By Cyril Zeller, Senior Sales Director - Global Telematics Segment,Telit Wireless Solutions
With about 7.5 million units in service worldwide out of a total available market close to 300 million commercial vehicles, the Telematics industry shows huge potential and is now entering a major consolidation and acquisitions period, especially as we see new verticals addressing personal vehicles also.
The role of computing technologies, internet and connectivity are becoming all the more pervasive. Today, more and more devices are being connected to each other via wireless networks or the internet. A similar revolution is slowly but certainly taking place in the automotive and insurance sectors. Today, cars are becoming increasingly intelligent with car manufacturers offering features that were unheard in the past.
Today, modern cars come with small computers and electronic gadgetry that control all the vital functions of the vehicle. This includes aspects such as engine performance, fuel consumption, engine function information, safety, braking, stability, location based information, etc. This is all based on sensors and other electronic equipment which continuously monitors and processes information from different parts of the vehicle.
However, all this information currently resides within the vehicle and can be only read and analyzed when a vehicle is parked inside a service center. What if there was a way to remotely have access to all these information that is being generated within a vehicle – it would certainly open up a plethora of opportunities and conveniences for consumers and a variety of businesses those which can gain significantly.
This is quite possible today with the adoption of wireless M2M (Machine to Machine) technologies, which have the power to collect the information within a vehicle and wirelessly (using the existing GSM and CDMA networks) transmit it to different locations enabling a variety of applications that deliver numerous benefits.
Commonly known as “TELEMATICS” today, these applications are delivering business efficiencies across a variety of industries. Amongst numerous industries, fleet management and vehicle leasing companies are the ones that are deriving significant business efficiencies due to different telematic’s applications.
The Telematics market is still incredibly fragmented, vertically integrated, and unlike most mature high-tech industries, firmware rather than operating system makes up the base upon which applications run. Despite these characteristics, the Telematics industry has been steadily growing and is now reaching a degree of maturity which translates into huge consequences for the market.
For instance, one of the key concerns of fleet operators is managing unforeseen budgeting risks arising out of unscheduled maintenance of vehicles. M2M technologies enable operators to provide real time event monitoring providing real time information pertaining to transmission, engine performance and other pertinent vehicle health parameters. Visibilities into these aspects allow operators to foresee probable maintenance events early on and help them budget maintenance costs. Leasing companies and fleet management companies can significantly reduce their business risks by bringing down operating costs through better budgetary management. Additionally, they can also pre-empt potential heavy vehicle maintenance costs by taking corrective repair measures before, to prevent extensive damage to vehicle and parts.
M2M telematic applications and technologies can also help fleet management companies streamline their employee management processes by regular monitoring of drivers and other staff that are associated with vehicles. These systems help operation managers understand driver behavior which includes actions such as start and end of work-day, stops control, private activity time, speeding and unnecessary braking, improper shifting of gears, tire pressure and break down monitoring (which are majorly unaccounted for, especially in the Indian business environment), etc .will help bring in discipline and other driver training and development aspects to the forefront.
Additionally, it will also help ensure timely delivery by effectively tracking the shipment and route optimizing using location based systems and GPS devices. This is possible because M2M technologies offer geo-fencing capabilities enabling corporations that operate fleets to alert drivers, if the person or the vehicle goes off limits geographically making delivery more productive. This can result in a huge potential business gain as operators will significantly reduce shipment delay penalties. Dispatch can instantly identify trucks in the vicinity of a new call for pick-up, enabling the business to achieve cost-efficient routing as well as meeting customer service expectations. And the need and cost associated with purchasing and maintaining cell phones for drivers is also eliminated.
Apart from fleet management and vehicle leasing companies, today, insurance companies, public transportation agencies, law enforcement & emergency response agencies are also turning to M2M technologies and applications to enhance efficiencies and business profitability.
For instance, globally, insurance companies are reaping significant benefits. According to one of UK’s largest insurance companies, M2M and satellite based technologies have led to a reduction of 20% in crashes involving young drivers. Insurance companies have started calculating their premiums based on driver behavior through a M2M device which is integrated into the car. This includes collecting data on braking and acceleration, cornering, speed and what time of day the car is driven. The data is then used to calculate insurance premiums - the better the driving, the lower the premium.
Besides this, there is also an increasing trend amongst insurers using M2M technologies to reduce losses due to car thefts. This is because M2M devices fitted into vehicles not only have the power to track the location of the vehicles but also have the power to disable the engines if an unauthorized access has been determined. Insurers across the world are calculating vehicle premiums based on how much “theft-proof” the vehicle is and M2M technologies are proving to be the prime enablers of this business opportunity for insurers.
Additionally, public transport companies, including some in India, are using telematic applications to provide passenger information services and/or enhance productivity of public transport systems by closely monitoring vehicle performance and timeliness of public transport vehicles at specific locations within a city. Today, many computers across metro cities such as Delhi & Bangalore are able to get up-to-date information on the arrival and departure of buses at their specific pickup points and destinations making life much easier for them. The systems also ensures monitoring of driver performance and instilling a sense of discipline within them, which was earlier unheard of in a public transport system in India. Further, telematic applications are also used in public transport concepts and designs to create intelligent transport systems to improve transport outcomessuch as transport safety, transport productivity, travel reliability, informed travel choices, social equity, environmental performance and network operation resilience.
One unique case in point on how M2M applications are used to make road travel safer is in the implementation of the “ecall” services in Europe. eCall is a European initiative intended to bring rapid assistance to motorists involved in a collision anywhere in the European Union. Under this project a M2M device is installed in all vehicles that will automatically dial 112 in the event of a serious road accident and wirelessly send airbag deployment and impact sensor information, as well as GPS coordinates to local emergency agencies. According to certain estimates, eCall speeds up emergency response times by 40 percent in urban areas and by 50 percent in rural areas.
While the above examples only account for a few of the applications that are currently in use the world over, there are numerous such opportunities and concepts that can benefit commuters, vehicle owners and businesses significantly. Not to mention, how such services create additional data revenue streams for Teleco's, who are hard strapped for profitability in the voice-based business.