By the Maravedis-Rethink RAN research team
Mobile operators know that, if they are to have more than a ‘dumb pipe’ role in the internet of things, they will need to cooperate, using their combined weight to influence standards and support global systems.
This is sparking a number of alliances and cooperation deals focused on applications such as smart grid, industrial internet and smart home, and also one of the most immediate IoT markets, the connected car. In this area, Deutsche Telekom and China Mobile have formed a joint venture focused on China's exploding automotive sector.
The 50:50 JV, called Connected Car, will see the German telco contribute its existing automotive telematics platform, and China Mobile will provide the LTE network to support the services, plus integration and the resources of its widespread channel organization.
"Connected Car is a strategic initiative within Deutsche Telekom, while China is of strategic importance for our Connected Car business. The partnership with China Mobile is therefore strategically of utmost importance to Deutsche Telekom," said Deutsche Telekom board member Reinhard Clemens, in a statement.
The venture will create a cloud-based platform based on DT’s technology and deploy network and hardware elements where these are needed on top of China Mobile’s existing infrastructure. The JV will also develop content services, and integrate and operate the systems.
The scale of the market is important for Deutsche Telekom to extend its reach beyond its own territories. There were 137m cars on the road in China at the end of 2013, up from 24m a decade ago, and DT claims the number of connected cars will reach 68m in 2018. The venture will work with the automotive sector to deploy services in new vehicles but also to retrofit existing ones. It will become operational at the beginning of 2015.
One of the most aggressive mobile operators in the connected car world is AT&T, which says it added 500,000 connected cars to its network in the third quarter of this year, bringing its total to two million in the US. This growth shows why AT&T is so involved in the sector, as its traditional SIM-only business added 400,000 subscriptions in the same quarter. Connected cars and their lucrative data plans will likely be one of the main expansion targets of cellcos over the next few years.
At a recent CTIA panel, AT&T’s chief executive of its mobile and business group, Ralph de la Vega, said the connected car would change the entire wireless industry, and added that research suggested there would be 10m connected US cars within the next few years.
AT&T wants to ensure that all occupants of a car are able to use data on the go, whether it’s the driver using GPS navigation, making hands-free calls or listening to podcasts, or perhaps putting Netflix on to silence the kids in the back. AT&T sees the potential revenue from this data, and wants to get in on the action ahead of the competition – in both new cars and on older models.
The other major benefit that arises from the connected car is the telematics and usage data that can be sent to the car’s manufacturer for analysis, allowing a car to more easily communicate to its driver that it needs maintenance or that their driving style is shortening its service life. This data can also be leveraged by insurance providers, but other more general data (such as time of use or road condition) could be passed or sold on to municipalities charged with maintaining the road surface. A number of apps already use the telematics data to provide car-tracking and fuel consumption information to consumers.
On the network side of things, if AT&T builds out its 4G network coverage to include densely travelled locations (read highways) it can guarantee that streaming connections won’t be lost during cell tower handoffs or through gaps in the coverage. Similarly, a 4G network provides better bandwidth than the 3G handsets and tablets in the car might be able to get – especially if a tablet or laptop lacks a cellular radio entirely. Similarly, when the car is parked up, perhaps on an idyllic fishing vacation in the countryside, you can keep the kids happy with a solid internet connection – bringing the comfort of high speed internet to the great outdoors.
Many more connected car projects will emerge from AT&T’s Drive Studio, located in Atlanta, where the company tests and develops its technologies and products. This lists a number of partner companies and sponsors, including Ericsson, Qualcomm LG, QuickPlay Media, Red Bend Software, VoiceBox, Synchronoss, Accenture, Amdocs and Jasper Wireless.