Over the past few years, IoT has become a top of mind opportunity for mobile network operators (MNOs). 90-percent of net additions in Q1 2018 came directly from connected cars and IoT! But success will ultimately depend on consumer adoption, which up this point has been slow. According to a recent study, however, the wait for massive IoT adoption might be over. “How do we unlock revenue in the early stages of IoT?” This is the question carriers around the globe are asking. And Ovum believes the answer lies within driver safety.
Driver Safety and the Connected Car
Connected cars are at the core of IoT investments, but the main challenge lies in adoption. Interest in the connected car is growing, but it isn’t converting into much revenue for carriers.
Although new vehicles will undisputedly dominate the future, used cars are dominating the market today. With the average age of vehicles on the road in the U.S. at 11.6 years, it’s clear consumers are holding on to their vehicles longer. As a result, drivers are beginning to want to get more out of their used vehicles –and this is where MNOs can capitalize. The question: how can carriers get new-car safety features into used vehicles? And what is the most practical and effective way to bring new features into used cars?
Hardware is Hard
Although a significant opportunity, the used car market has been tough for MNOs. Converting hyper-connected people who like getting things for free is no easy feat. Almost every major wireless carrier has a hardware solution in the market, but none has succeeded in gaining any real momentum. Very few used vehicles have come online as a result, and MNOs in both mature and developing markets are beginning to look to other solutions.
Enter smartphone telematics.
In the last decade, smartphones have become a central part of everyday life. In only a few years, they have become an integral part of how we interact with family, friends
Cars have gotten smarter, but smartphones are getting smarter at a much faster rate. And while more and more new vehicles come equipped with fancy gadgetry, smartphones remain the most effective and practical way for consumers to access life-saving driver safety features. This is a positive trend for wireless carriers, and one Ovum believes operators can monetize quickly.
The Driver Safety Market Opportunity
Obtaining a precise view of the effects of distracted driving across regions is difficult. Distracted phone use is an under-reported issue that’s been difficult to measure for years. But recent research can point to the disastrous consequences of distracted phone use while driving. The question: how can distracted drivers be encouraged to change their driving habits?
Existing embedded and aftermarket devices in the market, such as GM’s OnStar, are proof that there is existing demand for driver safety programs in the market. Today, consumers are prepared to pay anywhere from $25 to $60 per month to gain access to safety services.
However, the greater opportunity for driver safety services lies in smartphone-based solutions. The ability to track individual drivers, the growing ubiquity of
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Most MNOs already possess a number of the elements necessary to deliver a smartphone-based driver safety offering, such as strong network and data security infrastructure, significant marketing expertise, and strong consumer brands.
While these initiatives provide a clear social good, they also present a significant revenue opportunity for providers of such services. Of all the current players in the market today, MNOs are in the strongest market position to capture this opportunity.
To learn how driver safety can help you boost average revenue per user and customer engagement in 2019, download the Ovum White Paper here.