Vodacom, MTN wants to turn your car into a ‘smartphone on wheels’

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Vodacom, South Africa’s biggest mobile phone operator, and its main rival MTN are increasing their participation in the Internet of Things (IoT) space with a growing interest in the connected vehicle industry that is integrating with the smartphone. By Gugu Lourie

The connected car space is very lucrative.

Ralph de la Vega, AT&T Mobility’s president, once described the changes brought by the smartphone onto the car industry, succinctly saying: “The car is becoming a smartphone on wheels”.

By 2020, independent research firm SNS estimates that connected car services will account for nearly $40 billion (R556 billion) in annual revenue.

It will be driven by a host of applications, including but not limited to infotainment, navigation, fleet management, remote diagnostics, automatic crash notification, enhanced safety, UBI (Usage Based Insurance), traffic management and even autonomous driving.

Mobile phone operators are anticipating a surge in demand for their services in this connected car industry.

Vodacom and MTN are targeting growth in the connected car industry and have already made inroads and looking for new opportunities.

They are keen to leverage the smartphone innate connectivity when used in the car environment.

The parent company of Vodacom, British mobile phone giant Vodafone is already playing a vital role in the connected car environment.

Vodafone IoT has managed to secure significant IoT managed connectivity contracts with several global original equipment manufacturer (OEMs) where the Vodafone global data service platform service offering has been a differentiator for Vodafone against other mobile network operators.

In June 2014, Vodacom and BMW SA signed a partnership for ConnectedDrive services and SIM connectivity as a standard on vehicles produced from July 2014 onwards.

Tony Smallwood works with smartphones
Tony Smallwood, executive head at Vodacom for business development in Machine-to-Machine (M2M) and Vertical Industries (Photo Credit: Vodacom)

Using a Vodacom SIM card embedded in the BMW car, ConnectedDrive provides a wide range of intelligent services and apps.

BMW drivers can also book other optional services and apps from BMW ConnectedDrive such as concierge services, internet or real-time traffic information, while remote services lets you control your car through your smartphone.

As stiff competition and regulation slow growth in their core markets, we asked Vodacom if it’s planning to provide a full-service of in-vehicle Internet bundles to BMW car owners in the future.

“Internet-in-the-Car has recently been launched in several Vodafone operating companies in Europe. Vodacom is considering a similar service offering,” Tony Smallwood, executive head at Vodacom for business development in Machine-to-Machine (M2M) and Vertical Industries, told Techfinancials.co.za in an email response.

He wouldn’t elaborate on Vodacom’s plans.

Asked whether Vodacom regards connected car industry as part of its diversification strategy for revenues, he said: “Yes, IoT is regarded as one of Vodacom’s strategic growth engines.”

Smallwood added that Vodafone and Vodacom provide similar IoT services to a number of existing OEM’s and have tight partnerships with OEM’s in their connected vehicle strategies.

“Vodafone Automotive supplies more connected car services for more models, from more manufacturers, in more countries than any other supplier.”

Vodacom’s rival MTN also wants to stake a big claim in the IoT space.

“MTN sees the provision of SIM cards and modems in the automotive industry as core of any telecom’s business,” Alpheus Mangale: Chief Enterprise Business Officer, MTN SA, told Techfinancials.co.za.

“MTN regards the automative sector as a market that was previously not addressed, and to that end, MTN is working with car manufacturers to assist them to differentiate themselves in the market through the value they create to their end customer.”

MTN has already came up with various innovations to entice South African companies to embrace IoT.

The telco is developing an African IoT ecosystem. In 2015, MTN Business launched the first truly Pan African IoT platform, offering African enterprises with greater control and advanced management features for their connected devices and SIM cards.

It also offer customers Mind2Challenge that provides developers, including students, graduates and small enterprises, with a unique opportunity to participate in MTN’s Pan

Alpheus-Mangale works with smartphones
Alpheus Mangale, MTN Business SA Chief Enterprise Business Officer (Photo Credit: MTN Business)

African IoT ecosystem and community.

“MTN is working on connected fleet (rental car, public transport, and logistics verticals) to not only create innovation for the sake of it, but to deliver solutions that will bring greater business innovation, public safety, interaction and real-time operational visibility of high value assets in transit,” said Mangale, adding that the core of this business is based on services that MTN Business has been providing since inception.

MTN Business seeks to comprehensively address this market with bespoke services tailored for both the automaker and the end user of the vehicle.

“The connectivity that MTN Business will provide will be primarily for telemetry services that include, among others, diagnostics, tracking and communication that are required by the car. This includes any value added services such as concierge services, data bundles, content services, traffic and data feeds that is available in the car.

The customer, who is the end user, will benefit from usage of the connected services.  Furthermore, MTN is partnering with the tracking companies to build joint value propositions to the connected automotive,” he said.

Additionally, both MTN and Vodacom are competing to provide innovative telemetry services using their SIM cards.

According to Frost & Sullivan, South Africa’s vehicle telematics will grow at a yearly rate of 12.5% from 2014 to 2021, with the telematics market penetration projected to reach 17% by 2018.

Mangale said: “MTN is working on connected fleet (rental car, public transport, and logistics verticals) to not only create innovation for the sake of it, but to deliver solutions that will bring greater business innovation, public safety, interaction and real-time operational visibility of high value assets in transit.”

But which of the local telcos is best positioned in the space for connected cars?

Is it Vodacom with the backing of Vodafone through its IoT operating division or is it MTN through its local innovation and its extensive footprint across Africa.

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