Mobile Operators Go after the Connected Car Opportunity Cellular Telematics Value Chain, Business Models and Market Forecast

Telematics is one of the most dynamic and fastest growing segments of the cellular machine-to-machine market, which itself will take a growing portion of all cellular subscriptions, increasing from 2.3% in 2012 to 6.8% in 2018. Regulations are a key market driver, but competition and innovation in the insurance and OEM segments are also important.

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Despite differences between the telematics service markets of OEMs, insurance companies and aftermarket providers, we expect to see increased partnerships and collaboration between these segments as the car’s network connection is used for a range of different services. Operators must also adapt their models to local market dynamics, especially given the variety of factors affecting telematics demand, ranging from income levels, rates of car theft rates and drivers’ expectations to the availability of smartphone apps.

Pyramid Research has identified four key approaches operators can take to expand their presence in the telematics value chain and thus their share of it:

1. They can become telematics service providers, as Verizon has done through its acquisition of Hughes Telematics.

2. Operators can offer flexible billing, so that telematics access and services can be charged to a phone bill.

3. To be able to plan and deploy services better, operators can develop or partner for systems integration capabilities.

4. Operators can leverage their brands and channels to sell telematics services directly to end users.

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In Mobile Operators Go after the Connected Car Opportunity, Cellular Telematics Value Chain, Business Models and Market Forecast,’ Pyramid Research examines the cellular telematics value chain, analyzes the different business models and provides market forecast for the telematics industry globally. The report looks at the various market drivers and how they differ between regions and especially between emerging and developed markets; it also examines the main types of telematics applications, such as navigation, emergency services, diagnostics PAYD and PHY insurance, and stolen vehicle recovery. focusing on the opportunities for MNOs to expand their role. Examples from around the globe are provided throughout, including of AT&T (in the US), Vodacom (South Africa), GM OnStar (US), ERA GLONASS (Russia), eCall (Europe), Volvo, Insurethebox (the UK), Generali and Telefónica (Spain), and the CONTRAN regulations (Brazil).

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