Light Reading
Transportation and telecommunications are growing closer together.

Finding the Value in Transportation Telematics

Danny Dicks | Analyst
Heavy Lifting Analyst Notes
Danny Dicks | Analyst
2/28/2014
50%
50%

Wireless network operators are keen to build their machine-to-machine (M2M) businesses, and they see opportunities within transportation to develop services that could take off as cars become connected and public transportation systems use technology to improve services as costs reduce.

Some telematics services, such as fleet management and logistics, are long established, and a competitive service market has developed with many small and medium-sized players serving specific niches, often on a country-by-country basis. While there is scope for consolidation in this market, the thin margins mean wireless operators are likely to look for a larger prize.

Their eyes are on the nascent markets for private car telematics services. But this market also has issues that must be understood. Telematics platforms in private cars can indeed deliver multiple services: road safety, vehicle/road taxation, insurance services, vehicle diagnostics and remote system upgrade, stolen vehicle tracking and traffic monitoring and data gathering are just some of the applications. But it is not easy to see which services will generate significant revenue, and for whom. There will be consumer reluctance to paying for many of these services, or even aversion to allowing some of them, for personal privacy reasons. It will be instructive to observe how these location-tracking issues play out in the wider world of smartphone applications.

But in some markets -- notably in Italy, the UK and US -- usage-based insurance is starting to gain some traction, after a slow start, and wireless operators are developing services to support this industry (based on their M2M platforms and in conjunction with specialists). Further, telematics platforms, once in place, can also deliver infotainment -- and that's looking like one of the major opportunities for connected car proponents. Traffic information, other location-based information, navigation and access to entertainment via an in-car device rather that a mobile phone are all possible revenue-generating services.

Wireless operators are looking into these options -- some are building their expertise internally, often with the help of specialists (Vodafone, for instance, has a usage-based insurance solution based on its M2M platform and built with US risk consultancy Towers Watson); others are buying it (Verizon bought Hughes Telematics in 2012). They all know there's something to gain -- but they are far from the only companies with the capability to deliver telematics platforms.

It's not at all certain who will emerge as the dominant players in private car telematics, but wireless operators do have a reasonable chance to emerge as service providers if they put in the effort to think carefully about where the revenue will come from, and work with partners to build superior platforms.

The Heavy Reading Mobile Networks Insider report, "Telecom Opportunities in Transportation Telematics & ITS," examines the physical and commercial relationships between different aspects of connected transportation, including vehicle telematics and broader ITS. It looks at the different communications technologies that can be used for different applications, with a special focus on the connected car. It examines ways that value can be added in telematics and ITS through solutions, platforms and services, and the companies that are delivering that value. Finally it profiles 12 leading companies in different positions in the market, describing their product and service offerings.

— Danny Dicks, Analyst, Heavy Reading Mobile Networks Insider


The report, Telecom Opportunities in Transportation Telematics & ITS, is available as part of an annual single-user subscription (six issues) to Mobile Networks Insider, priced at $1,595. Individual reports are available for $900. To subscribe, please visit: www.heavyreading.com/mobile-networks.

(6)  | 
Comment  | 
Print  | 
Newest First  |  Oldest First  |  Threaded View
Joe Stanganelli
50%
50%
Joe Stanganelli,
User Rank: Light Sabre
3/3/2014 | 4:32:19 AM
Re: A lot going on here
One of the benefits of Toyota's "Friend" system is that it notifies drivers if there has been a recall, or even if there is another issue with the particular car detected.  It will the driver when a visit to the dealership is necessary.  Pretty neat stuff.
mendyk
50%
50%
mendyk,
User Rank: Light Sabre
3/1/2014 | 8:22:30 AM
Re: A lot going on here
Yes, and maybe Toyota can also work on a connected application that cuts down on the number of serious vehicle recalls it has to issue. But old stereotypes die hard.
Joe Stanganelli
50%
50%
Joe Stanganelli,
User Rank: Light Sabre
2/28/2014 | 11:30:10 PM
Re: A lot going on here
This has become more a concern in the US given that, in the wake of NSA revelations, our privacy hackles are up.

But we still continue to give up privacy and freedom in exchange for security theater (for instance, this year, the Boston Marathon will not allow US veterans to run with their packs in tribute of their fallen comrades, because terrorists), so I'm sure the trend will continue.
Joe Stanganelli
50%
50%
Joe Stanganelli,
User Rank: Light Sabre
2/28/2014 | 11:27:32 PM
Re: A lot going on here
Japan seems to be more ahead on this than the US automakers are (surprise, surprise).

Toyota, for instance, has been working on social media where you and your car can "friend" each other and chat with each other.
mendyk
50%
50%
mendyk,
User Rank: Light Sabre
2/28/2014 | 12:55:29 PM
Re: A lot going on here
Ford and GM both had connected cars on display at MWC, though Ford's demo didn't seem to be working. Weird to have two automakers at the show while Apple and Microsoft choose not to participate.
Carol Wilson
50%
50%
Carol Wilson,
User Rank: Blogger
2/28/2014 | 10:41:39 AM
A lot going on here
AT&T and Sprint have also made big investments is telematics for the automobile industry, and along with VErizon, they are looking well beyond usage-based insurance. There are advantages to auto dealers - tracking car info to alert drivers to needed maintenance and using GPS to track missing vehicles -- and even parents who want to geo-fence their teen drivers. 

