Telecom Companies foray into Telematics to Drive Revenue
The opportunity for mobile operators is growing exponentially in the IoT space with mobile data playing a vital role in device connectivity.
ABI Research is predicting huge revenue growth for the global telematics segment — indicating revenue streams for telecom operators.
With the traditional voice and data subscribers slowing down and reaching saturation levels, a new race for customer acquisition has shifted to the opportunity of connecting vehicles and assets by partnering or acquiring fleet management companies which is by far the most mature solution in the IoT space
Statista forecasts continuing growth of the global machine-to-machine (M2M) industry, to value of $200 billion by the year 2022.
Fleet Management & Commercial Vehicle Telematics
Fleet Management is one of the primary application areas for wireless M2M technology. The opportunity for a mobile network operator within the telematics space is driven by the following factors:
The telematics sector is viewed as a source of expanded revenue and market reach to new segment of subscribers
Worldwide mobile network coverage expansion coupled with hardware agnostic ready to deploy IoT platforms
Updated air interface standards are providing opportunities for 3G M2M markets
Greater data service offerings, provided by mobile network operators (MNOs)
Some government compliance mandates require telematics integration
The fleet and mobile workforce management business connects fleet vehicles to the wireless network and collects data, like driver behavior, to manage vehicles and workers. The business delivers a source of recurring subscription-based revenue from clients such as large logistics companies and local delivery services.
Deloitte's estimates further indicates that data traffic associated with mobility and transportation could grow to 9.4 exabytes every month by 2030 as autonomous vehicles become more pervasive, highlighting the exponential growth in data traffic that could exert significant pressure for higher bandwidth. Telecom companies need to gear up to embrace this imminent challenge. Berg Insight, in their 2017 report on the global fleet management market, states that commercial vehicle fleets are now a core part of the economy in North America and Latin America, with over 14 million commercial vehicles (GVW 3-8) in use and another 18 million light vehicles and cars. They estimate that there will be 13.5 million active fleet management systems in use in North America by 2021. Compare this to back in 2011, when Berg estimated there were 2.8 million fleet management systems deployed in commercial vehicle fleets in North America. Berg predicts growth in advanced fleet management in the coming years, spurred in part by the ELD mandate. The research firm also confirms that the number of fleet management systems deployed in commercial vehicle fleets in North America was 2.8 million in Q4-2011. Growing at a compound annual growth rate (CAGR) of 15.9 percent, this number is expected to reach 5.9 million by 2016. The fleet management segment is very important for telecom vendors active in the M2M space with the following benefits:
Low Average Revenue Per User (ARPU) – there are a few MBs per month
Low bandwidth needs (in contrast with smartphone users whose increasing data consumption is growing at a faster rate than that of data revenue)
Telecom operators such as AT&T, Vodafone, Verizon and Deutsche Telekom have set up dedicated practices to support automotive OEMs in the development of connected car solutions for the global market. Verizon Wireless and Vodafone made strategic acquisitions of telematics businesses to accelerate their strategies, while AT&T and Deutsche Telekom developed their platforms in close cooperation with customers.
The global telematics market has seen acquisitions in the telematics field by Continental and Verizon reflecting the significant growth opportunities for commercial telematics. German supplier Continental has agreed to buy U.S. smart fleet management technology provider Zonar to expand its mobility services and strengthen its position in the U.S. German car and truck maker Daimler would keep its 19 percent stake.
We’re on the brink of a new revolution, where ‘Intelligent IoT Connectivity’ — enabled the convergence of high-speed 5G networks, IoT and AI — will unleash newer market reach and expanding revenue streams for the telecom industry.
If you are ready to embrace this particular trend, Traxroot is here to help, with a selection of affordable, scale-able and effective Fleet Management Software, Traxroot Connect can give you the tools you need to infuse fleet management into your company in less than 24 hours. Schedule your demo of Traxroot fleet management software today.