The mainstream connected car story swerves from focusing on highly conceptual driverless vehicle futurism to technophobic scaremongering like the supposed growing overreliance on sat navs causing havoc among a fresh generation of the cartographically challenged road user. The reality of the connected car is much more middle of the road.

Technically, pretty much anything in connected carland is possible. Elon Musk, CEO of US-auto-firm Tesla, said recently that the motor industry is only three years away from ‘autonomous’ cars rolling off the production line, while Google has its own high-profile driverless vehicle programme. But commercialising the technology for the mass market will take time, demand and scale.

When considering the pace of change in the automotive industry, it’s probably worth bearing in mind that while satellite navigation first appeared as a technology in the 1960s, Japanese car giant Toyota was first to market in its flagship Celsior with a voice navigation system in 1992, and the mass market had to wait until 2002 before TomTom put GPS tech onto the dashboard. Even now, UK penetration of sat nav, according to TomTom, stands at 51 percent. Putting that stat into perspective, UK mobile subscriptions exceeded 100 percent in 2005.

Mobile connectivity has found its way into cars via the owners’ personal devices and manufacturers are looking to get in on this by using those devices as tethered units for other in-car services.  Toyota has Entune and BeSpoke (Scion) as well as Touch & Go in Europe, while BMW, Mini, Ford, Daimler, Nissan, Honda and others have either hybrid and/or tethered solutions in production or development. However, a great deal of complexity is involved with this approach, making it a very high effort and costly solution.  For example, systems need to validate and support multiple smart devices, OS versions and MNO-specific software loads and the OEM will in many cases be simultaneously delivering different types of data across different devices that may all have different billing methods.  Why should the OEMs invest in connected car R&D if all that cellular services seem to offer, much like electric windows and airbags once did, is a slight differentiation or upsell opportunity at the point of sale?

Getting the billing model right is a further complication for car manufacturers, as consumer behaviour is a regional phenomenon as well as a personal preference.  Too heavy a bias towards one type of payment plan is very limiting and will yield low results.  Notably, there is a currently a movement away from traditional subscriptions as many consumers today want the flexibility to buy content and services at a time and place that suits, as they do when buying songs over iTunes. For instance, if someone has to make a long journey, they want to sate their appetite for entertainment on the spot with a ‘microtransaction’. Whereas if that same person were asked at the beginning of every month if they would be happy to commit to £25 in advance for the promise of some content in return, or at the start of a year to sign up to 12 x £25 per month, they may be reluctant to add another subscription to a long list of monthly bills.

That’s not to say that subscription-based models don’t have their place. In some markets and for some content it will be the better fit. MNOs must offer retail plans that support traditional subscriptions, per-use payments and short-term periodic usage, as well as the ability to associate the connected vehicle with existing consumer data plans. As well as business models for selling content and services to the consumer, the OEM also needs options for buying connectivity wholesale for diagnostics, telemetry and services like firmware-over-the-air that may not be consumer-facing. The MNO that provides the tools and business models to enable this flexibility will have the most appeal as a connectivity partner.

In order to drive up embedded in-car connectivity solutions, mobile operators need to involve OEMs in the on-going business model.  One carrier having more success than most is AT&T, which in February this year announced that it would replace Verizon Wireless as the service provider for General Motors’ OnStar (a service with over six million subscribers in the US, Canada and China that provides in-vehicle security, hands-free calling, turn-by-turn navigation and remote diagnostics systems) and then announced an agreement with SiriusXM to provide mobile connectivity supporting security and services for Nissan.

What was the allure of AT&T for GM and Nissan? Well, as GM CEO Dan Akerson (a former telecoms executive) told analysts, the car company had previously not been properly compensated for the service OnStar provides for cellular-phone carriers. “With the new contract, when it kicks in, every time we implement, we get $20 [from the carrier]”, Akerson said. GM also gets revenue-sharing from the service: “There is a whole new frontier for us,” with margins that will exceed what “you typically see in a manufacturing business,” he said.

Going beyond revenue-sharing agreements, AT&T is putting its money where its mouth is.  It has certified and supports nearly 1,300 varieties of connected devices, with labs dedicated to bringing new devices to market, global roaming and integrated SIM provisioning, billing and reporting tools. AT&T researchers are using decades of speech recognition expertise to deliver a connected, voice-enabled virtual assistant for use by automotive manufacturers.

AT&T was the first to enter the market with a proprietary, single global SIM platform giving automotive, consumer and M2M equipment makers the ability to work through a single carrier to wirelessly enable and connect products. Announced last year, AT&T’s single SIM platform delivers built-in access to wireless and data networks throughout most of the world, with service in more than 200 countries and access to more than 600 carriers worldwide. The platform is backed by a world-class service-management solution, AT&T Control Center powered by Jasper Wireless, offering Enterprises diagnostic, monitoring, and alert/response capabilities proven to help automate operations globally and reduce the cost associated with connected vehicles, consumer devices and M2M deployment.

There are plenty of technical, business and cultural issues to iron out before we get from a current situation in which a sizable percentage of the driving population don’t have (let alone use) sat nav to one in which robot cars are ploughing up and down the highways and byways. Undeniably though, connected cars are at the start of a growth curve that will accelerate upwards exponentially.

James Dawson, senior director, Market Development Connected Car at Jasper Wireless