I hear quite often that telecommunications players are only just entering the connected car market and don’t have a great deal of value to add other than connectivity. Whether enabling telematics, machine-to-machine or connectivity within the vehicle, it isn’t a new topic for these organizations. The topic is changing though, as all technologies do over time, from telematics and M2M to the “Internet of Things,” connected car and autonomous driving.
Historical experience with technology is not the only factor that’s important to this discussion. Providing services and having direct contact with the end user are new concepts to most OEMs. The model in which a car is sold and there is no further interaction with the buyer, other than for repairs or a new car, is quickly going away. OEMs cannot survive with this model as other players will intervene in this customer relationship – mobile network operators, and competitors such as Google and Apple.
No one said this migration was easy. For those who have spent their careers in the telecommunications and IT industry; the view of performance, quality and reliability is quite high in the automotive industry. Although the standards imposed by network operators for network performance are also high there is still a gap. While the telecommunications industry talks about carrier-grade products, the automotive industry talks about automotive-grade products, which have even higher expectations. Consider this – the goal is close to zero returns for technology in a vehicle with the expectation that it will last for at least 10 to 15 years. There are also automotive-specific standards that need to be met. Although starting with carrier-grade products is a great start, they will still likely need additional work to be considered automotive-grade.
Embedded SIM cards is another topic where the intersection of these industries will become even more important. As regulation – such as the European E-Call mandate – progress, every new vehicle will need an embedded SIM so it can call for assistance if an accident occurs. Once this happens, the question becomes: What other functionality can that SIM be used for?
Multiple telecom technologies will exist in the connected car. Beginning with the 2G, 3G, 4G/LTE and moving toward “5G,” the key factor to consider is the life cycle of a car. Consumers usually upgrade their smartphones every two years, but not their cars, so longer-term functionality must be considered. In the near future Wi-Fi, Bluetooth LE and potentially 802.11p and DSRC will be a part of this discussion.
The last area to mention is billing. As OEMs move closer to end users and potentially want to offer direct services to them related to their vehicles, there will need to be a bill. Billing an end user, and especially billing an end user on a monthly basis for some form of ongoing subscription, is a foreign concept to the automotive industry. This is another area in which telecommunications companies can be an enabler to help migrate the connected car closer to being a service.
Want to learn more about these topics? Join RCR Wireless News’ April 15 driving profits through the intersection of telecommunications and automotive webinar to hear from industry experts. The link to register is here. Also, on that day a new feature report on this topic will be available for download at no charge.
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Claudia Bacco, Managing Director – EMEA for RCR Wireless News, has spent her entire career in telecom, IT and security. Having experience as an operator, software and hardware vendor and as a well-known industry analyst, she has many opinions on the market. She’ll be sharing those opinions along with ongoing trend analysis for RCR Wireless News.
