Traffic builds from in-car connectivity and applications

The ability for cars to communicate wirelessly with each other and roadside infrastructure is starting to become a commercial reality. George Malim reports on which technologies are being deployed, the likely applications and the shape of the value chain

Traffic builds from in-car connectivity and applications

BMW ConnectedDrive, Ford SYNC, Mercedes @yourCOMMAND, Volvo On Call and Fiat’s Blue&Me are just some of the initiatives car makers are bringing to market that use systems and cellular SIM cards embedded in a vehicle to connect to a range of applications or integrate with the vehicle driver’s smartphone.

However, it’s not just cellular technology that is being piloted and trialled. GPS and Wi-Fi technologies – especially in the 5.9GHz band – are being assessed and, with eCall, an automatic vehicle emergency system being planned by the European Union, it is possible that from 2015 all new cars sold in the region will be required to be fitted with a mobile data connection and SIM card that automatically calls the emergency services when necessary.

Telematics projects

Telematics initiatives have been active in that sector for more than 30 years with varying degrees of success, as Andreas Festag, chief researcher at NEC Labs Europe, explains: ‘We started in one of the German national projects initiated by Daimler, which had a long track record of telematics projects, at the end of the 1970s,’ he says. ‘It failed because the core technologies we have available now didn’t exist then. GPS and WLAN communications didn’t exist and there were no smart, powerful computers.’

Organisations such as the CAR 2 CAR Communication Consortium, which is working to promote Intelligent Transport Systems (ITS) and Inter-Vehicle Communication Systems, have done substantial work in the standardisation of in-vehicle technologies and have been involved in trials in France, Finland, Germany and Sweden, says Festag, who adds that the car makers are pushing uptake of the technology in Europe.

‘From my perspective, the technology is mature and there are published standards,’ he says. ‘There is a memorandum of understanding about to be signed among car makers to start in 2015 and I believe that in the EU this is very much driven by car makers – in the US the Government is more of a driver.’

eCall is a European initiative intended to bring rapid assistance to motorists involved in a collision anywhere in the European Union (see feature on p55). The project aims to deploy a device installed in all vehicles that will automatically dial 112 in the event of a serious road accident, and wirelessly send airbag deployment and impact sensor information, as well as GPS coordinates, to local emergency agencies. eCall won’t only be about the core safety application, though.

‘We’re convinced eCall will save thousands of lives,’ says Maurice Geraets, director for new business, automotive, at NXP, which provides the chipsets and hardware. ‘eCall is mandatory for all new cars in Russia from next year and Europe is likely to decide to make it mandatory from 2015. For life saving applications like eCall, quality is the key and systems will support additional services such as remote [vehicle] diagnostics, service calls and breakdowns.’

Premium vehicles

Early deployments typically involve top of the range vehicles from premium manufacturers, but should eCall become a regulatory requirement, the technology will rapidly feed down to mass market models.

Among those trialling the technology is BMW, which has recently agreed a deal with Vodafone Germany under which new BMW vehicles will be fitted with a specially adapted mobile SIM chip from the operator. The SIM will link BMW to its vehicles and provide customers with access to in-car services, such as BMW online services, a personal concierge service for BMW drivers, and an emergency call function.

The five-year agreement between Vodafone Germany and BMW involves installing the SIMs, which are ruggedised to withstand temperatures from -40C to 85C and are coated with anti-corrosive protection, on the production line. The SIMs are projected to have a lifespan of a decade.

Festag thinks the car makers will continue to lead eCall initiatives because they are positioned to make sense of the business case. ‘According to my understanding, customers won’t pay for safety services,’ he adds. ‘But in the end, the customer covers the full cost of the car so they pay in one way or another.’

However, some industry insiders see eCall as a red herring. ‘Will eCall come about?’ asks Martin Otter, insurance vertical development manager at Trimble. ‘I’ve been involved in this industry since the early 2000s and I think it’s as far away as it ever was. I’m also not sure that the eCall trigger needs to come from a device embedded within a vehicle. Smartphone technology has come on so much that you can do all the things you might want to do in a vehicle on a handheld.’

Others see opportunities now for organisations to retrofit wireless systems to existing vehicles and fleets and use wireless technologies beyond the GSM family such as Wi-Fi and GPS.

One application is in the insurance market and the location-based capability of GPS could be a critical enabler of highly granular applications. In European markets and the UK in particular, car insurance premiums for specific types of driver are so high that the cost of deploying a system that monitors vehicle usage and driving style and retrofitting it to a vehicle can easily be justified by a reduction in premium.

The situation is especially acute in the UK where young drivers can be charged premiums of £3,500-£4,000 per year. Add to that EU legislation that makes it illegal to discriminate on gender and young female drivers – typically a lower risk than young males – are faced with massive premiums.

‘All insurers are seeking to better understand the risks they’re underwriting,’ explains Linden Holliday, CEO of MyDrive Solutions, which provides a system that collects, analyses and compresses usage data using a sophisticated algorithm.

‘It takes data consumption down to half a megabyte per calendar month for an average driver,’ he says. ‘If you can give a young driver a 15-20% reduction in premium, it’s obviously a large number. That’s necessary because there are costs involved. There’s the physical cost of the box and either installing it on the production line or retrofitting it and then the data has to be collected and analysis has to be done.’

Data consumption

That’s why, in his view, the insurance market will focus on young drivers for the next few years until the cost of platforms becomes lower and makes sense of the business case for driver types with lower premiums. For communications providers, this type of application isn’t a high value business.

‘We’re on half a meg a month so it’s tiny,’ admits Holliday, ‘but, as the market matures and insurance companies start to understand what sources they can profile risk from, that data consumption could become greater. It won’t be long until they want video data. An inward facing camera, for example, could determine who is in the car to prevent fraudulent injury claims.’

Otter adds that while insurance applications have been around for some time, they are only now becoming viable. ‘The huge increase in premiums, particularly for young drivers, has got it to a tipping point where it is viable,’ he says. ‘Our core business is in fleet and fuel consumption and addresses productivity, compliance and consumption, so providing data around how, when and where the vehicle is being driven is a relatively simple add-on. The business case is made up from the benefits case around fuel consumption.’

Frank Sent, business manager, M2M telematics at Nokia Siemens Networks, also sees the business case presented by fuel consumption applications. ‘There are analytics that could enable 10-18% of fuel costs to be saved,’ he says. ‘That’s easily 250-300 per year, so if you add that to insurance profiling that results in lower claim costs through assuring people drive with greater care, there are savings to be made that justify the costs. There’s enough [benefit] among a fee of 20-25 per month that can be spread across the various players to make the business profitable.’

Sent says Nokia Siemens Networks has reference projects underway in Finland and China. ‘In Finland we have a pilot with the Government and a mobile operator about road charging and eparking,’ he explains. ‘Data is collected and matched with sophisticated, differentiated GPS and the Government is able to implement taxation based on roads driven and parking lots occupied. It can all be paid for without using methods other than a phone bill. That project is going to be extended to enable the Government to work with traffic management applications.’

Governments, road infrastructure owners, fleet operators and insurers all see value in the increased connectivity of vehicles and the business cases are starting to crystallise as the cost of deploying in-vehicle equipment falls and the value it can provide becomes greater. That makes sense of the set up costs involved and provides opportunities for all those in the value chain to derive profit from the services they deliver.

Written by Wireless magazine
Wireless magazine

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