& cplSiteName &

AT&T Tests Drivers' Desire to Pay for LTE

Sarah Thomas
3/12/2014
50%
50%

Wireless operators are turning cars into big mobile hotspots, but the question they are now grappling with is: Are their customers willing to pay for them as if they were mobile hotspots?

AT&T Inc. (NYSE: T), for one, is counting on it. The carrier is lending its 4G LTE network to Audi's new A3 sedans and is offering customers two ways to pay: a six-month plan for $99 and 5 GBytes of data or a 30-month plan for $499 and 30 GB of data, both after a six-month free trial. Come this summer, AT&T customers will be able to add their cars as another "device" on their Mobile Share data plans and keep tabs on how much data they've consumed each month. (See Audi Taps AT&T for In-Car LTE, AT&T Ups the Stakes in Connected Cars, and AT&T Beefs Up Connected Car Efforts .)

The data plan will give drivers access to Audi Connect services, including navigation, music streaming, and the wide world of the Internet from their dashboards. Audi has offered 3G connectivity on a monthly basis in the past and says it found that drivers preferred to pay in six-month or 2.5-year plans. (See Euronews: Vodafone Connects With Audi, VW.)

Whether or not customers will cough up for the service at all is up for debate, however. New research from Heavy Reading suggests that consumers are reluctant to pay for many connected car services and are even averse to others, for personal privacy reasons. But Danny Dicks, Heavy Reading analyst and author of the report, "Telecom Opportunities in Transportation Telematics & ITS," believes Audi drivers may be more likely to pay for connectivity based on how AT&T has structured the billing. (See Finding the Value in Transportation Telematics.)

"I think AT&T’s shared data plan idea is a good one. Adding the car connectivity won’t seem like adding a whole new subscription -- just adding another 'family member,' which probably looks like a better value to most drivers," Dicks tells Light Reading.

In general, however, Dicks believes that both connectivity and incremental services might be hard to sell a smartphone owner who has free apps or existing paid-for apps that can do something close to what’s being offered on the telematics platform: "The connected car idea needs to demonstrate real utility that can’t be replicated over existing devices and connections."

Audi and AT&T's service is similar to one Volvo has been offering with Ericsson AB (Nasdaq: ERIC) for the past few years, Volvo OnCall, which it rebranded at CES to Sensus Connect. The service comes with connectivity free for 12 months with a new Volvo, followed by a subscription, and includes infotainment features such as music streaming and restaurant location, roadside assistance, safety features, and -- a popular one in Sweden -- the ability to remotely heat the car before getting in.

Dicks says that Ericsson has had to find the services that work for Volvo, which happen to primarily be mashup style infotainment apps, but that operators might find luck looking into other opportunities for monetizing connected cars that have nothing to do with the driver or passenger.

For example, he suggests revamping traffic system modeling, which depends on accurate information about vehicle movements. It's currently an expensive and time-consuming process to collect this data via roadside surveys or automatic license plate recognition technology that ends up not always being accurate.

"But connected vehicles can generate just the sort of data the transport modelers at highway agencies and local government authorities need -- so there should be a business model there," he says. And, if operators own the SIM on which the data is collected, this could be a good opportunity for them, too.

It's still early days out on the connected road, but it's the area of machine-to-machine communications that is attracting the most interest from operators, and the opportunity will become more significant when the ROI issues are worked out. AT&T's subscription service with Audi will be a good test of consumers' willingness to pay in the US.

— Sarah Reedy, Senior Editor, Light Reading

(31)  | 
Comment  | 
Print  | 
Newest First  |  Oldest First  |  Threaded View        ADD A COMMENT
Page 1 / 4   >   >>
Susan Fourtané
50%
50%
Susan Fourtané,
User Rank: Blogger
3/17/2014 | 4:46:39 AM
Re: Would you pay?
Sarah, 

I believe you could get a remote heating system for your car in Chicago.

-Susan
Susan Fourtané
50%
50%
Susan Fourtané,
User Rank: Blogger
3/17/2014 | 3:34:49 AM
Re: Would you pay?
Sarah, 

Sure. Most of these features and some others that most likely will follow are going to built in the new models in a not distant future. Most of these things are going to become common and not expensive for the manufacturers. It's just a matter of time. 

-Susan
David Dines
50%
50%
David Dines,
User Rank: Blogger
3/14/2014 | 4:14:53 PM
Re: Would you pay?
Great discussion.  I personally would not pay a lot extra for this.  I have my smartphone already.  I would like to have seamless integration with that for navigation and POIs. If my passengers want to watch video on their smartphone, let them use their own allotment.

