Vodafone taps into UAE's connected car market with help from e&

Under their wide-ranging strategic partnership, the two telcos have won a deal to supply automotive IoT services to the German car maker in e&'s home market, the UAE.

Mercedes is already one of the UAE's most popular marques, placing second behind Toyota on Dubai-based online car marketplace DubiCars' ranking of the 10 most popular brands in the country.

With in-car connectivity becoming the norm on new models at increasingly-affordable price points – and with the average Mercedes customer falling towards the discerning end of the spectrum – the pressure is on to maintain high standards and generally offer the last word in driving tech.

That's hopefully where e& and Vodafone come in. The former will provide the network connectivity, while Voda will serve up its Global SIM+ eSIM solution. The result: seamless in-car connectivity and access to digital driving services that are all in line with local rules and regulations.

"This strategic partnership with Vodafone marks a significant step in the evolution of automotive connectivity. By amplifying Vodafone's global IoT capabilities with e& UAE's secure connectivity services and reliable network, we're set to deliver a truly seamless and innovative solution for Mercedes-Benz in the country. This partnership will continue to bring cutting-edge solutions to the connected car industry, ensuring uninterrupted connectivity and enhancing safety, efficiency, and the overall driving experience," said e& UAE chief executive Masood M. Sharif Mahmood.

"We're delighted to build on our existing relationship with e& to provide seamless IoT connectivity to more customers in more countries," added Eric Brenneis, CEO of Vodafone Business IoT. "This agreement means that OEMs – like Mercedes-Benz – will be able to deploy their connected cars to their customers in the UAE, while being assured that their customers will reap the benefits of reliable, fully-compliant connectivity. We look forward to our continued relationship with e&, and hyperscaling our managed IoT connectivity service in the region."

The agreement with Mercedes is due take effect from next year, providing a fresh source of connectivity revenue for e&, and increasing the reach – and by extension service revenue – at Voda's IoT services unit.

Before anyone gets carried away though, the actual volume of revenue is unlikely to be all that meaningful.

While Mercedes sold nearly half a million cars in Q2, Europe and China accounted for two thirds of the total, with North America representing its third-largest market. In the rest of the world – which presumably includes the UAE – sales were just shy of 20,000.

Nonetheless, the deal is indicative of a maturing connected car market.

According to Counterpoint Research, the number of connected cars sold between 2024 and 2030 will reach 500 million worldwide, with 5G embedded cars expected to account for almost half of the total. Germany – home to many high-end car makers – is currently the world's biggest connected car market. However, it is on course to be dwarfed by China, which is expected to account for more than a third of global connected car sales by 2030.

With that in mind, Mercedes will be under pressure to keep innovating with partners like Vodafone and e& to ensure it offers the extra level of refinement that its customers demand.