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MEF and MOBI are collaborating to create the underlying standards and capabilities needed by the mobility and telecom industries to accelerate the availability of solutions for what will become a key aspect of the connected economy. Here, we explore market opportunities resulting from the rapid growth of availability of connected vehicles, i.e., vehicles that are always connected to the cloud.
Some data to consider before exploring the new opportunities for CSPs in the connected vehicle market:
- In 2020, 91% of new vehicles shipped in the US were connected (ABI Research).
- In 2025, expect 115 million global connected car shipments (ABI Research).
- In 2021, 237 million connected vehicles were in operation; in 2025, over 400 million are projected. (Statista).
- In 2021, there were 158 million subscribers to car telematics services worldwide (Statista).
- In 2030, 96% of new vehicles shipped will be connected (Statista).
- Automotive Over-the-Air (OTA) updates market worth will grow from $2.89B in 2021 to $14.47B in 2030 (Market Research Future).
Opportunities for Service Providers
In the fast-growing market of connected vehicles, CSPs can use, not only their networking assets, but also their expertise in multi-domain orchestrated connectivity, performance, cybersecurity, and business services.
When decision makers in the communications service provider (CSP) industry discuss market opportunities, they tend to blur the three trends of “connected,” “electric,” and “autonomous” into one. This blurring is likely due to the perception that these trends are mutually interdependent－at least at the technological level. For example, to a large degree, an autonomous car depends on connectivity to the cloud, and electric cars require a lot of computerized system-monitoring capabilities that align naturally with the computerized capabilities of driving automation. This association results in the broad assumption that market opportunities based on connected vehicles are only going to grow significantly when electric vehicles and autonomous vehicles become far more prevalent.
In reality, the large numbers of vehicles connected to the cloud from the moment they leave the manufacturing plant have already created huge opportunities for communications service providers.
Five Areas of Market Opportunities for CSPs
Let’s look at five key market opportunities for CSPs:
- Basic connectivity
- Connectivity performance
- Verifiable location services
- Service aggregation
Today, millions of vehicles are rolling off manufacturing lines already connected to the cloud over a mobile network using eSIM technology standardized by GSMA. That connectivity allows them to update onboard firmware and application software over the air, as well as to enable vehicle “health” monitoring and other capabilities.
Most vehicles are likely destined for countries other than the one in which they are manufactured, so the ability to connect vehicles immediately and seamlessly to local network operators is essential, even before they have been delivered to their first owner.
Once delivered, connectivity will need to be ensured regardless of whether the vehicle is in an urban area or in a very rural area far from a cell tower. This consistent connectivity will require switching between network operators, whether terrestrial or satellite based.
Furthermore, many vehicles will cross national boundaries while in regular use. Universal roaming with assurance of connectivity and coordinated billing is essential to support mission-critical applications embedded in the connected vehicles.
Finally, as vehicles become more modular, and their components themselves become individually connected to the cloud (e.g., electric vehicle batteries), multiple independent connections may be required from each vehicle.
Orchestration of such increasingly complex and demanding connectivity for millions of vehicles at scale is something that CSPs are well positioned to provide, based on leveraging the multiple standards and open APIs defined by MEF for inter-provider business orchestration and automation, including MEF 55.1, and the LSO API Billie release.
Connectivity Resilience and Application Performance Guarantees
While many people might think that a single 4G or 5G connection to the internet is sufficient for today’s needs, CSPs understand that many cloud-based applications require, or will require, not only guaranteed bandwidth throughput and low latency, but also reliability (high availability).
This reliability will typically require connections from the vehicle (and its components) to two or more network operators simultaneously to both ensure that connections never drop due to lack of coverage by one of the network operators, as well to optimize the performance of applications running over the wireless connections.
High availability is a problem that SD-WAN was defined to solve in the enterprise environment, as more and more businesses migrate their applications into public and private clouds using a combination of dedicated and broadband first-mile access. CSPs can apply their SD-WAN service capabilities and expertise to the use case of multiple wireless links for connected vehicles and offer compelling solutions supporting the growth of this very important aspect of the connected economy. MEF’s extensive standardization work in this area－e.g., MEF 70.1 SD-WAN Attributes and Service Definition; MEF W105 SD-WAN Performance Monitoring and Service Readiness Testing; MEF W119 Universal SD-WAN Edge (members only), as well as its MEF 3.0 SD-WAN certification program－provide a strong base for supporting interoperability between multiple suppliers to the connected vehicle market.
With hundreds of millions of connected vehicles and their components connecting to the cloud, the issue of cybersecurity will become ever more acute from both a safety and an economic perspective. Not only is it important to protect connected vehicles against hacking of their software-based operational systems, but also to guard against their being hijacked to attack cloud-based systems and data. This need will result in new and focused regulation to ensure that connected vehicles conform with at least the basic best practices for connection to the cloud.
MEF, and its CSP members, have already published a standard for securing applications running over SD-WAN services (MEF 88) and are currently developing the world’s first standards for SASE-managed services (MEF W117), Zero Trust Framework (MEF W118 – members only), and API Security Profiles (MEF W128 – members only). This work puts CSPs in an excellent position to extend their security offerings into the connected vehicle market.
Verifiable Location Services
The ability to verify, and therefore trust, the location of connected vehicles in real time offers not only security benefits but is also creating new business opportunities. Insurance companies are already offering usage-based insurance (UBI), based on vehicle telematics. Toll road charges and congestion fees can use data streamed in real time from connected vehicles to calculate what the vehicle owner should pay for usage of roads during a trip.
Charging based on use, in turn, will highlight the need to verify in a non-repudiable fashion the location over time of a vehicle. MOBI has developed the Trusted Trip standard to support these and other use cases. The Trusted Trip standard allows for multiple sources of information (e.g., on-board GPS, triangulation between cell towers, LoRa) on location over time to be correlated to maximize the reliability of the data and to record them in a way that is verifiable by trusted authorities (e.g., CSPs and mobile operators). Such verification services will be commercially valuable and a market opportunity for CSPs.
As connected vehicles and their components become increasingly autonomous consumers of the services outlined above, they will become “customers” for products and services from a very diverse range of industry verticals (e.g., mobile network operators, electric charging, usage-based insurance, toll road and congestion fee operators, local government agencies) CSPs are well positioned to leverage their ability to orchestrate the delivery of diverse products and services over networks in order to offer one-stop shop aggregation services–making it simpler for the connected vehicle owner or operator, and more cost effective for the service providers across multiple ecosystems.
MEF and MOBI welcome all participants in the mobility and CSP ecosystems to join our efforts to accelerate the availability of solutions for what will become key aspects of the connected economy.
For more information, please contact Daniel Bar-Lev, VP Strategic Programs, MEF.