As for the telematics info, I would not want to pay a lot extra for that either because it should be included in the vehicle, the actual data traffic required should be so small that the manufacturer should be willing to pay for it, they get valuable data that should more thatn offset the cost.

 
Sarah Thomas
50%
50%
Sarah Thomas,
User Rank: Blogger
3/14/2014 | 2:33:11 PM
Re: Yet another monthly/semi annual fee ?
You're not the only one (see the discussion thread!). For a car, 6 months is certainly more appealing than monthly though, and at least it's on the same bill as other mobile services, but still. It's asking a lot.
derac7020
50%
50%
derac7020,
User Rank: Lightning
3/14/2014 | 10:46:01 AM
Yet another monthly/semi annual fee ?
Maybe I'm just the grinch here but is anyone else growing weary of these monthly fees ?  Amazon, Netflix, Hulu, Spotify, Sirius just to name a few.  Do I really want a phone bill for my car ?
Sarah Thomas
50%
50%
Sarah Thomas,
User Rank: Blogger
3/14/2014 | 9:46:21 AM
Re: Would you pay?
But most of those features are value-adds because you bought a high-end car. They don't have subscriptions. I think we'll see more of these costs being built in, if the subscription model doesn't pan out.
mendyk
50%
50%
mendyk,
User Rank: Light Sabre
3/14/2014 | 8:53:40 AM
Re: Would you pay?
Do you know of any truly "cool" people who have bought their way into that club?
Susan Fourtané
50%
50%
Susan Fourtané,
User Rank: Blogger
3/14/2014 | 8:25:10 AM
Re: Would you pay?
Sarah, 

The cool factor has been important since cool exists. :) 

Paying by app is convenient for those who don't want, or need too many extras.

-Susan
Susan Fourtané
50%
50%
Susan Fourtané,
User Rank: Blogger
3/14/2014 | 8:14:56 AM
Re: Would you pay?
Mitch, 

Yes, there are remote systems available to start and stop the heating of your car, lock and lock the doors, and start the engine. 

I hope you were not in a hurry when you rented that car in Santa Clara. They should have told you how to start the car, or ask if you knew the system at least.

-Susan 
Mitch Wagner
50%
50%
Mitch Wagner,
User Rank: Lightning
3/13/2014 | 6:24:33 PM
Re: Would you pay?

Aren't there already options to enable you to start your car and start heating your car remotely?

Another question that needs to be considered is why a person would pay for a data plan when they already have a phone in their pocket.

I rented a car in Santa Clara last week with some kind of keyless ignition system. Avis just handed me a key ring with a couple of fobs on it, but no key. It took me 20 minutes to figure out how to start the car! The advantage, I suppose, is that you could theoretically start and operate your car with your keys in your pocket or purse. But that doesn't work in practice, because you have to take the fob out of your pocket to unlock the car door.

Page 1 / 4   >   >>
From The Founder
Cisco's Conrad Clemson, recently promoted to head up the company's Service Provider Apps & Platforms developments, talks to Light Reading's Founder and CEO Steve Saunders about how he's bringing cloud video, mobile and virtualization together to empower network operators.
Flash Poll
Live Streaming Video
Charting the CSP's Future
Six different communications service providers join to debate their visions of the future CSP, following a landmark presentation from AT&T on its massive virtualization efforts and a look back on where the telecom industry has been and where it's going from two industry veterans.
LRTV Interviews
Masergy: Ability to Adapt Key for NFV

1|16|17   |   6:40   |   (0) comments


Speaking at Light Reading's 2020 Vision in Rome, Masergy's VP, Global Technology, Ray Watson, said agility is key to providing the mix and match NFV-based services that are driving business for the managed service provider today.
LRTV Interviews
Equinix: The Data Explosion

1|13|17   |   4:16   |   (0) comments


At Light Reading's 2020 Vision in Rome, Eric Schwartz, president of EMEA, Equinix, talked about how Equinix is helping its customers manage the influx of data today, and how it's preparing for a future filled with millions of connected IoT devices.
LRTV Interviews
Heavy Reading: The Changing Data Center Landscape

1|12|17   |   6:05   |   (1) comment


At Light Reading's 2020 Vision event in Rome, Heavy Reading's Senior Analyst Roz Roseboro talks about how virtualization is impacting data center evolution and how that evolution is affecting the relationship between service providers, data center operators and public cloud providers.
LRTV Interviews
Boingo: Prepping for Millions of Devices

1|12|17   |   5:07   |   (1) comment


At Light Reading's 2020 Vision in Rome, Boingo's CTO Derek Peterson discusses how wireless operators will address the needs of low-bandwidth and high-bandwidth apps at the same time, the need for more MHz, the impact of IoT and more.
LRTV Interviews
Comcast Shows Off Gig Gateway at CES

