In June 2014, Machina Research published its annual M2M Communications Service Provider (CSP) Benchmarking Report. The report looks at technical and commercial best practice for CSPs such as AT&T, Deutsche Telekom, Telefonica and Vodafone in providing connectivity and associated services across all verticals. This article examines the findings of that study with particular reference to the automotive sector.
For CSPs, automotive contract wins are highly valued, not least because they tend to represent very high volume deals. During the last 12 months, Vodafone announced wins with VW/Audi and Fiat, while Telefonica and KPN announced a joint win with Tesla, representing a first contract win for a multi-party bid from members of the M2M World Alliance, as discussed below.
The demands of the automotive sector are global, and the ability to deploy a single solution across multiple territories is highly prized. As a result, the automotive sector has been the driving force behind a number of initiatives to provide more globally homogenous solutions.
The first initiative involves global alliances. No CSP has networks across the entire world, and while support via roaming agreements is acceptable for some applications, regulation and the cost of roaming data have mitigated against this being a long-term answer. Increasingly CSPs recognise that they need to provide multi-local connectivity, with a local operator in each market. Over the last few years CSPs have been forming global alliances to manage this multi-country connectivity. Examples include the Global M2M Association formed by Deutsche Telekom, Orange and TeliaSonera, and the M2M World Alliance grouping that has coalesced around a group of eight major CSPs using the Jasper Technologies M2M platform. Vodafone, together with its partners, could be considered a third global alliance. There was also a new addition recently, with the formation of the M2M Bridge Alliance, which brings together a set of Asian operators.
The second initiative is an extension of the alliances, and involves the localisation of connections. Using a system known as “Subscription Management,” and a new form of SIM, known as “eUICC,” CSPs within these alliances are launching services that allow an embedded SIM card within a vehicle to switch subscriptions from one CSP to another. This localisation ability is an important one for the auto sector, as it simplifies the supply chain substantially since the vehicle can be deployed anywhere and the SIM credentials for the local market downloaded to the vehicle depending on where it becomes active.
Automotive is one sector where the CSPs are seeking to innovate. Take, for instance, AT&T’s initiatives around the Drive Platform and Drive Studio, or Deutsche Telekom’s Business-2-Car open infrastructure for connected car services. These moves are intended to position the CSP as a lead partner for auto OEMs. In particular they are focusing on addressing issues of billing, i.e. how to charge for a range of services and data-generating applications, some of which are consumed directly by the consumer, some of which are not. This is an area where CSPs can clearly bring to bear a lot of specific expertise.
The connected car is a critical part of M2M for CSPs and it is driving innovation that will benefit both sides.