The low latency, five-nines reliability, likely 100 percent coverage, and ability to provide 10 times the bandwidth per connection to 10 times the number of connections, makes 5G technology perfectly suited for many IoT applications. A 5G network can deliver 50-megabits-per-second connectivity everywhere once networks are fully rolled out and bandwidth-intensive, mission-critical IoT applications become possible and practical at massive volumes. Connected vehicles are just one set of IoT applications that by definition require coverage because of their mobility, low latency, because of the need to stream large volumes of rich data uninterrupted, and reliability, because they will be increasingly relied upon to enable mission-critical applications such as assisted driving and usage-based insurance (UBI).
5G has the potential to enable large numbers of connected car applications and enable the business models of car leasing and the servitization of cars through pay-per-use. New opportunities and business models for car-makers will emerge as alternatives or replacements to the traditional model of selling cars to consumers. Instead users will pay for miles driven or hours of operation for fleet vehicles that they can use, subject to service membership. Vehicle service providers will be able to add value and differentiate their offerings by pre-loading rental vehicles with users’ preferences such as their preferred music, seat settings, temperature and mapping and infotainment.
The business case for this is already apparent in UBI where insurers can more accurately charge customers based on their driving habits and use car data to apportion responsibility for accidents with greater accuracy, for example. The savings insurers can make from the data-connected systems provide far outweigh the costs of deploying in-vehicle hardware and paying for connectivity.
In addition, there are high-value services associated with monitoring of vehicles and drivers both for their employers, lease and fleet management companies and vehicle makers’ research and preventative maintenance activities. Further to these are applications that involve utilizing connected cars as a hub for infotainment, applications and content consumed in cars. 5G, because of its ubiquity and capacity, is a logical connection technology that can handle the volume of data traffic required and enable vehicle providers to standardize across global markets.
As the connected car market matures, more mission-critical apps such as assisted and ultimately autonomous driving will come to market. 5G can be an enabler for these services, which come with significant risks and will require the strong security that is inherent to 5G plus the traditional cellular network attributes of zero downtime and low latency.
The level of service required here will be similar to that required by remote surgery; mistakes simply can’t be made.
Accuracy and availability are vital attributes for this market to move ahead. It is heavily regulated and will involve substantial liabilities for connected vehicle service providers and their insurers should anything go wrong. However, the benefits of early-to-market connected driving applications such as the platooning of heavy goods vehicles—whereby a group of trucks drives along bumper to bumper, controlled only by the driver of the first truck in the line—are substantial. Platooning, which is being trialed in the United States and several European markets right now, offers greater fuel efficiency, decreased driver stress and improved road safety.
Carriers will need to be profitably compensated for the 5G services they provide that enable these new business models. This won’t be a traditional network access model because that is unattractive to carriers and carriers will be asked to provide far more than network access. To underpin the network quality connected car services require, carriers will not only have to provide the service level requested, they’ll have to prove they are doing so in order to demonstrate compliance with regulation and also to justify the premium charges they will make for delivering this high-bandwidth, high-availability network.
This future market is only a few years away from reality. To take up their place in it, carriers need to set up and roll out their 5G networks, learning new skills along the way, such as network slicing to dimension capacity for specific applications. They’ll also need to add to their monitoring and big data analytics capabilities in order to assure services and to generate the data new connected car business models will need to succeed. The effort will be worth the reward as carriers transform from network providers to genuine platform providers across 5G-enabled industries.
Connected cars will be only one of the many opportunities 5G brings to carriers to redefine their role in the value chains of many vertical and horizontal industries.
~ Written by George Malim. George is a freelance journalist who covers the telecoms and internet markets.