AT&T has signed a multi-year deal with General Motors subsidiary OnStar to bring 4G Long Term Evolution (LTE) mobile Internet access to millions of GM vehicles, including Chevrolets, Buicks, GMCs and Cadillacs.
The GM deal follows AT&T's November 2012 announcement that it plans to more heavily invest in the connected car market, which it has identified as one of its next "billion-dollar businesses."
By 2016, wireless connectivity is expected to be in more than 50 percent of new cars—and climbing. By 2020, Vision Gain expects that figure to rise to 90 percent and for the connected car market to bring in $600 billion the same year.
The deal also signifies a win for AT&T over rival Verizon Wireless, which over the last few years has supported OnStar's 2G and 3G capabilities.
"Introducing 4G LTE into GM vehicles is a game-changing opportunity, and we couldn't be better-positioned to help drive this movement," AT&T CEO Ralph de la Vega said in a Feb. 25 statement. AT&T's 4G network now covers 288 million people; by the end of 2014, that figure is expected to grow to 300 million.
Adding built-in LTE connections, specifically designed for vehicles, will enhance "virtually every aspect of the driving and riding experience—from safety and diagnostics to entertainment to integration of emerging third-party applications," said Mary Chan, president of GM's Global Connected Consumer division. "Through this built-in 4G LTE connection we have the opportunity to reinvent the mobile experience inside a vehicle."
At the Mobile World Congress show in Barcelona, Spain, this week, GM will show off a series on concept services. The car maker says that its connected car initiatives in the United States and Canada are part of a "broader global strategy."
At the show, GM rival Ford also showed off how connectivity can reinvent the mobile experience inside a vehicle. It announced a partnership with streaming music provider Spotify, which will join Pandora, Rhapsody, the Amazon Cloud Player and other services that integrate with Ford's Synch AppLink feature to enable drivers to control their music hands-free.
Ovum analyst Jeremy Green, in a statement from the show, said having Spotify on board will "undoubtedly" give Ford's profile a boost.
"The music giant's 20 million users will no doubt appreciate [Ford's] announcements, although how many of its users will be able to afford an SUV (or even influence its purchase) will limit adoption," Green said.
Connected cars will soon not only wirelessly connect with more services, but with each other; however, a recently announced plan by the Federal Communications (FCC) commission has the Alliance of Automobile Manufacturers and the Intelligent Transportation Society of America (ITS America) concerned about the future of planned vehicle-to-vehicle (V2V) initiatives.
The FCC, under pressure to make more wireless spectrum available for a public WiFi network, has said it will re-examine a 1999 decision to devote the 5.9GHz band to V2V technologies. To help ease congestion in airports and other high-use areas, the FCC is considering allowing other devices to also make use of the band.
While the ITS and others fear that a rule change could undo years of work on V2V, according to the Autoblog, FCC Chairman Julius Genachowski has said that nearly all WiFi bands are shared by different services, and "automakers will simply have to overcome that challenge just like other tech manufacturers."