Telecoms companies are integral to car of the future

Telecoms companies are integral to car of the future

Telecoms companies are moving beyond their traditional service provision to maximise their revenue from the development of connected cars. Far from being the ‘dumb pipe’ down which other operators make their money, agile telcos are already looking to carve out a profitable section of the market for themselves.

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Telecoms companies are integral to car of the future

Telecoms companies are moving beyond their traditional service provision to maximise their revenue from the development of connected cars. Far from being the ‘dumb pipe’ down which other operators make their money, agile telcos are already looking to carve out a profitable section of the market for themselves.

Connected and driverless cars will rely on 4G networks to function, with machine-to-machine (M2M) communication between vehicles, their systems and roadside infrastructure. Telcos will move from a role providing desirable extras to one where they are a fundamental operational requirement in the next 20 years.

There is some way to go before the public plug their cars into the grid however. Only half of drivers in the UK have a satnav device and currently ‘connectivity’ is often no more than a person using their mobile phone to navigate.

The desire of telcos to augment the ‘human-to-human’ market with ‘machine-to-machine’ communications in autonomous cars is obvious. Attracted by new subscriptions and a chance to beam entertainment, information and other high-bandwidth video to people’s cars, telcos are already forming partnerships with major car manufacturers. AT&T is working with Nissan and General Motors, for example, to supply wireless communications, Bluetooth and in-car entertainment services.

The partnerships established now are the prelude to even greater integration in the near future. For the telecoms companies, picking how and where to play is key. Car manufacturers are open to working with telcos while remaining closed to the software giants. There is an understandable wariness about handing Google, Apple or Microsoft added advantage in their market.

Telematics provision offers particular growth potential and some telecoms companies are already buying into this market. Vodafone’s recent acquisition of Italian car technology company Cobra or Verizon’s purchase of Hughes telematics have allowed both these telcos to offer a range of telematics and in-car security services.

Systems provided by telcos are an integral part of the autonomous vehicle’s Car Area Network - its security systems, telematics services and other sensor-based devices. Moving beyond entertainment services and into these areas should transform the relationship between telcos and car manufacturers into an important partnership.

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