Interesting space to watch, to be sure. 
More Blogs from Heavy Lifting Analyst Notes
Enterprises increasingly realize that in order to run their businesses economically they need to fundamentally change ways in which they operate their businesses in the connected IP world.
There's plenty of activity in the emerging G.fast broadband technology sector, but will it come to anything?
Here are some steps that service providers could take to boost the reach, awareness and success of their multiscreen video ventures.
Telecom operators are deploying new technologies in their data center environments to reduce costs and increase revenues.
The cloud debate has moved on to the network capabilities needed to meet customers' demands, with SDN and NFV at the heart of discussions.
Flash Poll
From The Founder
It's clear to me that the communications industry is divided into two types of people, and only one is living in the real world.
LRTV Documentaries
Broadband Battles

10|31|14   |   01:39   |   (0) comments


This year's Broadband World Forum featured a number of show floor battles focused on access gear, components and coffee.
Jonestown
Mobile Backhaul: Going to the Dark Side?

10|30|14   |   2:26   |   (1) comment


Heavy Reading's Patrick Donegan shares his view on a dark trend that bubbled up at Light Reading's annual backhaul conference in NYC.
LRTV Huawei Video Resource Center
2014 Huawei Electric Power Industry Summit: Interview With CEO of SwitchCom

10|30|14   |   4:13   |   (0) comments


SwitchCom, an IT company based in Angola, recommends a variety of Huawei solutions and hardware to their customers in the energy industry.
LRTV Huawei Video Resource Center
2014 Huawei Electric Power Industry Summit: Interview With Ethiopia's Ministry of Water Irrigation & Energy

10|30|14   |   4:08   |   (0) comments


Gosaye Mengistie of Ethiopia's Ministry of Water Irrigation & Energy discusses the collaboration with Huawei in that country.
LRTV Huawei Video Resource Center
2014 Huawei Electric Power Industry Summit: Interview with Dongfang Electronics Corporation

10|30|14   |   5:46   |   (0) comments


Dongfang Electronics Corporation, headquartered in Chengdu, China, is one of China's largest manufacturers of power generators and contractors of power station projects.
LRTV Huawei Video Resource Center
2014 Huawei Electric Power Industry Summit: Interview with Zimbabwe's Customers

10|30|14   |   3:31   |   (0) comments


Representatives of Zimbabwe's Ministry of Power and Development discuss the energy needs of their country as well as new areas of improvement due to enhanced ICT capabilities.
LRTV Huawei Video Resource Center
2014 Huawei Electric Power Industry Summit: Interview With Colbún Chile

10|30|14   |   4:29   |   (0) comments


In Chile, an aging energy infrastructure was in dire need of a modern update. Claudio Valenzuela of Colbún discusses how Huawei's ICT solutions continue to provide crucial information to improve the grid and how an in-country engineer is a cricial asset.
LRTV Huawei Video Resource Center
2014 Huawei Electric Power Industry Summit: Interview With YuLiao

10|30|14   |   6:27   |   (0) comments


Yu Liao, chairman of the Chinese Association for Renewable Energy in Germany, discusses the role that ICT solutions play in helping to grow renewable energy resources in Germany.
LRTV Huawei Video Resource Center
2014 Huawei Electric Power Industry Summit: Interview

10|30|14   |   2:54   |   (0) comments


Sifang has been working with Huawei on several projects. JingTao Wu, Assistant President of Beijing Sifang Automation Co. Ltd., believes that the cooperation with Huawei can facilitate Sifang's process of internationalization.
LRTV Huawei Video Resource Center
A Better Connected Smart Grid: Powering Laos

10|30|14   |   5:38   |   (0) comments


Representatives of Electricite Du Laos (EDL), a state-owned corporation, discuss the importance of ICT solutions in serving their country's energy needs.
LRTV Huawei Video Resource Center
2014 Huawei Electric Power Industry Summit: Interview With Junwei Lu

10|30|14   |   4:50   |   (0) comments


Professor Junwei Lu of Griffith University Australia describes his work with micro grid technology and the future of the power industry.
LRTV Documentaries
The Next-Gen Network Disconnect

10|29|14   |   01:23   |   (2) comments


There's a lot of talk about making networks more simple with SDN, NFV and next-gen broadband technology – but what about the complexity of introducing such capabilities?
Upcoming Live Events
November 6, 2014, Santa Clara
November 11, 2014, Atlanta, GA
December 2, 2014, New York City
December 3, 2014, New York City
December 9-10, 2014, Reykjavik, Iceland
February 10, 2015, Atlanta, GA
May 6, 2015, McCormick Convention Center, Chicago, IL
May 30, 2015, The Westin Peachtree, Atlanta, GA
June 9-10, 2015, Chicago, IL
Infographics
WhoIsHostingThis.com presents six of the world's most extreme WiFi hotspots, enabling the most epic selfies you can imagine.
Hot Topics
Microsoft's Skype Embraces WebRTC on IE
Sarah Reedy, Senior Editor, 10/27/2014
FTC Slaps AT&T With Throttling Lawsuit
Sarah Reedy, Senior Editor, 10/28/2014
Wheeler Gets Down With OTT
Mari Silbey, Independent Technology Editor, 10/29/2014
China's MVNOs Hit the Wall
Robert Clark, 10/27/2014
Let's Not Kill SDN & NFV With Silos
Francois Locoh-Donou, Senior VP, Global Products Group, Ciena, 10/28/2014
Like Us on Facebook
Twitter Feed