Verizon, AT&T have a new battleground: In-Car Connectivity

Connected cars are reckoned to be big business. Auto manufacturers are keen to get cars connected because it's an additional source of revenue for them and may tie the driver with the manufacturer. Connected cars can perform software updates over the air as well as use the same connection for the driver or passengers. This ranges from remote control of car systems to providing an in-car WiFi hotspot. And the market for car-based technology is only just getting started: it produced revenue of $8 billion in 2013 and this is forecast to grow to $20 billion by 2018, according to Juniper Research. However, these headline figures disguise what's happening under the surface. Of the two big carriers, AT&T and Verizon Wireless, AT&T have signed up eight auto manufacturers and Verizon have only signed up four. Sprint and T-Mobile USA trail the others with three between them. But even this may be investigated in detail, because carrier deals with auto manufacturers typically only cover certain ranges of vehicles. AT&T's deal with Audi only covers the A3 and Q3 machines; other Audi models are still available. There's another difference with how Verizon organise their in-vehicle wireless technologies, because they cover the whole process from integration in the vehicle, through to activating the connection to billing issues. AT&T use third parties for some of these processes: this gives Verizon greater control. Verizon's Telematics president said, "Our strategy is to do the entire ecosystem ourselves. It allows us to participate up and down the value chain."

Nevertheless, Verizon's legacy network is not a global standard but instead it's regional. AT&T uses the GSM standard, which means it requires less work to get the technology integrated into vehicles all over the world (Verizon must tailor the hardware for every particular market). Verizon's network doesn't allow a combination of voice and data, which the GSM 3G standard that AT&T uses allows. This means that in an emergency situation, Verizon's connected cars cannot send diagnostic data through whilst the operator is engaged in a conversation with the car occupants. The network standards reason is why General Motors signed a deal with AT&T eighteen months ago and why Audi signed up earlier this month. However, LTE and in particular VoLTE (voice carried over the LTE data network) will negate AT&T's advantage. The question remains as to how quickly this can happen: industry analysts have claimed that auto manufacturers may have to wait another six years before the technology may be reliably used. This may be too little, too late for Verizon but AT&T cannot afford to become lazy and complacent.

Much will depend on how effectively the Internet of Things (IoT) may be integrated into carrier systems as well as how quickly LTE networks are rolled out across the world. VoLTE technology is already a hot topic and all carriers across the world need to get onboard with making this technology operational across their own network before we can realistically consider cross-network VoLTE calls. It's encouraging to see that AT&T are already highlighting how they are working towards an IoT world; let's just hope that our connected cars won't come with network value added services!

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About the Author

David Steele

Senior Staff Writer
I grew up with 8-bit computers and moved into PDAs in my professional life, using a number of devices from early Windows CE clamshells and later. Today, my main devices are a Nexus 5X, a Sony Xperia Z Tablet and a coffee cup.