Light Reading
Audi and AT&T offer a 6- or 30-month LTE data plan for in-car connectivity as part of AT&T customers' Mobile Share plans.

AT&T Tests Drivers' Desire to Pay for LTE

Sarah Reedy
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
Page 1 / 4   >   >>
Susan Fourtané
50%
50%
Susan Fourtané,
User Rank: Light Sabre
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: Light Sabre
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.

 
SarahReedy
50%
50%
SarahReedy,
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 ?
SarahReedy
50%
50%
SarahReedy,
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: Light Sabre
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: Light Sabre
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 
FakeMitchWagner
50%
50%
FakeMitchWagner,
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   >   >>
Flash Poll
LRTV Custom TV
Distributed NFV-Based Business Services by RAD

7|18|14   |   5:38   |   (0) comments


With the ETSI-approved Distributed NFV PoC running in the background, RAD's CEO, Dror Bin, talks about why D-NFV makes compelling sense for service providers, and about the dollars and cents RAD is putting behind D-NFV.
LRTV Custom TV
MRV – Accelerating Packet Optical Convergence

7|15|14   |   6:06   |   (0) comments


Giving you network insight to make your network smarter.
LRTV Custom TV
NFV-Enabled Ethernet for Generating New Revenues

7|15|14   |   5:49   |   (0) comments


Cyan's Planet Orchestrate allows service providers and their end-customers to activate software-based capabilities such as firewalls and encryption on top of existing Ethernet services in just minutes.
LRTV Custom TV
Symkloud NVF-Ready Video Transcoding, Big Data

7|9|14   |   3:41   |   (0) comments


Kontron and ISV partner Vantrix demonstrate high-performance video transcoding and data analytic solutions on same 2U standard platform that is ready for SDN and NFV deployments made by mobile, cable and cloud operators.
LRTV Huawei Video Resource Center
The Evolving Role of Hybrid Video for Competitive Success

7|4|14   |   4:09   |   (0) comments


At Huawei's Global Analysts Summit in Shenzhen, China, Steven C. Hawley from TV Strategies speaks to us about the evolving role of hybrid video for competitive success.
LRTV Huawei Video Resource Center
How CSPs Leverage Big Data in the Digital Economy

7|4|14   |   4:48   |   (2) comments


Justin van der Lande from Analysys Mason shares with us his views on how telecom operators can leverage customer asset monetization with big data. His discusses the current status of big data applications and the challenges and opportunities for telecom operators in the digital economy era.
LRTV Huawei Video Resource Center
Accelerator for Digital Business – Future Oriented BSS

7|4|14   |   3:08   |   (0) comments


Mobile and internet are becoming intertwined; IT and CT are integrating; and leading CSPs have begun to transform to information service and entertainment providers. How should the BSS system evolve to enable this transformation? Karl Whitelock, an analyst at Frost & Sullivan, shares his views.
LRTV Huawei Video Resource Center
Orange Tunisia Discusses Multi-Band Antenna With EasyRET Solution

7|4|14   |   2:45   |   (0) comments


As new site acquisition becomes more difficult, Orange Tunisia has requested multi-band antenna to support UMTS and LTE innovation. Some things considered include reducing the cost of antenna maintenance and having high reliability antenna and EasyRET solution.
LRTV Huawei Video Resource Center
How Telefonica Spain Considers Antenna Selection for LTE Network Deployment

7|4|14   |   2:19   |   (0) comments


Tony Conlan, Global CTO of RAN, Telefonica, shares his opinion on antennas in LTE network deployment: Tower space is the premier requirement on antennas; reliability is important to reduce OPEX; and EasyRET solution will be helpful for antenna maintenance.
LRTV Huawei Video Resource Center
dtac Thailand: Multi-band Antenna & Capacity Solution for a Better MBB Experience

7|3|14   |   3:45   |   (0) comments


With the development of LTE, tower space and load are limited for new antenna, but users' capacity requirements are growing fast. To provide a better MBB experience, Panya Vechbanyongratana from dtac Thailand shared his experiences and antenna requirements.
LRTV Documentaries
BTE Panel: Network of the Future

7|2|14   |   1:00:57   |   (0) comments


Full-length video of the ATIS Panel Discussion: 'How Far Away Is the Network of the Future & What Does It Look Like?' from the Big Telecom Event (BTE) in Chicago.
LRTV Custom TV
Redknee Supports BH Telecom With Redknee Unified

7|2|14   |   6.14   |   (0) comments


Lucas Skoczkowski, CEO of Redknee, and Amir Orucevic, Director BH Mobile, discuss how the benefits of the Redknee Unified suite of products provide BH Telecom with innovation and leadership in the market, with the flexibility to launch services faster to the market, provide new and compelling promotions and pricing models, and combine services in order to drive ...
Upcoming Live Events!!
September 16, 2014, Santa Clara, CA
September 16, 2014, Santa Clara, CA
October 29, 2014, New York City
November 11, 2014, Atlanta, GA
December 9-10, 2014, Reykjavik, Iceland
Infographics
Allot's latest MobileTrends Charging Report shows that value-based pricing plans are up from 35% in 2011 to 85% in 2014.
Hot Topics
Microsoft to Axe 12,500 Ex-Nokia Employees
Sarah Reedy, Senior Editor, 7/17/2014
GM: 10 Car Models on Road With AT&T's LTE
Dan Jones, Mobile Editor, 7/18/2014
Have IBM & Apple Partnered Their Way to Cloud Leadership?
Mitch Wagner, West Coast Bureau Chief, Light Reading, 7/18/2014
Analytics, Security Key to Apple, IBM Tie-Up
Ray Le Maistre, Editor-in-chief, 7/16/2014
Will Santa Fe Strategy Be a Message to Munis?
Jason Meyers, Senior Editor, Utility Communications/IoT, 7/18/2014
Like Us on Facebook
Twitter Feed