General Motors(GM) announced pricing options for the new OnStar 4G LTE service. The service, which rolls out next month, first provides users with a three month or three gigabyte trial period, whichever comes first. Pricing for most data packages are comparable with AT&T’s 4G LTE services, with a 3GB monthly plan costing $30 and a 200MB plan costing $10 (enough for ~13hrs of internet usage). Current OnStar advisory services subscribers will receive a $5 monthly discount on plans less than 1GB.
Why Connected Cars ?
We are heading into an era of Inevitable convergence with active safety & future autonomous vehicles. This helps Build better customer relationships & add appeal to younger buyers (stem density declines) and Better vehicle monitoring & data monetization potential. On the telco front, this implies Improved bandwidth (LTE). Of the ~300 million vehicles on North America roads today, only <25% can be defined as “connected". Connected Cars Lower Cost of Servicing ?
Remote diagnostics, predictive maintenance and, by that, reduced warranty cost are some of the most important parts in the connectivity business case, besides the traditional parts of revenue, like car and option sales. Also helps in Collection of real-time data, remote software updates, early detection of quality / design issues.
Next-gen safety & security, remote car sharing (social car sharing), UBI, diagnostics, concierge. Going forward, We expect OnStar to become an app in the GM ecosystem. Improved emergency services (use of cameras). Infotainment availability through in-car applications, real-time navigation. In future, Vehicle-to-vehicle (V2V) or vehicle-to-infrastructure (V2I) communication.
OnStar’s LTE rollout might add another ~$400 million of incremental annual gross profit over time. A successful rollout of these services could allow GM to lead in the Connected Car megatrend while providing a modest but important margin lift towards the 10% goal in North America.