Author(s): Raghu Gopal
This week, America's largest mobile carrier, Verizon, announced plans to purchase Telogis, a privately-held company from California that develops cloud-based solutions to remotely manage vehicle fleets.
For example, Telogis' cloud-based platform allows fleet owners to remotely monitor and maintain detailed usage statistics for their lorries, providing management with information such as worn parts and excessive speeds.
According to the company, on-board diagnostic products and services are used by enterprises in more than 100 countries worldwide, and its products are used by top automotive companies including Ford, GM and Volvo.
For Verizon, the acquisition allows it to expand its telematics unit, which is already active in more than 40 markets worldwide. In the US, Verizon offers its own on-board diagnostics hub and service for passenger cars — a device called Hum that plugs into the car's on-board diagnostic port. Like the services provided by Telogis, Hum allows car owners to monitor the health of their vehicles as well as their use. For example, it provides remote alerts about speeds and also allows the owner to set geofences, or virtual barriers, a feature aimed particularly at parents of teenage drivers.
In the US alone, there are more than 250 million passenger cars in use. Connecting vehicles is a substantial growth area for telecom providers and other technology firms at a time when their core markets are reaching maturity.
We expect Telogis' platform to enhance Verizon's telematics business for connected vehicles and mobile enterprise management, allowing it to better compete with AT&T, which has been particularly successful in the connected vehicle market. We note that AT&T's push into connected cars was a major contributor to the carrier reaching nearly 30 million connected devices at the end of March 2016. As we move into an era of 5G connectivity and autonomous driving, this is a clear area for expansion.