OnStar outlined the latest fruits of its collaboration with Verizon Wireless at CES this week. It’s showcasing a Chevrolet Volt research vehicle connected via VZW’s 4G LTE network to deliver a range of content and enhanced communications services – information services, streaming of multimedia content, video-calling, etc. VZW has been promoting LTE to the automotive industry as a way to future-proof their connectivity strategy and support tomorrow's high bandwidth use cases, and this message seems to be hitting home.
The collaboration makes sense on a number of levels:
Firstly, LTE in general can offer a robust (and fast) enough connection to deliver these services in combination. Watching a YouTube video on its own is not a problem for many networks, but simultaneous sessions across the front and rear seat (video content and calling, online gaming, browsing, etc.) really do need to look at LTE as the starting point – a must-have rather than a nice-to-have.
Secondly, VZW’s network is built on 700MHz spectrum (as a starting point) so offers good geographical coverage. Mobile broadband networks have generally been about delivering massive capacity into urban environments. I visited Softbank’s new LTE network in Tokyo last week – built in 2.5GHz spectrum the cell sites were 50-200 meters apart in order to saturate the streets with high-speed signals, delivering 40-50Mbps to multiple devices in our demo bus. But that network won't extend beyond city limits and the automotive industry needs a high bandwidth network which can offer much wider coverage - the 700MHz LTE network is the only real option today.
Finally, LTE is a reality today in the US market and is here to stay. The US is significantly ahead of the rest of the world in building mobile broadband networks in the lower spectrum bands offering the coverage the automotive industry requires. VZW’s network now covers more than 200 million people in 190 markets (ok, I know I’ve just said there is more to this than urban coverage) and will cover its entire 3G footprint with 4G by the end of 2013. So the US automotive industry, more than any other, can develop LTE services now which will still be supported come the end of their product lifecycles.
The next challenge for the automotive industry will be data pricing. Bundling a year's service with new vehicles could get very expensive (for the OEM) very quickly with these multimedia applications, so new pricing models will be key. Our own survey work has shown that consumers would prefer a single shared data plan to connect their array of 3G/4G-enabled devices, rather than one plan per device. That is still very much a work in progress in the US market, but a necessary requirement if we are going to see the automotive and CE industries enjoy the full benefits of LTE.