General Motors will replace Verizon Wireless' (NYSE:VZ) service with AT&T Mobility's (NYSE:T) service in its OnStar offering beginning in 2014. The news represents a blow to Verizon, which has powered OnStar's service since it launched in the 1990s.
"Introducing 4G LTE into GM vehicles is a game-changing opportunity, and we couldn't be better positioned to help drive this movement," said Ralph de la Vega, president and CEO of AT&T Mobility. "We're working closely with GM to grow the connected car base, and provide unique and relevant services that will improve the connected experience inside automobiles for both drivers and passengers."
Terms of the deal were not disclosed. OnStar counts more than 6 million customers in the United States, Canada and China, and its service starts at $18.95 per month.
AT&T will provide service to GM's OnStar in Chevrolet, Buick, GMC and Cadillac vehicles. The companies said AT&T will power OnStar's existing calling and monitoring services, and will support "a new suite of infotainment services like streaming audio, web access, applications, and even video for backseat passengers." AT&T will also power GM's in-vehicle Wi-Fi hotspots and voice calling services.
AT&T has worked to expand its machine-to-machine communications business, which falls under the carrier's "emerging devices" unit headed by Glenn Lurie. The unit added 246,000 connected devices during AT&T's fourth quarter.
That the new GM-AT&T deal includes mention of LTE is notable in light of AT&T's efforts to expand the network. AT&T currently covers 174 million POPs with LTE, and plans to hit at least 250 million POPs by the end of 2013 and 300 million POPs by the end of 2014. In contrast, Verizon now covers 273.5 million POPs with LTE, or roughly 89 percent of the U.S. population. Verizon expects to finish its initial LTE deployment by mid-year.
"OnStar remains a valued customer, and we look forward to providing the outstanding service that millions of customers will continue to enjoy on the reliable Verizon Wireless network," said Verizon spokeswoman Debi Lewis in response to questions from FierceWireless.
Verizon Communications acquired Hughes Telematics last year for $612 million, a deal that could have soured the relationship between GM and Verizon.
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