Chetan Sharma: IoT net adds exceed phone and tablets combined in Q2, with AT&T, Verizon leading

Wireless industry analyst Chetan Sharma reported that, for the first time ever, wireless carrier net customer additions stemming from IoT services like connected cars exceeded the number of net additions they received from both smartphones and tablets – combined.

“AT&T is dominating the IoT revenues and with Verizon, the duo is pretty much cleaning up the IoT revenue stream in the operator segment,” Sharma wrote in an analysis of the wireless industry in the second quarter.

In his analysis, Sharma also pointed out that, industrywide, there were more connected car net additions than there were phone net additions. And this isn’t a new trend: “For the 7th straight quarter, AT&T added more cars than phones and tablets combined,” he wrote.

Indeed, AT&T continues to show major gains in the IoT space, particularly with connected cars: “AT&T’s connected car onboarding pace is 2x that of its connected tablets pace,” Sharma wrote. “Operator is expected to reach 10M connected car subscriptions very soon in roughly 12 quarters compared to 25 quarters it took for the tablets.”

In the second quarter, AT&T reported the addition of 1.2 million “connected devices” in the second quarter, the carrier’s term for automobiles and other IoT-style devices that are not phones or tablets.

And AT&T continues to work to break open the connected car opportunity: During the second quarter the carrier announced customers who drive one of its connected cars can add that car to their unlimited data plan for $40 per month.

Verizon too is pushing to grow its revenues from the IoT. “We had another quarter of 25% growth in revenue from the Internet of Things, which amounted to approximately $205 million in the quarter and about $400 million year to date in 2016,” Verizon CEO Lowell McAdam said during the operator’s second quarter earnings conference call with investors, according to a Seeking Alpha transcript of the event. “We've also seen strong demand for our telematics products, including our direct-to-consumer product, hum, and see many opportunities to expand in the market.”

Indeed, Verizon said it added 173,000 prepaid devices during the period, “with Verizon Wireless retail hum devices being the primary driver,” the company said.

And Verizon continues to invest in the space. In just the past few weeks Verizon said it acquired Telogis in the telematics space in order to offer Software-as-a-Service (SaaS) technology and services in the connected vehicle and mobile enterprise management sectors. Terms of that deal were not disclosed.

Earlier this month Verizon said it would spend $2.4 billion to acquire Ireland's Fleetmatics. Fleetmatics offers a software platform providing GPS vehicle management and other services to companies with mobile workforces. The company serves more than 37,000 customers and raised $93 million in funding before going public in 2012.

For more:
- see this Sharma report

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