South Africa
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Vodacom doubles down on connected vehicles

Vodacom’s plan to turn your car into a mobile device is paying off as the company says it is now connecting 4,000 vehicles to its network each month.

As the world inches closer to a future of 5G, the latest standard for communications technology, an increasing number of motorists are opting to have their vehicles equipped with broadband connectivity to stay online while on the road.

Motor vehicles are fast becoming a big part of the internet of things (IoT) — a network of physical objects, embedded with sensors, software and other technologies for the purpose of connecting and exchanging data over the internet. In Rwanda, for instance, taxi operators offer passengers Wi-Fi on their commute. 

While browsing the internet bodes well for passengers and consumers, business owners can also track their vehicles in real time while giving staff wireless internet access on the go. 

According to new data from Irish firm Research and Markets, the global IoT market size was estimated at $216.14bn (R3.43-trillion) in 2020 and is expected to reach $266.5bn in 2021, and at a compound annual growth rate of just under 24% to reach $772.1bn by 2026.

Given the opportunity, SA’s largest mobile operator has invested in IoT, specifically connected vehicles, as an area of future growth. In the six months to September, Vodacom generated about R14.7bn in revenue from new business areas that include IoT, financial services and digital services. 

The company says it is connecting 4,000-4,500 vehicles each month to its network, giving drivers and passengers, wireless internet access on the road. This offering has now been expanded for vehicle fleet owners.

In 2019, Vodacom signed a deal to have all new Toyota and Lexus models sold in SA fitted with in-car Wi-Fi connectivity. Technology group Altron would provide the Wi-Fi device and vehicle monitoring would be done via Vodacom’s data network, boosting its sales of mobile data products.  

Pavesh Govender, managing executive for IoT at Vodacom Business, told Business Day that the company had connected just under 50,000 vehicles since the launch, even though the programme has been hampered by slowing vehicle sales during the Covid-19 lockdown.

With the economy starting to recover, so have vehicle sales, with the mobile operator starting to see an uptick in new-vehicles sales.  

“On average, we’re now connecting 4,000 to 4,500 vehicles a month to Wi-Fi,” Govender said.

The service allows owners of new Toyotas to also check the health of their car’s battery, receive vehicle mileage details, and find their cars in crowded areas using GPS and roadside assistance, via the company’s MyToyota mobile app.

Toyota SA was the first of the global automotive company’s operations to offer this service.

The service was initially focused on the retail vehicle market, but that has now been extended to cater to fleet managers or businesses that have multiple vehicles. 

Govender says “basic telematics information is given to fleet owners. It also gives fleet owners the ability to activate a Wi-Fi hotspot for staff.”

Using the example of a courier company, he says such operations “often have drivers that have phones, tablets and other devices to register proof of delivery and for signing. Something like this allows fleet managers and business owners to make sure that staff are always connected.”

Fleet owners can also access driver behaviour data to analyse a driver’s cornering, braking, speeding, and accelerating for performance management of drivers.

Govender says one of the main challenges in getting people to sign up is educating potential customers about how the system works and its advantages. 

“With consumers, we educate the dealers, and the customers as they come into the showroom, but with the business customers, it’s a little more difficult because the fleet operators are not the ones coming into the showroom to buy the cars.” 

“We recognise that it will probably take us a little more time to ramp up. Educating means we have to go to customers and have conversations directly. We’re in that cycle now. The first six to 12 months will be about educating customers about how it all works, how to leverage value from the service, to try to get them to activate and connect,” said Govender. 

Despite the effort needed to get such customers, Vodacom appears willing to take it on. Where consumers often buy one vehicle at a time, fleet owners can buy as many as 1,000 in a single transaction. 

So far, the most interest is coming from car rental companies, many of which had already been offering internet connectivity for their customers through external devices.

With an estimated 5-million commuters using taxis for everyday travel in SA, Vodacom also sees opportunities to connect taxis to their system. The mobile operator has a deal with Quickloc8, a start-up specialising in technology for the taxi industry, with about 2,000 taxis connected to Vodacom’s network.

But to address the entire market of an estimated 250,000 taxis across SA, Govender admits that this is still a tall order and  many attempts have been made previously by various parties.

“It’s an amazing opportunity but it’s complex,” he said.