Deutsche Telekom, China Mobile in bed with connected cars

Deutsche Telekom and China Mobile have announced a connected cars joint venture to be established in China at the beginning of next year. The initiative is targeted at the automotive industry and aims to enable the provision of 4G-based vehicle information services to ‘connected’ drivers.

Under the deal the two telcos will combine Deutsche Telekom’s M2M capabilities and China Mobile’s local LTE network coverage and capabilities as the biggest domestic mobile carrier.

“Connected car is a strategic initiative within Deutsche Telekom Group, while China is of strategic importance for our connected car business,” Reinhard Clemens, Deutsche Telekom Board Member said. “The partnership with China Mobile is therefore strategically of utmost importance to Deutsche Telekom.”

The joint venture firm will provide hardware, system integration and operation services, as well as the connected car platform and content services to the vehicle line-fit and retro-fit markets.

The companies estimate there will be some 68 million connected cars in China by 2018 and recent statistics show the country’s 2013 total car population reached 137 million.

Deutsche Telekom said that China’s continually growing automotive market and drivers’ increasing demands for vehicle safety and comfort creates a solid foundation for launching the connected car initiative in China.

The move follows similar launches in this space including the recent deal with Orange Business Services’ deal with electric car maker Tesla earlier this month.

Many firms playing in the Internet of Things (IoT) space are keen to target the automotive industry, which has taken a keen interest given the diverse range of potential applications. The entire M2M market is expected to grow up to $20 billion by 2018, up from $8 billion last year, according to Reuters.

It is not a surprise Deutsche Telekom and China Mobile have decided to move into this market given its massive potential. Combined with the fact that generating money through traditional voice and data services is under constant pressure, we can only expect more of these partnerships to emerge.