Panel: Connected cars need smart turns on pricing - Mobile World Live

Panel: Connected cars need smart turns on pricing

21 SEP 2016

LIVE FROM GSMA MOBILE 360 LATIN AMERICA, MEXICO: Executives from AT&T, Cisco Jasper and Vodafone Brazil agreed on the need for radical thinking about the pricing of connected car services, but there was less consensus on whether governments should be involved.

Mark Thomas, Cisco Jasper’s head of connected car product marketing, suggested there could be a value from the potential industry wide shift to car subscription, rather than ownership.

This model would also benefit connected car services, he said.

Why pursue the European model where drivers pay for connected car subscriptions, he asked? “Why not leapfrog to transport-as-a-service? Car manufacturers recognise this. LatAm could be a leader in that.”

Daniel Tibor Fuchs, CIO of Vodafone Brazil, also showed some creative thinking when he suggested that motorists could be offered free coffee to pull off the motorway during a traffic jam. “Then they might buy something else.” Again it was an example of finding a way to pay for connection that does not involve a subscription fee.

Thomas said history proves that only about 15 per cent of users are open to a subscription for an internet service, while the remainder do not want to pay. The other options to recover costs include offering the basic service for free, and charging for upgrades or enhancements.

Government adoption
Another encouragment for take up of connected car services is government, he said. “Look at Europe, almost 100 per cent of cars will be connected by 2018, because of regulation.” He was referring to the EU’s eCall regulation which insists on vehicles being capable of signalling the emergency services after an accident.

But Erick Tinoco, director, partnerships and alliances with AT&T, pointed out that the US had managed a high adoption without government requirements. “LatAm has taken a laissez approach. That’s the right approach from our perspective.” Previously, he expressed caution about over-regulation by governments.

In contrast, Cisco Jasper’s Thomas had a more benign view of state involvement. “Regulation is the fastest way to get a whole region to adopt. It solves the chicken and egg argument to encourage connection.”

Author

Richard Handford

Richard is the editor of Mobile World Live’s money channel and a contributor to the daily news service. He is an experienced technology and business journalist who previously worked as a freelancer for many publications over the last decade including...

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