DW Economic Journal: Can you describe the scope of your responsibilities at Vodafone?
Gion BAKER: I joined former Cobra Automotive in 2008 and I now lead the Automotive Telematics team at Vodafone Automotive. I am responsible for the development of the global automotive projects including business development, sales, programme management and in-life support.
Could you describe your offering and positioning? Vodafone created a dedicated flagship department called Vodafone Automotive (including Cobra), which is singular in the Telco space: could you tell us more about it?
Vodafone Automotive is a leading provider of connected car products and services – which include InCar Telematics, Stolen Vehicle Tracking and Usage Based Insurance solutions – for fleets, vehicle manufacturers, logistics providers and insurance companies
Observing the market from Vodafone’s vantage point as a leading total communications provider we realised that global connectivity would play an increasingly important role in automotive as vehicles went from unconnected, to connected and then towards autonomous. Furthermore, as a leader in IoT, we knew Vodafone had the global coverage, the support services and provides monitoring services in many industries. By acquiring Cobra we gained proven automotive grade telematics and sensors and the specialist capabilities that are required to operate in this market.
Combining the assets of Cobra and our global network services has enabled us to provide an end to end capability for connected cars, fleet management, usage-based insurance and stolen vehicle recovery as well as roadmap into autonomous driving.
From IDATE perspective, Vodafone seems to be the leading Telco in this space (maybe with AT&T). How do you comment your key differentiators?
Clearly owning a unique asset like Vodafone Automotive is a key differentiator: we have over 900 staff in a specialist automotive business that includes manufacturing, R&D, product development through to customer services in over 50 countries that can respond to a breakdown, emergency or vehicle theft.
Our second differentiator is the ability to provide a single global SIM and connectivity platform that allows car manufacturers to simplify their logistics process and be assured that the vehicle will have the best available connectivity due to our ability to access multiple carriers in each country.
Our third is the ability to deliver these services at scale: not only does this allow us to deliver global connectivity, but also to develop new solutions like “Internet in the Car” that provides telematics, infotainment, WiFi hotspot and consumer payment all through a single future proofed eUICC SIM with global customer services.
Today, only AT&T has a real B2C approach with embedded module implementation. Is it something Vodafone is looking at? Will it be the key app for market take-off?
The market is already taking off.
Whilst initially this was triggered by legislation (e.g. eCall in Europe) vehicle manufacturers now see the connected car as an opportunity to change the way they and their customers interact throughout the lifespan of the vehicle.
Our B2C approach is to provide the services that underpin this new model rather than simply the technology. Our secure operating centres provide direct customer support and intervention in the event of an accident or theft as well as technical support and payment services for internet access in the B2C market today.
Why is automotive a key vertical for Telcos now?
The demands of the connected car in terms of scale and global coverage fit really well with a network operator like Vodafone. In addition, the growth and innovation in this sector is phenomenal. With the advent of the autonomous car, the vehicle and network infrastructure will become even closer, making the network a key part of the connected transport infrastructure of the future.
Telco value proposition future seems to go beyond pure connectivity services. Do you intend to provide value-added services like insurance, etc?
We already provide a wide range of value added services such as vehicle recovery, fleet management, usage based insurance (UBI), intervention services (where there is an accident or break down) and even crash reconstruction where we use advanced analytics to assess the conditions associated with each event.
If you asked me whether we would provide insurance, I would say this is the core business of our insurance customers: we provide the underlying connected infrastructure that allows them to better understand and serve their customers.
How do you consider the adoption of connected car services? How do you explain this?
Connected services have been widely adopted by car manufacturers already. This connection is used to provide a range of services such as diagnostics, upgrades and navigation services. What we are now seeing is an increase in the adoption of driver services like usage based insurance and infotainment services.
Autonomous cars will be 100% connected. Their requirements will be more critical, by far. Are technologies ready for this deadline? Do you believe 2021 introduction is realistic? Do you think 5G is a part of the answer?
You are right when you define the autonomous car as self-driving with no manual input. In this case the connection with the infrastructure will be vital and 5G will be a major element in terms of providing the necessary predictability and latency to make an integrated transport infrastructure work.
We expect that we will see a gradual evolution of more automated functions using 4G and then 5G over the coming years as the volume of vehicles increases and the network evolves.
By 2021 there will be autonomous vehicles but these will use a combination of on board technology and network technology. In high density areas they will become more autonomous and in lower density areas (where the transport infrastructure has not been updated) they will become more automatic using the on board systems.
Autonomous cars will deal with tons of data due to V2V and V2X communications. Hence, transmitted traffic will be much higher compared with current connected cars. Do you believe this will impact the business model and the way to sell a car (from pure CAPEX to CAPEX+OPEX, on the user perspective)? Do you consider personal data will be part of the next generation business models? Is it realistic?
The amount of data generated by a car will increase with V2V and V2X – and it may be that we will buy data in the same way as we buy petrol or insurance today. It may also be that lease and car sharing models become the norm due to urbanisation in which case everything will be rolled up into a single fee for the usage period. The one thing for sure is that we will see a range of different business models developing around mobility in the future.
With regard to personal data this will be down to the legislation in each country and ownership of the data. Whilst many see the opportunities that arise from re-using and selling data, monetisation may not be straight forward.
Do you see geographical disruptions (emerging areas versus developed regions with strong cultural automotive habits?
In areas with a long history of personal mobility and car ownership where urbanisation and congestion are increasing, then clearly there will be different drivers to regions where car ownership is lower. In both areas, however, the main disruptor will be around access to mobility rather than the vehicle used. Integrated mobility that combines public and private transportation within a shared economy will be the main disruptors. What is interesting is, in order for this to work, connectivity is vital to track and co-ordinate the assets and meter the services associated with mobility like insurance and data.
Finally, how do you analyse the digital transformation in the automotive industry? Do you anticipate convergence with other verticals (smart cities, utilities, etc)? Do you see additional impacts?
The greatest opportunities in the new connected world of transportation will depend on multiple sectors working together. We already see this in key application areas like usage-based insurance and new shared economy models like DriveNow which is a partnership between a rental company (Sitx) and a vehicle producer (BMW) which use Vodafone connectivity.
This will extend further to create soft infrastructure like variable speed limit zones in cities, based on congestion rather than location, dynamic synchronisation of transport modes at interchange points and increasingly the integration with the city infrastructure to manage pollution, congestion, parking and the efficient use of road space.
What we see in the connected car and the autonomous car are the first steps towards an integrated transport environment – what we should not underestimate is the speed of change on this journey.
Best-of DigiWorld Future 2016