) announced that it has entered into a connectivity deal to
provide machine to machine (M2M) service to
Tesla Motors Inc.
) cars in Europe. M2M world alliance partner KPN is also a party
to the deal.
Telefonica will provide connectivity to Tesla's Model S via
its O2 network in Germany and U.K. and through Movistar in its
home country, Spain. Meanwhile Dutch incumbent KPN will connect
the U.S. car maker's vehicles in the Netherlands and Belgium.
Madrid-based Telefonica's M2M platform, which is powered by
Jasper Wireless, will provide connectivity for Tesla's in-car
infotainment and telematics service, which includes music
streaming, navigation and Web browsing. Further, the remote
diagnostics service from Telefonica will offer added security
with information on safety and performance.
The M2M business is fast gaining popularity among telecom
operators which have identified connected car business as a major
area of focus. According to a report by Machina Research,
the number of connected cars will increase from 10% in 2013 to
90% in 2022.
Based on the growth prospect, operators are busy entering into
alliances with auto makers to enhance their connected car
business. U.S. based
) has also tied up with a number of carmakers, including big
names like Chevrolet, Audi and Tesla. The carrier has even
launched a new automotive platform called Drive along with
opening a new connected car centre in Atlanta.
Tesla is also not far behind. This leading electric car
manufacturer signed a similar deal with Swedish carrier
TeliaSonera to provide M2M service in the Nordic countries of
Sweden, Denmark and Finland, apart from covering Estonia and
Given the gradual recovery in the European economy and strong
demand for Tesla cars in Europe, we believe the deal is expected
to strengthen Telefonica's position in the M2M business.
However, the company will face strong competition from
Vodafone Group plc
) in M2M business, which announced last month that it has entered
into a deal with German automobile manufacturer Volkswagen AG and
its subsidiary Audi to supply connected car services in
Telefonica currently carries a Zacks Rank #5 (Strong
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