Vodafone and AT&T are not normally direct competitors. Each has their own footprint (AT&T in the US, Vodafone primarily in the EU). Yet when it comes to connected cars, the two telecom giants are going head to head on key business opportunities.
According to research by SBD, both companies are starting to dominate in their respective markets, winning large contracts that have yet to be officially announced. Vodafone is offering competitive roaming solutions for the European market and AT&T is offering a promising LTE network in the USA.
Two main factors have helped create a landscape where two of the world’s largest telecom operators are competing for the same business:
The rise of global SIMs
Vehicle manufacturers are sourcing a single Global SIM, rather than a series of local SIMs from multiple telecom operators. This simplifies sourcing for manufacturers, as well as helping them improve security by limiting the number of connections to their Telematics Service Provider (TSP). This will force many operators to become roaming partners to whichever telecom operator (or consortium) owns the relationship with vehicle manufacturers.
The changing role of telecoms operators
Vodafone and AT&T are aiming to become more of a Telematics Service Provider (TSP) in an effort to expand their role (and revenue) beyond connectivity. Vodafone is already scooping up some TSP business with vehicle manufacturers following their recent acquisition of Cobra. AT&T's Drive platform has also generated significant interest from the automotive industry.
What does this mean for their competitors?
In the short term, there are still opportunities to support vehicle manufacturers that have not yet transitioned to a global strategy. In the longer-term, to avoid becoming reliant on consortiums, other operators will need to find more creative ways of differentiating themselves from AT&T and Vodafone. Orange and Telenor are prime examples, having made significant headway in promoting themselves as the partner of choice for manufacturers looking to protect connected vehicles from cyber-attacks.
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