AT&T has built a virtualized packet core network in Europe to improve its Internet of Things services for customers in the region, following a similar move in Canada. The networks, which will initially support connected cars but will expand to support other IoT services, shows how leading IoT providers such as AT&T are moving beyond their traditional domestic markets to build international IoT businesses.
AT&T follows auto makers into new markets
AT&T, which has connected car deals with nine of the world’s 15 major auto manufacturers, had 4.8 million connected cars on its network in 2Q15 and is moving beyond the US to support its global customers as they roll out connected cars in Canada and Europe.
In Canada AT&T enables GM connected cars with OnStar safety services and Wi-Fi hotspots, and in Europe the US carrier supports Opel and Vauxhall models from GM with OnStar services. Outside the US AT&T provides connectivity for cars via its Global SIM solution, which is based on hundreds of roaming agreements with mobile carriers worldwide.
In a new move underpinning its global ambitions for IoT, AT&T has invested in a virtualized enhanced packet core network in Europe in an effort to ensure quality services for its connected car customers in the region. This follows a similar move by AT&T in Canada as a result of its connected car agreement with GM covering the US and Canadian markets. The investments bring an AT&T packet core close to customers in Europe and Canada to improve speed, latency, and other aspects of connected car services.
AT&T says the virtual core networks, housed in data centers across Europe, will initially support connected cars but will expand over time to support a host of IoT services. It is also easy to imagine that AT&T will make similar investments in other regions.
The IoT investments by AT&T in Europe and Canada clearly pale in comparison with the overall investment of incumbent telcos in those markets, given their nationwide networks, leading brands, extensive distribution systems, and potential for gaining traction in IoT if they don’t have it already.
But AT&T’s IoT investments also sound an alarm for telcos in Canada, Europe, and elsewhere. The message is clear – IoT leaders such as AT&T are already taking advantage of their early lead in connected cars and other IoT segments to follow their customers into new markets that other operators naturally see as their home turf.
AT&T is far from the only leader in IoT, but it is a good example of how early movers are already using the new market of IoT to expand beyond their traditional footprints. In practical terms, it means AT&T is now earning connected car revenues in Canada and Europe, and it’s hard to see that as good news for incumbents in those markets.
The IoT Landscape, TE0004-001037 (August 2015)
“CTIA 2015: AT&T cashes in on IoT as Verizon bets big on OTT,” TE0001-000989 (Month YYYY)
Mike Roberts, Practice Leader, North & South America