5G connected cars: Can telcos take the driver’s seat?
Global automotive manufacturers are busy striking new partnerships with the telecoms industry, both to connect cars to 5G and to give consumers a choice of mobile operator when connecting their vehicles. The variety of business models, however, points to a market in flux in which telcos’ roles are still being defined.
02 Sep 2021
5G connected cars: Can telcos take the driver’s seat?
Global automotive manufacturers are busy striking new partnerships with the telecoms industry, both to connect cars to 5G and to give consumers a choice of communication service providers (CSPs) when connecting their vehicles. The variety of business models, however, points to a market in flux in which CSPs’ roles are still being defined.
BMW recently announced it is partnering with Deutsche Telekom to bring 5G connectivity to the BMW iX. As part of the deal, drivers will have a mobile phone contract for a Personal eSIM and the vehicle will have a 5G WLAN hotspot that can connect to 10 devices at once, with the eSIM linked directly to the customer’s BMW ID.
“Telekom customers can extend their existing mobile phone contract to their car for the first time,” according to BMW, which says the move “makes the vehicle another interconnected device for customers, like a smartwatch.”
It follows a recent agreement between AT&T and General Motors, which aims to “bring 5G cellular connectivity to millions of GM vehicles coming off the assembly line over the next decade,” with the first 5G-enabled cars due to be available in 2024.
“By connecting millions of GM vehicles to our nationwide 5G network, we will improve the customer experience for existing services while laying the groundwork for the next wave of innovation including autonomous driving,” said Gregory Wieboldt, Senior Vice President, Global Business, Industry Solutions, AT&T, in a GM release.
In China, meanwhile, Audi is adding 5G to vehicles in production for the very first time. Like GM, Audi also has an eye on autonomous driving, but it is not announcing any CSP partnerships. Instead, it will equip vehicles with a wireless module that supports both 5G and C-V2X. Audi said in late August it will soon begin shipping its A7 L and A6 L cars in China, and expects to make available 5G and C-V2X-equipped cars in other markets in 2023.
It’s doubtful 5G that will be very useful to drivers immediately. Deutsche Telekom’s 5G network covers 80% of the population, with the aim of reaching 90% by the end of 2021, but this does not equate to geographical coverage. Yet 5G promises to play an important role in supporting greater levels of autonomous driving. Currently EU countries, for example, are cooperating to develop transnational “5G corridors” to test at scale connected and automated driving on European motorways.
“We’re coming to a really interesting point in the evolution of connected cars, where 5G can genuinely contribute new capabilities to the market and differentiate its characteristics over 4G,” says TM Forum’s Principle Analyst, Dean Ramsay. “We can also see self-driving vehicles on the horizon, so in 2021 lots of the connectivity technology work that is going into connected cars is laying the path to autonomous vehicles.”
In the US, Volkswagen has announced a new service that does not involve 5G, but which does make it easier for drivers to choose their wireless carrier. As of late September, Volkswagen’s US Carrier of Choice will offer customers “the flexibility to choose from multiple wireless providers to enable Car-Net’s in-vehicle Wi-Fi hotspot through embedded technology,” starting with Verizon and T-Mobile.
In Germany, however, “Deutsche Telekom is influencing BMW’s thinking with the continued use of eSIM and steering away from the highly disruptive iSIM model where end users can easily switch connectivity service provider, increasing IoT churn and putting pressure on connectivity prices,” says Ramsay.
Uncertainty about how 5G will shape urban living, means much is still to play for.
“Depending on the appetite for smart cities, the connectivity requirements for connected cars could change radically and we may even see the use of network slicing for connected vehicles,” says Ramsay. “But we’re not seeing much demand in the market yet.”
BMW recently announced it is partnering with Deutsche Telekom to bring 5G connectivity to the BMW iX. As part of the deal, drivers will have a mobile phone contract for a Personal eSIM and the vehicle will have a 5G WLAN hotspot that can connect to 10 devices at once, with the eSIM linked directly to the customer’s BMW ID.
“Telekom customers can extend their existing mobile phone contract to their car for the first time,” according to BMW, which says the move “makes the vehicle another interconnected device for customers, like a smartwatch.”
It follows a recent agreement between AT&T and General Motors, which aims to “bring 5G cellular connectivity to millions of GM vehicles coming off the assembly line over the next decade,” with the first 5G-enabled cars due to be available in 2024.
“By connecting millions of GM vehicles to our nationwide 5G network, we will improve the customer experience for existing services while laying the groundwork for the next wave of innovation including autonomous driving,” said Gregory Wieboldt, Senior Vice President, Global Business, Industry Solutions, AT&T, in a GM release.
Going it alone
In China, meanwhile, Audi is adding 5G to vehicles in production for the very first time. Like GM, Audi also has an eye on autonomous driving, but it is not announcing any CSP partnerships. Instead, it will equip vehicles with a wireless module that supports both 5G and C-V2X. Audi said in late August it will soon begin shipping its A7 L and A6 L cars in China, and expects to make available 5G and C-V2X-equipped cars in other markets in 2023.
It’s doubtful 5G that will be very useful to drivers immediately. Deutsche Telekom’s 5G network covers 80% of the population, with the aim of reaching 90% by the end of 2021, but this does not equate to geographical coverage. Yet 5G promises to play an important role in supporting greater levels of autonomous driving. Currently EU countries, for example, are cooperating to develop transnational “5G corridors” to test at scale connected and automated driving on European motorways.
“We’re coming to a really interesting point in the evolution of connected cars, where 5G can genuinely contribute new capabilities to the market and differentiate its characteristics over 4G,” says TM Forum’s Principle Analyst, Dean Ramsay. “We can also see self-driving vehicles on the horizon, so in 2021 lots of the connectivity technology work that is going into connected cars is laying the path to autonomous vehicles.”
The question CSPs face, therefore, as they make agreements with car manufacturers is: What position will they take in the service value chain as 5G coverage grows and a more autonomous form of driving develops?
In the US, Volkswagen has announced a new service that does not involve 5G, but which does make it easier for drivers to choose their wireless carrier. As of late September, Volkswagen’s US Carrier of Choice will offer customers “the flexibility to choose from multiple wireless providers to enable Car-Net’s in-vehicle Wi-Fi hotspot through embedded technology,” starting with Verizon and T-Mobile.
In Germany, however, “Deutsche Telekom is influencing BMW’s thinking with the continued use of eSIM and steering away from the highly disruptive iSIM model where end users can easily switch connectivity service provider, increasing IoT churn and putting pressure on connectivity prices,” says Ramsay.
“Operators worldwide find IoT quite challenging to monetize, so these relationships add some certainly to their return-on-investment models for the automotive vertical,” he explains.
Uncertainty about how 5G will shape urban living, means much is still to play for.
“Depending on the appetite for smart cities, the connectivity requirements for connected cars could change radically and we may even see the use of network slicing for connected vehicles,” says Ramsay. “But we’re not seeing much demand in the market yet.”
