Telecom and automotive industries must find a common tune to open huge opportunities based on billions of connected cars and devices
5G is expected to open huge opportunities for digital services, enabling new types of services based on billions of connected cars and devices. There’s just one hitch: telecom and automotive industries must find a common tune.
Building 5G infrastructure is costly for operators, but mobile subscribers won’t pay enough of that bill. Operators hope that 5G-based industry solutions, e.g. automotive, will generate them a great deal of new business, justifying investments. They see automotive manufacturers and brands as key customers consuming 5G services for connected and autonomous cars.
But some automotive players don’t seem to trust that telecom service providers can answer their needs. Consequently, they want to build their own local 5G infrastructure for their manufacturing plants. They are also wary that telecom network providers may not be ready for 5G deployments fast enough. Car manufacturers wish to handle the security and reliability of the network without relying on third parties. They are also reluctant to expose strategically important digitalization activities and valuable data.
Moreover, uncertainty rises in Europe as safety standards are being legislated related to Vehicle-to-Everything, or V2X, as it’s commonly called. Two clear camps have formed, and they both have strong backing:
The debate is ongoing – but having full interoperability between both technologies is an expensive and complex solution, which doesn’t bring any additional value.
Telecom operators are focusing first on 5G rollouts to large cities, but from an autonomous driving perspective, highways would be an easier problem to solve.
While Automotive OEMs could run their own 5G networks in-factory, building and running a widely available 5G network for their fleets is not feasible, as they lack the economies of scale.
To meet automotive safety standards, 5G infrastructure for highways must have co-investments from several parties in order to make a reasonable business case.
Timelines are critical because automotive OEMs need to plan and integrate technologies in vehicles 3-4 years ahead to account for their lead-time. Yet operators are not ready to provide rollout, coverage, pricing and business models for 5G just now.
While there are cross-industry alliances such as 5GAA (in the C-V2X camp) and Car2Car (in the DSRC camp), there is just too much agenda to push and lots of future business at stake.
At present, we still lack serious discussion about the broader ecosystem. I hope to see much more concrete co-operation cases and promising pilots. Tieto serves both the telecom and automotive industry, and we are keen to facilitate this development.
Mikel is a senior business leader with broad experience in helping global customers bring next-generation high-tech products to market. His passion is to combine business, technology, and software to create value. At Tieto Product Development Services, he is responsible for looking beyond the horizon and leading both customers and teams towards a bright future.