Bloomberg News

AT&T Reaches Deal With Volvo to Connect its Cars to the Internet

April 16, 2014

Volvo

A Volvo Estate concept automobile, produced by Volvo Cars, stands on display at the Geneva International Motor Show in Geneva on March 5, 2014. Photographer: Chris Ratcliffe/Bloomberg

AT&T Inc. (T:US) is bringing its high-speed wireless access to Volvo’s cars.

In the multiyear agreement, the second-largest U.S. wireless carrier will provide mobile connections for Volvo Cars’ services, such as Internet radio, maps and Volvo On Call, which lets drivers remotely start up their cars and alerts the company’s emergency center if an airbag goes off. AT&T’s service will be introduced for Volvo’s 2015 model year, according to a statement today.

AT&T, which has recently announced agreements with Tesla Motors Inc., Volkswagen AG (VOW)’s Audi and General Motors Co., is pursuing one of the fastest-growing new wireless markets as smartphone service reaches saturation. The deal with Volvo Cars, owned by China’s Zhejiang Geely Holding Group Co. (175), will provide coverage in the U.S. and Canada.

“We’re committed to working with Volvo Cars to give their customers a unique and valuable service,” Chris Penrose, senior vice president of emerging devices at AT&T Mobility, said in the statement.

To further increase its appeal as a partner to carmakers, Dallas-based AT&T opened a new car technologies innovation center in Atlanta in January and introduced AT&T Drive, a service that lets automakers pick and choose what features and capabilities to include.

The automotive industry offers wireless companies a host of new opportunities including services such as in-car Internet access, real-time traffic monitoring and pay-as-you-drive insurance.

Selling Point

Technology to keep drivers connected in their vehicles is the top selling point for 39 percent of auto buyers, more than twice the 14 percent who say their first consideration is traditional performance measures such as power and speed, according to a study consulting firm Accenture released in December.

Globally, more than 20 percent of cars sold in 2015 will have built-in connectivity, and by 2025 every car will be connected to multiple networks, according to the GSMA industry association. Worldwide revenue from connected cars will reach 39 billion euros ($54 billion) in 2018, up from 13 billion euros ($18 billion) in 2012, according to research by SBD and the GSMA.

Separately, AT&T said it’s expanding its connected car services to Asia with another deal. In an interview earlier today in Tokyo, Joe Mosele, AT&T’s vice president of business development for emerging devices, said the company has an agreement with an automaker outside Asia to have cars using AT&T’s wireless services in markets including China within weeks. He declined to name the automaker.

To contact the reporters on this story: Olga Kharif in Portland at okharif@bloomberg.net; Scott Moritz in New York at smoritz6@bloomberg.net

To contact the editors responsible for this story: Sarah Rabil at srabil@bloomberg.net Ben Livesey, Stephen West


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