Deutsche Telekom and China Mobile will form a joint venture to focus on connected cars in China.
A deal will be signed on Friday, Reuters reported.
The German telecoms will bring its technology for machine-to-machine (M2M) communications, while China Mobile will provide the network.
The company’s investment in the M2M venture would be in the double-digit millions.
M2M service provider AT&T has already signed an agreement with China Mobile. This apart, AT&T has an agreement with GM to deploy LTE for the OnStar service.
Auto makers including GM, BMW, and Tesla are making investments in connected car programs.
Connected cars market
Connected cars segment is a big market opportunity for telecom service providers. Some telecom operators are seeing as much as 90 percent of their M2M revenue generated from the connected car segment.
In fact, North America is the foundation of the connected car business, accounting for 37 percent of global service revenue in 2013. Europe and Asia will be fast-growing regions, said Infonetics Research.
Infonetics expects revenue derived by service providers for the connectivity and other basic value-added services they provide to the automotive, transport, and logistics segment to more than triple from 2013 to 2018, to $16.9 billion.
The connected car services market is growing at a CAGR of 25 percent during 2013-2018, nearly 21 times the growth rate expected for traditional mobile voice and data services during the same time period.
The market for M2M technology is expected to be worth $20 billion a year by 2018, against $8 billion last year, according to telecoms research company Juniper.
M2M in Asia
Asia is the largest regional M2M market, accounting for 40 per cent of the world’s 189 million M2M connections at the end of 2013.
Asia added 55 million M2M net connections between 2010 and 2013 and China was the primary driver of growth in the region, adding nearly 39 million M2M connections during the period, said telecom industry association GSMA earlier.
Demand from the energy and transportation industries has driven much of this early growth, while M2M solutions are also gaining traction in the automotive, smart city, healthcare, education and retail sectors.
Connected cars have already attracted several chip makers.
Global chipset suppliers such as Intel, Qualcomm, Broadcom, and NVIDIA have recently started targeting automotive as a new business development opportunity, competing with established automotive chipset vendors such as Freescale, Renesas, TI, and STMicroelectronics.
Earlier, ABI Research said the installed base of wireless connected devices will exceed 16 billion in 2014, about 20 percent more than in 2013. The number of devices will more than double from the current level, with 40.9 billion forecasted for 2020.
Baburajan K
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