Verizon Communications has announced it will acquire Hughes Telematics, a connected-services company that offers telematics for the automotive and fleet industries. The purchase price for the acquisition, announced June 1, was $612 million.
Verizon plans to take Hughes' telematics technology beyond cars and trucks to grow its machine-to-machine (M2M) capabilities in mobile health. M2M allows for data transmissions from sensors in an automobile or on a patient to a central cloud-based network.
"In powerful combination with Verizon's global IP network, cloud, mobility and security solutions, Hughes Telematics' flexible service-delivery platform has the potential to reach beyond the automotive and transportation realm to create new opportunities in m-health, asset tracking and home automation," John Stratton, president of Verizon Enterprise Solutions, said in a statement.
Verizon will expand its wireless networks into the automotive and fleet telematics areas with Hughes' telematics services. Hughes' service-delivery platform can transmit data wirelessly to a central dispatch system if repair and maintenance on a vehicle is necessary.
This wireless reporting capability translates well for health monitoring, said Rob Enderle, principal analyst for the Enderle Group. A massive number of people need to keep doctors updated through wireless alerts, Enderle told eWEEK.
"It's believed that [wireless health monitoring] is one of the great market-expansion opportunities that we're likely to see this decade, so with this acquisition, Verizon is going to try and establish itself as a lead player in this undoubtedly very lucrative market."
A subsidiary of Hughes called Lifecomm already offers a cellular bracelet called the Mobile Personal Emergency Response System (MPERS), which can monitor patients in or out of the home. The unit allows seniors to remain independent and features two-way voice communication, automatic fall detection and activity monitoring.
Sprint and remote-monitoring device manufacturer Ideal Life demonstrated a similar device, called the Pod, at the January 2012 International Consumer Electronics Show. The Pod uses M2M to provide real-time data exchange between patients and Ideal Life's cloud platform, so that doctors can monitor chronic conditions, such as diabetes or hypertension, while the patient remains at home.
ABI Research forecasted the M2M market to grow to 365 million cellular connections by 2016 from 110 million in 2011.
In addition to smartphones, tablets and push-to-talk devices, the health care industry will need to support M2M devices as patients who are unable to travel to a medical facility seek remote care.
The deal is subject to a waiting period under the Hart-Scott-Rodino antitrust act and will close in the third quarter of 2012, Verizon reported.
Verizon will retail Hughes Telematics' management team and the unit will become a subsidiary of the Verizon Enterprise Solutions group. As a unit of Verizon, Hughes will be able to grow its services and expand its customers and industries worldwide, Jeff Leddy, CEO of Hughes, said in a statement.
On March 2, Verizon launched a new practice to offer telematics in specific verticals such as automotive and transportation.
With Hughes' technology, Verizon also plans to expand its telematics services in asset tracking and home automation. Hughes also offers GPS, communications and safety tools for vehicles.
With baby boomers steadily aging, the wireless health market brings the potential to advance beyond simple communication using telematics services from Hughes and the OnStar system from General Motors, said Enderle.
For Verizon, Hughes' acquisition also gives the telecommunications company patent protection from intellectual property lawsuits, Enderle suggested.
"It's as much for [intellectual property] patent protection as it is to advance in the market, and Hughes has one of the more-advanced services, so it allows [Verizon] to move into the segment and protect their advancement," he said.