<< Home

Mobile Network Operators’ Opportunity in Telematics

The Carrier Opportunity in TelematicsAs the race for subscribers is slowing down and the market for traditional voice/data becomes saturated, another race is emerging for connected devices as the next growth opportunity. There is big opportunity for mobile network operators in telematics. The mobile machine-to-machine (M2M) market is expected to grow rapidly, by approximately 317% connections from 2009 to 2014 (ABI Research).

Vehicle telematics is one of the primary application areas for wireless M2M technology. The opportunity for a mobile network operator within the telematics space is driven by the following factors:

  • The telematics sector is viewed as a source of greater operational efficiency and revenue
  • Worldwide mobile network coverage expansion
  • Updated air interface standards are providing opportunities for 3G M2M markets
  • Greater data service offerings, provided by mobile network operators (MNOs)
  • Some government compliance mandates require telematics integration

Suggested Reading: Telematics Growth: The Golden Age

Berg Insight reports that “the installed base of fleet management systems will reach 8.7 million units in the Americas by 2016.”

The research firm also confirms that the number of fleet management systems deployed in commercial vehicle fleets in North America was 2.8 million in Q4-2011. Growing at a compound annual growth rate (CAGR) of 15.9 percent, this number is expected to reach 5.9 million by 2016. The fleet management segment is very important for telecom vendors active in the M2M space with the following benefits:

  • Low churn
  • Low Average Revenue Per User (ARPU) – there are a few MBs per month
  • Low bandwidth needs (in contrast with smartphone users whose increasing data consumption is growing at a faster rate than that of data revenue)

Two major announcements highlight the growing role that telecommunications companies will continue to grow over the coming years:

  • In June, Verizon announced that it was acquiring Hughes Telematics (HTI) for $612 million, an established Telematics player. “We expect M2M and telematics to drive significant growth for Verizon and we’re taking an important step forward to accelerate solutions that will unlock more opportunities for existing and new HTI and Verizon customers,” said John Stratton, president of Verizon Enterprise Solutions, in a company statement.
  • Spain’s Telefónica, last September, partnered with Masternaut, one of Europe’s largest providers of fleet and resource management solutions, to jointly market fleet management services. “With this agreement, Telefónica demonstrates the capacity for responding to customer’s needs in the growing M2M market,” said Carlos Morales, Telefónica’s global M2M director, “We are convinced that Masternaut’s leading products will enable us to offer top quality and comprehensive solutions covering all elements of the value-chain.”

Related Post:
The Future of Telematics

Leave a Reply

Your email is never published nor shared. Required fields are marked *

Time limit is exhausted. Please reload CAPTCHA.

Subscribe Now
Get more Geotab news. You can unsubscribe at any time.