As smartphone markets saturate, and the availability of free WiFi hotspots grow, global MNOs are turning to new markets to support their profitability. Automobiles have long been an area of interest, and AT&T has been the biggest player in that market for some time. British Telecom’s EE network has just announced its own fleet telematics bid too, as this market heats up.
AT&T says it now connects 24mn cars on its networks, with over 3mn of those being fleet vehicles. It adds that it has over 1mn retail subscribers for in-car WiFi too. Collectively, these 24mn vehicles used 45mn GB of mobile data between March 2017 and September 2018, which comes to an average of 0.09 GB (90 MB) per month per vehicle – a sign of how little actual data is involved in fleet telematics, and therefore how lucrative these services can be.
Of course, the 45mn GB is actually mostly being used by the in-car WiFi subscribers, which would put the numbers at 2.3GB per car per month for those unlimited plans (a testament to how little time people actually spend in their private vehicles). AT&T advertises its unlimited packages, throttled after 22GB, as starting from $20 per month, but you can add a car to one of its grouped Mobile Share Plans for $10/month.
Notably, these are currently only offered in cars that have integrated WiFi capabilities. If you want in-car WiFi but don’t have a compatible car, then AT&T will sell you a Harman Spark OBD-II dongle for $80, which you can then buy a connectivity package for.
In Q3, AT&T said it added 2mn cars to its portfolio, bringing it to 24mn. At linear growth, it is adding 8mn a year, but there’s a lot of room to grow in this market, before it has to worry about saturation – especially as automakers turn to it to provide connectivity for new cars sold in showrooms.
To that end, AT&T says it has relationships with 29 global brands: Airstream, Audi, BMW, Buick, Cadillac, Chevrolet, Chrysler, Dodge, Ford, Freightliner, GMC, Honda, Infiniti, Jaguar, Jeep, Land Rover, Lincoln, Mercedes-Benz, Navistar, Nissan, Opel, Porsche, Ram, Skoda, Subaru, Tesla, Vauxhall, Volvo and VW.
The MNO points to some recent wins, which has seen Subaru pick it to provide in-car WiFi hotspots, on top of Subaru’s StarLink vehicle recovery, diagnostic, and safety package. Nissan has expanded its deal to include the US and Canada, for connected car services, and Audi says its 2019 vehicles sold in Canada will be using AT&T’s network for IVI and in-car WiFi. Audi has been a US customer since 2014, and Airstream’s trailers are now using AT&T to provide WiFi hotspots.
With its heaviest WiFi users only accounting for 2.3GB of usage per month, AT&T should be able to see the RoI that it can achieve by ensuring good coverage on major roadways. Anecdotal evidence suggests that traffic jams can have crippling effects on mobile networks, as drivers and passengers begin to use their phones in slow or stationary traffic. That problem will present itself too for in-car WiFi hotspots, and so MNOs need to invest in capacity to make sure this does not cause outages – and therefore potentially contribute to customer churn.
AT&T points to Gartner figures that say there will be 80mn shipments of connected cars in 2021 globally, a market that will grow at 36% CAGR, up from 17mn shipments in 2016. That puts the 2021 installed base at 305mn cars, and at its current growth rate, AT&T would have around 15% of the global share. The MNO has global ambitions, and stresses its Global SIM program, that has 500 carriers’ worth of roaming agreements. It says it connects vehicles in 57 countries currently, with 12 of these available for in-car WiFi.
Daimler Trucks expanded its North America connected fleet deal to include Australia and twenty European countries, and Audi and its Skoda marque signed up for eCall services in Russia, Belarus, and Kazakhstan. Volvo is now a global customer for in-car WiFi and telematics, expanding like Daimler on a North American deal. A close integration with Nokia’s WING IoT PaaS, and a deal with the APAC-centric Bridge Alliance are likely going to expand AT&T’s share too.
AT&T’s announcement is awash with mentions of autonomous driving and 5G, but if it is sincere about providing connectivity for self-driving vehicles, it needs to be heavily investing in network capacity upgrades, as self-driving vehicles are going to require orders of magnitude more data than the current in-car WiFi subscribers burden AT&T with. To this end, AT&T is working with Qualcomm and its C-V2X technology, with Ford and Nokia as partners too. A security-focused blockchain project with Ericsson was also namedropped.
As for BT’s EE, the company has unveiled its Auto Mate service, which centers around an OBD-II dongle. On a two-year contract, the package costs £49 ($64) upfront, and then £11 ($14.40) per month. A one-year deal is £190 ($248.71) up front, but carries no monthly fee, but if you want to extend by another twelve months, that will cost you an additional £141 ($184.57).
The two-year deal will cost you £313 per vehicle, while a one-year deal extended to two is going to come in at £331. Stacking two one-year deals is going to cost you £380, and so EE is trying to encourage customers to opt for the two-year packages.
The fees give customers access to the Auto Mate portal, in which they can monitor the current status of their fleets. EE has a guide, which is actually quite informative, should you want to explore what that looks like. The main features are knowing where your vehicles are, and monitoring their condition, with the OBD-II dongle piping engine codes up to the dashboard.
Of course, there are other features, such as speed monitoring, traffic updates, and weather forecasting, but a manager can also monitor historic individual trips in the ‘snail trail’ mode. This will highlight driving events and driver behavior, which can then be used to improve driving habits – or even discipline staff. The Report Wizard will also churn out files that can be fed to ERP and CRM tools.