tracking. These features are being adopted by a number of businesses in the industry, including mobile dealers in the UK, who are bridging the gap between mobile and automotive industries.
For Rainbow Telecom, the strategy surrounding connected cars is one that fits in line with its mobile strategy. The unified comms dealer is one of many that has a vehicle-tracking arm of the business, recently partnering with TomTom to fit SIM cards in tracking devices.
Speaking to Mobile, Paul Lawther, Rainbow’s head of mobile, says: ‘If you look at mobile dealers, a lot of them have a vehicle-tracking arm. A lot of the tracking devices require SIM cards and we can then supply the mobile phone SIM cards as well, so that’s a product that ties in with our mobile strategy. We’ve taken on TomTom as a vehicle-tracking partner as it’s a product that fits within mobile.
‘Because we’re a unified comms provider we do have a specific proposition for the automotive industry and we provide a number of solutions.’
Unified comms dealer One Connectivity says its partners are showing a greater interest in the ‘untapped’ connected car market. However, MD Paul Stevenson believes that a lack of customer understanding is holding back the industry: ‘It’s a huge untapped market and a lot of partners are looking to move into that.
‘However, it comes down to knowledge, and customers aren’t aware of it. When we talk to them they want to get involved but I don’t think people understand it enough. For us it’s about getting our customers talking about it and letting them know what can be done, it’s not just about a SIM in a machine – it’s also about a control centre.’
For mobile networks, connected cars fall under the category of M2M, with both Telefonica and Vodafone adopting strategies to deliver this service. The latter claims that automotive is a sector of the network that is expanding rapidly.
Matt Key, commercial director, M2M at Vodafone Group Enterprise tells Mobile that the connected car market has evolved rapidly: ‘Our first and still our largest area is the automotive vertical, it’s growing aggressively. It’s one of those areas that has evolved most quickly in terms of the IoT and M2M market. Automotive has been one of the most advanced users of this kind of tech. We spotted that quite early on, and our strategy is to connect everything everywhere through mobile, satellite and fixed. We want to provide end-to-end services and the automotive industry is one of those areas that is moving quickly in terms of adopting tech.
‘Connected cars allow us to become a pivotal part of the future of IoT. We believe there will be four key competitive markets when it comes to the Internet of Things; the connected space, the vehicle, the smartphone and then the services that connect these parts.’
In order to drive growth in this space, Vodafone has secured a number of partnerships with car manufacturers but claims its strength lies in its ability to build its own services. Key says: ‘We manufacture our own hardware and software and we’ve also got the network and we provide services around that. Internet on the car is what we’re working on next but we also provide vehicle recovery, fleet management, diagnostics and remote control.
‘We sit in a unique position compared with other MNOs as we actually make the sensors, we have the software engineers, and not everyone has that. The Vodafone that you think of as being just a network is genuinely very different in the automotive sector. We sit in a beautiful sweet spot in terms of understanding that market.’
Car manufacturers are looking for ways to leverage connectivity as a way to attract more people to
drive. According to Abraham Philip, manager of Connected Vehicle & Services EU at Ford, bringing mobility into the car is vital when it comes to engaging with customers.
‘A lot of people aren’t looking to get a driver’s licence and we have to find a way to engage these customers and provide solutions for people who don’t have that old-school mentality of having a car. Mobile solutions will be enabled by different connectivity solutions and we are trying to find avenues for customers to get from point A to B with as little hassle as possible.
‘There’s also an OEM desire as today we don’t have much visibility on the customer or vehicle, and connectivity gives us a chance to get some data and make smart use of that. We wouldn’t be able to get that without MNOs, when we’re talking about built-in solutions we talk about utilising and partnering with local mobile network provider. Car manufacturers are working with networks as a way to get closer to customers.’
For MNOs, claims Philip, the key driver when it comes to partnerships is the opportunity to tap into new markets and revenue streams: ‘For networks, the benefits come in selling unused bandwidth. They have the opportunity to increasing their revenue stream so in the end it’s certainly a business proposition.’
Vodafone describes this relationship as a ‘merging of knowledge’, one that is growing alongside the expectation of connectivity. Key explains that when it comes to the connected car market, the network will use a range of channels and partners to generate growth.
‘There’s an evolution of connectivity,’ he says. ‘I think the automotive space was one of the first to realise that connecting things drove cost out of the equation.’
‘It’s really brought us close to the automotive industry and they’re thinking around what vehicles are now, there’s a merging of knowledge. In return they can understand consumer preferences.’
‘I think collaboration is very important, there was a time where big systems integrators thought they could do everything, and that is different now. There’s always going to be key partners and parts of the service and we have a big ecosystem of partners in all of our verticals.
‘The expectation of connectivity is going to probably accelerate a pull through of technology across the space. We are not fussy on whether we do this directly or indirectly; there are parts of the market in auto and other verticals that already have relationships with resellers and we have a long history in actually working with those partners.’
Coverage is vital for connected cars to seamlessly work across different regions, and for Vodafone,
this remains a major barrier when it comes to succeeding in the market.
Matt Key says: ‘Getting coverage in all markets across the whole EU is a huge barrier, and companies that have the biggest coverage are setting themselves up for connectivity ties. Also, those that have good consumer interfaces, portals and experiences. Those are the main things we look for in carriers as we try to find the right one to partner with.’
It is one thing to connect a car and another to sell it to the consumer, making customer acceptance of the technology a vital part of any strategy. This is something that Ford’s Abraham Philip believes will be a deal breaker when it comes to market success, claiming there can’t be growth until consumers understand the value of a connected car.
‘Growth in market will really be based on customer acceptance. We need to make sure customers understand that we aren’t looking to make more money out of their data. On the other hand we need to make sure we protect our customers and vehicles and prevent unauthorised use of the vehicle.
‘The connected space is huge; it’s an untapped market which, when brought to its full extent, will lend itself to autonomous driving.
'You can see where this can eventually end up and that’s a long way off. Public acceptance has to happen, but as we talk about the connected space it gives customers the chance to use new features and it starts to bring synergies between different players that weren’t players before, such as mobile networks.’