1|11|17   |     |   (1) comment


With its largest presence at CES in years, Comcast took the wraps off its long-awaited gigabit gateway and a new platform for managing the home WiFi network. Light Reading Senior Editor Mari Silbey sat down with EVP Chris Satchell to discuss the latest Comcast advance, and met with VP of Product Strategy and Development Andrea Peiro to walk through a demo of the ...
LRTV Interviews
Colt: End-to-End Key for 2017

1|10|17   |   6:21   |   (0) comments


At Light Reading's 2020 Vision Executive Summit in Rome, Nico Fischbach of Colt said having a multi-carrier, end-to-end service proposition is going to be key for 2017 -- and SD-WAN is instrumental in making it happen.
From the Founder
Cisco's Clemson on Mobile Cloud Video

1|9|17   |     |   (1) comment


Cisco's Conrad Clemson, recently promoted to head up the company's Service Provider Apps & Platforms developments, talks to Light Reading's Founder and CEO Steve Saunders about how he's bringing cloud video, mobile and virtualization together to empower network operators. "If you think about where we're going… whether it's a mobile application, or a video ...
LRTV Custom TV
VMware Telco NFV Solutions – Preparing for 5G & IOT

1|9|17   |     |   (0) comments


Shekar Ayyar, EVP & Corporate Strategy/General Manager of Telco for VMware, discusses VMware's Telco NFV solutions role and foundation for the Imminent Arrival of 5G & IOT.
LRTV Interviews
Heavy Reading: Big Video Set to Disrupt

1|6|17   |   4:39   |   (0) comments


At Light Reading's 2020 Vision Executive Summit in Rome, Heavy Reading's Adi Kishore talks about the challenges of managing and monetizing bandwidth-intensive video, and how service providers will need to transform their networks to cope with the big video explosion.
LRTV Interviews
Heavy Reading: IoT Set to Disrupt

1|5|17   |   7:07   |   (0) comments


Heavy Reading's Senior Analyst of IoT, Steve Bell, tells Light Reading how the Internet of Things (IoT) will transform service provider markets, business models and mindsets, and how virtualizing the network core and Fog networking is key to meeting the agility and flexibility demands of IoT in the future.
LRTV Custom TV
Ensemble SmartWAN Explained

1|5|17   |     |   (0) comments


Ray Le Maistre and Prayson Pate, CTO of the Ensemble division at ADVA Optical Networking, discuss the details around the recent Ensemble SmartWAN announcement from ADVA and its potential impact on the SD-WAN movement as it goes virtual.
LRTV Interviews
Telstra Shares Digital Dos & Don'ts

1|4|17   |   3:21   |   (0) comments


At Light Reading's 2020 Vision Executive Summit in Rome, Telstra's Managing Director of EMEA Tom Homer shares his insight into what makes a good partner in today's digital world.
Upcoming Live Events
May 15-17, 2017, Austin Convention Center, Austin, TX
All Upcoming Live Events
Infographics
Hot Topics
Ericsson: 5G Heralds 'New' New Economy
Mari Silbey, Senior Editor, Cable/Video, 1/12/2017
5G: Another Next-Generation Disappointment?
Iain Morris, News Editor, 1/10/2017
CES 2017: WIC's Picks & What Made Us Sick
Sarah Thomas, Director, Women in Comms, 1/10/2017
IBM, FDA Look to Blockchain to Secure Health Records
Scott Ferguson, Editor, Enterprise Cloud, 1/12/2017
Like Us on Facebook
Twitter Feed
BETWEEN THE CEOs - Executive Interviews
Light Reading founder and CEO Steve Saunders chats with Sportlogiq CEO Craig Buntin about sports data analysis.
Eyal Waldman, CEO of Mellanox Technologies, speaks to Steve Saunders, CEO of Light Reading, for an exclusive interview about the 100 GB cable challenge, cybersecurity and much more.
Animals with Phones
Live Digital Audio

Playing it safe can only get you so far. Sometimes the biggest bets have the biggest payouts, and that is true in your career as well. For this radio show, Caroline Chan, general manager of the 5G Infrastructure Division of the Network Platform Group at Intel, will share her own personal story of how she successfully took big bets to build a successful career, as well as offer advice on how you can do the same. We’ll cover everything from how to overcome fear and manage risk, how to be prepared for where technology is going in the future and how to structure your career in a way to ensure you keep progressing. Chan, a seasoned telecom veteran and effective risk taker herself, will also leave plenty of time to answer all your questions live on the air.