Verizon pushes back on notion that it's falling behind AT&T in connected car market

Verizon Communications (NYSE: VZ) argues that it's no slouch in the connected-car market even though rival AT&T (NYSE: T) has twice as many deals as it does with automakers. Verizon notes that it provides services beyond simple connectivity. Meanwhile, other carriers, including Sprint (NYSE: S), continue to plow ahead with their connected-car efforts.

AT&T has been the most visible U.S. carrier in the connected-car market, which, as Reuters notes, produced revenue of $8 billion in 2013 and is expected to grow to $20 billion annually by 2018, according to Juniper Research.

AT&T has racked up eight connected-car deals, with Nissan (for its Leaf electric car), BMW, Ford Motor Co., General Motors (for its OnStar service), Tesla, Audi (for its A3 and Q3 cars), Volvo and GM's operations in Europe. As Reuters notes, AT&T has also developed a global GSM-based SIM card for cars, tractors and shipments that can be programmed remotely to change for different networks around the globe.

AT&T's network reach was a key factor in the company's winning a deal with Audi to provide connectivity for its Q3 cars, a deal that was announced earlier this month. AT&T customers can add Audi connected cars to their Mobile Share Value shared data plans for an extra $10 a month. "We needed a foreign app that was acceptable in Europe and the U.S.," Brad Stertz, Audi's corporate communications manager, told Reuters. "That narrowed the choices for us at that point."

However, Verizon pushes back on the notion that it's being left behind. In addition to Mercedes and Volkswagen, which Verizon works with as a telematics-services provider, Verizon provides wireless connectivity for Toyota and Hyundai. Verizon completed its purchase of Hughes Telematics in July 2012, giving it a major leg up in the connected-car market.

Erik Goldman, president of Verizon Telematics, told Reuters that Verizon is focused on more than just connectivity. He noted that the company answers customer-help lines for support on vehicles, trains car dealers to activate connectivity and helps customers with billing issues--and does it all in-house. "Our strategy is to do the entire ecosystem ourselves," Goldman said. "It allows us to participate up and down the value chain."

Verizon spokeswoman Marie McGehee told FierceWireless that the carrier "has been a leader in the vision of the connected car since the late 1990s and today is the only one of the four major U.S. 'carriers' providing a comprehensive end-to-end telematics solution."

"Wireless transport serves as only one of many ingredients in that solution," she said. "Other carriers that are new to the space, and under pressure to establish a presence, have in many cases proposed overly aggressive offers on wireless transport."

McGehee noted that Verizon Telematics provides a premier suite of white-label telematics services for manufacturers in the industry, including Mercedes-Benz and Volkswagen. She also said the company's "In-Drive" after-market product offers safety and diagnostic telematics services for vehicles, including those enrolled in State Farm's Drive Safe and Save program. Additionally, Verizon's Networkfleet service enables government agencies, businesses and enterprise fleets to control fleet costs, boost productivity and operate their fleets more efficiently.

McGehee said Verizon provides telematics services in more than 30 countries, including China and much of Europe, and provides automotive partners with global connected services. "Our partners do not negotiate separate deals in separate markets," she said. "We offer our partners a global capability independent of market-by-market network technologies."

AT&T noted that earlier this year it launched AT&T Drive, a connected-car platform that enables automakers to pick and choose what services and capabilities are important to them. Additionally, the carrier opened the AT&T Drive Studio in Atlanta earlier this year to let automakers and developers build and test new services. AT&T spokeswoman Mari Melguizo noted that the carrier is also providing mobile connectivity to SiriusXM's in-vehicle telematics offerings for Nissan vehicles in North America, which will provide emergency support for accidents, stolen-vehicle tracking and roadside assistance. The carrier is also providing HSPA network connectivity to the Audiovox Car Connection, a plug-in On-Board Diagnostic device that enables consumers to monitor, manage and maintain drivers' habits as well as vehicle performance and maintenance.

Sprint launched its Velocity connected-car program in November 2012 and has won deals with Chrysler and Honda/Aeris. "The Sprint Velocity platform has received consideration from several OEMs as they look to roll out enhanced remote and in-vehicle connected service to their vehicles worldwide," Sprint spokeswoman Mary Kunkel told FierceWireless, adding that Sprint is talking to multiple car makers about potential deals.

"Today, Sprint Velocity is a comprehensive end-to-end platform designed for automakers offering innovative technology solutions around entertainment, location-based services, mobile commerce and connected cars," she added.

Audi had been working closely with T-Mobile US (NYSE:TMUS) to power Audi's Connect service for the past few years but switched to AT&T earlier this year as it added LTE connectivity to its newest models.

"T-Mobile helped pioneer the connected car space as the wireless provider for the 2011 launch of Audi Connect, which provides in vehicle Wi-Fi connectivity," the company said in a statement. "Audi cars used 262 terabytes of data in 2013 in the U.S., up significantly over previous years, indicating drivers are taking advantage of Audi connect features. In fact, as of January, Audi Connect was cited as the second-most important reason that customers cited for picking Audi.  T-Mobile continues to provide connectivity for all Audi models apart from the A3, S3 and Q3."

"This is clearly an industry with an exciting future," T-Mobile added. "While we can't discuss that future at the present, we can say that T-Mobile will approach connected cars the same way we approach everything, with the best interests of wireless users at the center of our strategy."

For more:
- see this Reuters article

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