Automotive and mobile – Is this a match made in connected car heaven?

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(BLOG) — The forecasts are impossible to ignore; the connected car industry is about to take off, writes Telefónica Digital’s Pavan Mathew. Recent research suggests that by 2022 there will be 1.8 billion automotive M2M connections in cars across the world. This will comprise 700 million connected cars and 1.1 billion aftermarket devices for services such as navigation, usage-based insurance, stolen vehicle recovery (SVR) and infotainment.

But for these predictions to come true, the contrasting worlds of the mobile and automotive industries must work together. However, the structures of the sectors are very different. One of the biggest hurdles they must overcome is the need for mobile network operators (MNOs) to operate on a global level.

The auto industry is global in nature with virtually all automotive original equipment manufacturers (OEMs) selling in almost every country. There is some variation, but it is, broadly speaking, a global industry. The mobile industry, by contrast, is still evolving from a national focus, often based on issued licences.

MNOs’ machine-to-machine (M2M) teams are starting to focus on meeting the requirements from automotive OEMs for global coverage, but there are still issues stifling this progress. All MNOs can nominally serve any device in any country in the world through roaming or the slightly more sophisticated MCC-901 global SIM. This was acceptable for roaming handset users, but is not sufficient for the demands of the Connected Car.

Existing roaming rates are very challenging to the Connected Car business models, especially with the envisaged high-bandwidth applications. Furthermore, in some countries (Brazil, China, India and much of the Middle East) the use of permanent roaming SIMs is prohibited for a variety of reasons.

MNOs are evolving their approach to address the global opportunity. Rather than their tariffs being an add-on to a national or regional offering, they have had to rethink their approach and consider how their solution can be applied and delivered on a global scale.

The first thing they have done is to establish global alliances. There are now essentially four of these: GMA (DT, Orange, and Telia), Vodafone and partners, AT&T and partners, and the alliance between Telefónica, DoCoMo and partners. These alliances will form the frameworks for commercial negotiations to offer potential clients a much more appropriate rate based on local pricing.

In most cases this also goes hand-in-hand with the second element they have introduced: remote OTA (over-the-air) provisioning. This will facilitate connection to a local network and IMSI (International Mobile Subscriber Identity) swapping for multiple MNO accounts where necessary.

MNOs are moving to create the commercial and technical solutions that are demanded by automotive OEMs. For connectivity to come in cars, these two industries must get connected first. The good news is that this is well underway.

Pavan Mathew, Telefónica Digital
Pavan Mathew, head of Connected Car, Telefónica Digital

The author is Pavan Mathew, head of Connected Car,  Telefónica Digital
Pavan is a 15-year veteran of the automotive and telematics industry. Prior to Telefónica, Pavan held senior level positions in engineering, marketing and business development with General Motors and OnStar. He holds a B.S. in Mechanical Engineering, M.S. in Engineering Management and an M.B.A. from the University of Michigan’s Ross School of Business.

 

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