The top US automaker, General Motors Company (NYSE:GM), announced that its OnStar unit, in collaboration with AT&T Inc. (NYSE:T), will start offering high speed LTE network service in its cars that willstart rolling out late in 2014. Since OnStar’s introduction in the 1990s, Verizon Communications Inc. (NYSE:VZ) had the contract to provide the service’s network, but now it seems to have been jilted in favor of its archrival.
OnStar lets drivers connect to live operators who give directions and provide emergency assistance. Adding LTE service in most of the Buick, Chevrolet, Cadillac and GMC models in 2015 is part of the Detroit giant’s safety and security measures, and will hopefully boost sales in both the US and Canada. Other than GM, Audi and BMW have also expressed their plans of working on built-in LTE in their models. Let’s check the details of the additional services that the wireless connection would add.
The service – ‘basically smartphones on wheels’
The agreement between the automaker and carrier requires AT&T to provide 4G mobile internet access to upgrade GM’s OnStar safety and security services, along with a fresh line of infotainment services that include streaming audio and videos, web access, and faster application downloads.
One of OnStar’s major functions is to check on the condition of the vehicle, tracking problems that need immediate maintenance or some repairs down the line. It provides safety to drivers by giving more accurate traffic data, while passengers in the back seat can enjoy movies and television shows. In the words of Glenn Lurie, head of AT&T’s Emerging Device Division, “they’re basically smartphones on wheels,” according to an Associated Press story. Contract details have not been disclosed yet. Also, there is no estimate available regarding the price that will be charged for these add on features.
AT&T Inc. (NYSE:T) already has wireless deals with other auto giants, including Ford Motor Company (NYSE: F), BMW, Nissan, and Tesla, but the OnStar contract is the biggest of them all. AT&T Inc. (NYSE:T) Chief Executive Ralph de la Vega considers the GM contract to be a huge opportunity for the company. The second-largest US telecom operator is closely working with the automaker to build the base of connected cars by providing distinctive services that would give an enhanced experience to drivers and passengers.
However, one question arises: What made GM shift from old friend Verizon to AT&T?