Telcos have been shut out of some major private 5G networks in the automotive sector, but prospects are much better for involvement in connectivity in the vehicles out on the road after they have been made.
At the same time though, telcos need to play their cards carefully to avoid pricing themselves out of a market sensitive to the soaring cost of connectivity alongside all the other electronic components vehicles have on board these days. Cars have been named variously rolling computers, smartphones on wheels and software-defined vehicles, as wireless connectivity both inside and outside becomes critical not just for autonomous functions but also for navigation and delivery of infotainment.
The rise of advanced driver assistance systems (ADAS) and associated vehicle-to-everything (V2X) technology has dominated the story of evolving vehicle connectivity, but the incorporation of cars into the digital arenas of consumers is just as critical for competitiveness. And while ADAS is being driven by the needs of autonomous driving, it is the associated functions that improve safety by reducing incidences of collisions with other road users, whether vehicles or pedestrians.
That will be enhanced not just by connectivity between vehicles and roadside infrastructure, but also with each other, as well as with the smartphones of bystanders. This entails assembly of a loosely defined mesh encompassing vehicles and users interconnected by V2X infrastructure, including the public 5G network and also side link communications defined within the cellular C-V2X standards.
Then on the infotainment and personal communication fronts, cellular and WiFi integration will be paramount, in essence replicating in the car the combination of broadband and WiFi that is commonplace in the home. This is prime territory for telcos which already provide that home connectivity, which inevitably so far has tended to favor the big Tier 1s that provide fixed and mobile services.
But unlike in the home, services have to be integrated with the vehicle itself with its plethora of electronic components and devices, adding an extra dimension to the task. This is where some operators have come unstuck, failing to address this extra layer of complexity with sufficient flexibility, and an eye on cost sensitivity for the auto OEMs.
Deutsche Telekom has embraced this new territory for operators more successfully than many of its peers. A key enabling step is to forge partnerships with major OEMs, as DT has done with BMW Group, starting logically with upmarket cars where consumers are less cost-conscious and more willing to pay over the odds for features, before they become commoditized in lower priced vehicles. DT and BMW announced in September 2021 that they were incorporating 5G connectivity in vehicles through personal embedded SIMs (eSIMs), effectively making the car just another connected device in the customer’s personal ecosystem, alongside the smartphone and smartwatches for example. This was presented as BMW’s Mobility Connect option.
The ability to hook up smartphones via Bluetooth to in-vehicle consoles was introduced some years ago and is now supported even in economy models. The difference with Mobility Connect is that the car itself is hitched to the user’s ecosystem rather than the other way round, with the smartphone no longer needed. Mobility Connect is now offered as an add on mobile service for an extra €9.95 per month and can be turned on via a mobile app, which is then invoked via the vehicle’s resident eSIM. Furthermore, the user’s personal profile can then be downloaded to any vehicle enabled with an eSIM, including hire cars, in principle.
This also facilitates WiFi communications in the car for streaming or transloading content by setting up an in-vehicle WiFi hotspot serving up to 10 connected devices.
BMW claimed to be the first premium manufacturer to bring 5G to a globally available production vehicle with DT offering the matching 5G connectivity for cars.
AT&T, however, is heading in the same direction following an alliance with General Motors (GM), announced in August 2021, to install 5G connectivity in vehicles from 2024 onwards, while also increasing transmission bit-rates for older vehicles made from 2019 onwards that have inbuilt 4G LTE connectivity.
Although not adding 5G connectivity as quickly as some partnerships, GM and AT&T are building a dedicated 5G core designed to enhance coverage around roads and speed up downloads as well as over the air software updates, and navigation. It is also aimed at autonomous driving, following a two-year collaboration, including test-driving connected vehicles in GM’s 5G proving grounds in Milford, Michigan. It is then aimed at integrating C-V2X communications with public 5G.
It is also worth looking to China for pointers, where progress is more advanced on some fronts and more backward in others. On the one hand, China is more advanced in terms of foundational connectivity because of its rampant 5G roll-out combined with its decision to run with C-V2X from the outset, without any flirtation with the WiFi-aligned alternative known as dedicated short-range communications (DSRC). China also has the advantage that consumers are less privacy-conscious and more willing to share their data with vehicle makers, which are then better placed to develop more advanced personalized services.
Against these advantages, China’s automotive industry was until recently little more than a manufacturing arm for American and European OEMs. This held them back from more advanced capabilities, but they are now becoming more self-reliant in line with the wider geopolitical schism with the west, and competing themselves on infotainment and personalized services through partnerships, in this case with the local Internet tech giants, Tencent, Alibaba and Baidu. The Chinese OEMs are though still dependent on semiconductor makers that dominate the automotive industry, such as Qualcomm in the USA, NXP in the Netherlands and Israel’s Autotalks.
These companies have the opportunity to cut the teeth of emerging automotive capabilities in China before other markets over the next few years, exploiting that potent combination of widespread 5G coverage and incorporation of C-V2X in vehicles.