U.S. multinational telecom giant AT&T has entered into agreements with three automobile manufacturers—Chevrolet, Audi and Tesla—to provide in-vehicle wireless connectivity in 2015. Chevrolet has announced that the majority of its 2015 lineup in the U.S. and Canada will come equipped with OnStar LTE, a mobile Wi-Fi hotspot running on AT&T’s cellular network. The feature, which can connect multiple devices in the car, will first appear as an option in four forthcoming models—the Corvette, Impala, Malibu and Volt. Current AT&T customers will be able to add their vehicle to a shareable bucket of data through AT&T’s Mobile Share plans, and will also be able to pay for data on a stand-alone basis. Audi of America has also announced a partnership with AT&T to offer in-car LTE in its A3 line of cars. The Audi Connect LTE service will integrate Audi’s existing MMI navigation service with the LTE to enable it to be used via smartphone and tablet inside the car. Audi will also make data available through AT&T’s Mobile Share plans. And finally, Tesla, the manufacturer of all-electric vehicles, has entered into a multi-year exclusive agreement with AT&T to provide current and future Tesla cars in North America with wireless connectivity (non-LTE), which will power Tesla’s remote engine diagnostics, telematics and infotainment features, web browsing, traffic and weather updates and navigation. AT&T has also announced two automotive initiatives—the AT&T Drive Studio, a connected-car innovation center in Atlanta, and AT&T Drive, a global automotive service and development platform that will allow automakers to choose which services and capabilities to integrate into their vehicles.

Tarifica’s Take

In our Story of the Week dated December 11, 2013, we wrote about a partnership between Orange and the French auto manufacturer Renault to develop LTE in-car connectivity, which is currently in the test phase. AT&T, which already provides SIM-based 3G connectivity in a variety of vehicles, has gone further and is clearly jumping into the automotive LTE market with both feet. The car—a place in which many consumers spend a large proportion of their time each day—is arguably one of the last frontiers for data access, one of the few places (along with airplanes) in which one could conceivably have to tolerate being unconnected to the internet for hours on end. Consequently, demand for in-car connectivity is likely pent-up, and by entering into exclusive agreements with major auto-makers to satisfy it, AT&T could be opening up a very lucrative new field for data-usage revenue. The operator could also attract a significant number of new customers—those who do not have AT&T for their mobile devices but want to buy a Chevrolet, Audi or Tesla and make use of its built-in connectivity and attendant features.