As auto manufacturers gear up for the connected car, rural wireless carriers will want to keep tabs on new developments in this area as there may be some opportunities for them. People who live outside of a rural carrier’s serving area increasingly could be using the rural carrier’s network as they drive through the area. But there are a lot more issues that will have to be resolved before the picture becomes clear, as a webinar sponsored by the Competitive Carriers Association and business mapping company Mosaik Solutions on August 7 made clear.
There are three types of connectivity for connected cars, according to Chip Strange, vice president of products and technology for Mosaik Solutions. The most familiar of these may be embedded technology built into the car, such as General Motors’ Onstar system. But other options include tethered and integrated connectivity.
As Strange explained in an email to Telecompetitor, “Integrated means that the user’s smartphone is integrated with the vehicle’s smart system. It’s like Bluetooth now with cars. When you get in and start the car, the car recognizes your phone and enables you to make calls through the audio system and stream music from your phone to the car as well. This is practically the same for integrated connectivity. The car will load the apps from the phone, so the user does not have to go back and forth from device to car. . . The user can control it using the car.”
Tethering is more like tethering your phone to your laptop, said Strange. Unlike with the other two options, he said “It’s not seamless because you have to perform a few manual steps to connect the two devices together.”
The integrated and tethered options use the end user’s existing wireless carrier for connectivity, while the embedded approach – at least for now – requires the end user to use the service chosen by the car maker.
Car makers are in the process of determining which approach to the connected car they plan to use – and considering the long development cycles experienced in that industry, they have a lot at risk. Within a few years, Mosaik sees integrated systems being the most common form of connectivity for the connected car while tethered systems plateau and later drop down in popularity, but the company believes all three options will be around for at least a few years.
Connected Cars and Rural Carriers
As Strange noted, auto makers such as Audi and Tesla have been making agreements with major wireless carriers to support embedded connected car offerings. But consumers may not be aware of the underlying carrier, instead viewing their relationship being with the car maker – and may attribute any service problems to the car maker.
Because of this, Mosaik believes car makers will want to implement tools to manage the underlying connection. Noting, for example, that service may degrade in rural areas – particularly in the nation’s numerous census blocks with a population of zero – Mosaik believes service providers will want to manage customer expectations and provide data or graphic depictions of network coverage and the like.
The webinar didn’t touch on issues such as roaming that could have a big impact on connected car performance in rural areas. But to the extent that small rural carriers may offer better coverage than the large national carriers in some areas, one would expect the car maker to want to move traffic to the small carriers where doing so would enhance performance.
Of course this would require the wireless technology used for the car to be compatible with what the rural carrier uses. And nowadays that often is not the case. But that situation should begin to change as technology becomes available to support a wider range of frequency bands and as carriers begin to standardize on LTE. While some machine-to-machine applications are expected to continue to rely on 2G and 3G until at least 2018, connected cars are more likely to rely largely on 4G LTE as they may need to support relatively high-bandwidth applications such as streaming video.
Which Carrier to Use?
Another unknown is to what extent drivers and passengers will want to rely on car maker-provided connectivity rather than continuing to use the carriers underlying their smartphones, tablets and other devices. At least one car maker – Tesla – already has come up with an embedded solution that uses an impressive in-car display that should certainly enhance the appeal of the embedded solution. And some embedded solutions are expected to act as Wi-Fi hotspots, potentially enabling passengers to use Wi-Fi rather than their own wireless carrier for connectivity – an option that could be particularly appealing if the car provides better connectivity in rural areas than the passenger’s usual carrier offers.
And it may not be just the carriers underlying embedded car connectivity who look to optimize performance in rural areas. As customers look to use their smartphones and tablets to support the same options in the car that they do the rest of the time, it would behoove all carriers to look at optimizing rural performance – including relying on the best roaming partners where appropriate.
3 thoughts on “Connected Cars and Rural Carriers: What is the Opportunity?”
With AT&T taking over the operation of the OnStar system in a couple months, and all the new streaming, downloading, application, etc services requiring the presence of LTE to be effective and a suitable customer experience, the fact that AT&T's LTE coverage is not available in over half the land area of the US is going to cause great customer dis-satisfaction when they get outside a major metropolitan area on that cross-country road trip with the family and find there is no LTE service available to use. Earlier this year, AT&T had put out a map claiming that their entire native service area would have LTE coverage by the end of 2014. Since then, they haven't said a word and most of their contractors have been told to stop work and those contractors have laid off employees. Not a good sign for a workable OnStar experience coming up. Put this together with the fact that there really aren't any LTE roaming agreements between any of the major carriers and regional/local carriers in operation at the present time other than Verizon's LTE in Rural America program, the future doesn't look so bright. Nearly all populated areas of the country are covered in LTE by some carrier or another. The time is now for them to get together on roaming agreements or get the FCC involved. I'm not fond of the latter option.
Silos are even worse in rural markets.