The necessary agile car connectivity strategy

Car connectivity has become more and more strategic for OEMs. Infotainment and connected ADAS (Advanced Driver Assistance Systems) has become key differentiators for selling cars.

As a car is now software defined, features could be updated over the air during the entire lifespan of the car on the road.

This means that car OEMs should be able to adapt and manage the appropriate worldwide connectivity over 20 years for a single car model.

As new software functions will be available, requirements for more performing connectivity may raise, such as lower latency for ADAS, better cellular coverage (always best connected), alternative connectivity such as satellite for all time available emergency services.

The main challenges for OEMs with the rise of the connectivity services are manifold:

• Heterogeneous regulations across the globe:
• regarding roaming: many states or MNOs (Mobile Network Operators) banning permanent roaming
• regarding data sovereignty: states banning/restricting the sending of car data abroad, thus requiring local cloud and data treatment facilities.
• Cellular costs and partners:
  • Cellular costs have become an increasing part of the overall OEM P&L and OEMs should permanently leverage the size of their fleet to get the best cost units while MNOs try to maximize this new IoT business.
  • OEMs have no leverage on their contracted MNO/MVNO’s own roaming partners: they may not have the best quality/coverage and costs locally, and it may be difficult to get local breakout to get low latency services or comply with local data sovereignty regulation.
  • Third party MNO/MVNOs contract commitments
    • MNO/MVNOs contracts usually have a minimum duration (3-5 years). Negotiated terms that seemed fair when signing may become too costly or not adequate after a while, and terms renegotiations are usually difficult (and with anyway late outcome) during the course of the contract.
    • OEMs have adopted the M2M eSIM (SGP02) that suppose to allow easy swap of MNO/MVNO partner fort the entire car fleet. However in practice it is far less simple and all parties should positively work together so it could be successful; and when the departing MNO/MVNO is not happy, that may lead to major troubles.
• Sudden events:
  • In 2019 Turkey decided to impose that all cars sold in Turkey use a Turkish SIM system out of the blue. That meant that OEM international connectivity solution could not work in Turkey suddenly; and OEMs needed to build an ad-hoc local solution to provide services locally.
  • Similar or other restrictions are impacting a growing number of countries such as Brazil, India, China for example that would require OEMs specific solutions.

In view of this global picture, OEMs needs to keep an agile positioning to tackle all the connectivity challenges over time. Therefore we believe they should keep over time a toolbox that they could use adequately according to service, market or regulation evolution over time.

Such a toolbox may comprise several elements:

– OEMs should be their own full MVNO by having and controlling their globally distributed core network:

• OEMs would fully master their own services
• OEMs could negotiate home agreements with MNOs in key countries where their car fleet is significant and get best unit costs. In the future they may look at several home agreements with MNOs in said country for optimal coverage for future ADAS such as car automation.
• OEMs could negotiate and select their roaming partners globally, getting optimal coverage, quality and cost.
• the distributed core allows local breakout to get low latency or to keep in the country car data collected locally
• OEMs could add easily non-cellular network access such as satellite to their core network as the core network is access technology agnostic.

• OEMs should embrace the new IoT eSIM
  • The new SGP 32 standard piggy backs on the already well developed consumer SIM standard and ecosystem
  • The Iot SIM should provide a far easier switch from cellular service provider than the M2M SIM

• OEM should have a grip of their IoT platform
  • It should provide proactive connectivity management, allowing
    • Quick network reallocation
    • Detailed performance and cost follow-up
  • It should provide devices/modems management
  • Cross network software update
  • Integrations with third party MNO/MVNOs networks for single pane of glass visibility

During the life span of the car model those tools should be used to react to changes. For example, if MVNO model could not be developed locally (for regulatory or cost reasons), in case of permanent roaming ban, the OEM could switch from its own MVNO’s or a MNO’s international roaming model to a local MNO subscription with an IoT eSIM.

These are some of the basic tools OEMs may need to have to sustain their connectivity services globally. However future requirements would need much further tools to master increasingly demanding connectivity requirements (think of the autonomous driving), as well as new business models such as digital twins requiring continuity of data collection between the manufacturing plant, shop floors and the car wherever it is during its lifetime.

If you wish to further discuss this, please reach us at MVNO-global.com