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Accelerating theConnected Car Marketwith Hybrid Networks

WHITE PAPER

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INTRODUCTION

Connected cars are transforming the automotive industry andintroducing changes to the sector that could be asrevolutionary as Henry Ford’s moving assembly line in 1913. Asmodern vehicles increasingly resemble computers and datacentres on wheels, adding Internet connectivity marks aninflection point. Fuelled by advances in wireless connectivity,sensor technology and data analytics, car manufacturers aredeveloping new business models for improving vehicle safety,operation and maintenance as well as providing drivers andpassengers with navigation and entertainment services.

Further down the road, connected cars could disrupt carownership models by enabling car-sharing and mobilityservices. They also mark the start of the journey to develop self-driving, autonomous vehicles and vehicle-to-everything (V2X)communications. Such technologies will provide the foundationfor intelligent transportation systems that have wide-rangingsocial benefits such as fewer road accidents, reduced airpollution and more efficient city planning and operations. Thevision for the future of connected cars is that they will improvenot only how we drive, but also how we live.

According to IHS Markit, worldwide sales of connected cars willincrease from 24 million units in 2015 to 72.5 million units in2023, which means nearly 69% of passenger vehicles sold willcome with connectivity. The growth in the number ofconnected cars on the road will lead to new service revenueopportunities for companies across the entire automotiveecosystem and open the door for new players to enter themarket. Global revenues from the connected car market areexpected to increase from $37.5 billion in 2015 to $151.8 billionin 2020, according to Machina Research.

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For mobile operators, connected cars also offer the prospectfor service growth and are important components of theirInternet of Things (IoT) strategies. Partnerships betweenmobile operators and automotive original equipmentmanufacturers (OEMs) are well established, many of which haveyielded agreements to embed SIM cards into vehicles tofacilitate cellular connectivity to support a variety of services,such as fleet management and vehicle tracking.

As the next-generation 5G mobile standard emerges, promisingnew low-latency and IoT networking capabilities, the pervasiverelationships and collaboration with the auto industry aremodels for how mobile operators can work with other verticalsectors to develop new services beyond mobile broadbandconnectivity. The 5G Automotive Association group of carmanufacturers and communications companies, created in2016, is already working on solutions for future transportationand mobility services.

But despite strong momentum in the connected car marketand progress of mobile operators, some challenges remain. Therequirements for geographic coverage, network reliability,security and consistent user experience are putting pressure ontelecom networks. This white paper examines how hybridnetworks will help mobile operators alleviate pressure on theirnetworks and accelerate connected car service revenues.

CAR CONNECTIVITY CHALLENGES

Cars today have computing power that’sequivalent to 20 modern personal computers,feature about 100 million lines of code andprocess up to 25 gigabytes of data per hour,according to McKinsey and Co. The modernvehicle is more than a form of conveyance fromone point to another, but a sophisticatedcomputer, or even a data centre, on wheels.

The data that cars generate provides valuableinsight about vehicle performance and driverbehaviour that benefits auto OEMs, consumersand related entities like insurance providers orgovernment safety regulators. The informationcan be used for remote diagnostics to preventmalfunctions or to influence future engine designsfor better fuel efficiency. It can also be used toalert emergency services of accidents orbreakdowns. To fulfil these requirements, the dataneeds to be continuously collected and analysedwhile cars are on the move in any location.

At the same time, auto OEMs also need to sendmassive amounts of data to vehicles. Since carsincreasingly rely on software for essentialoperations -- from anti-lock braking and safetyfunctions to infotainment systems -- problems areoften caused by errors in lines of code rather thanby faulty mechanical parts. The software alsorequires regular updates.

Automotive recalls due to software glitches areon the rise. Software-related problemsaccounted for under 5% of all recalls in 2011 andincreased to 15% of recalls in 2015, according toa recent report on auto recalls by financialadvisory firm Stout Risius Ross.

To patch problems and maintain vehicles costefficiently, auto OEMs need to be able toremotely and securely send over-the-air (OTA)software and firmware updates to vehiclesanywhere in the world.

For auto OEMs, the cost savings of software andfirmware OTA updates are potentially great. IHSMarkit estimates that total global OEM cost savingsfrom OTA software updates were $2.7 billion in2015 and will increase to more than $35 billion in2022, with most of the savings derived fromtelematics and infotainment systems updates.

OTA software and firmware updates will be usedfor a wider variety of applications and systems inthe next few years, including maps, infotainment,telematics and electronic control units (ECUs),which control engine performance. Major carmakers including BMW, Ford, Tesla and Volvoalready employ OTA software updates. IHS Markitestimates that by 2022, there will be 32 millionvehicles on the road that will be enabled for mapOTA updates; 96.4 million will be enabled forinfotainment OTA updates; 160 million will be ableto receive OTA updates to telematics control units(TCUs); and 25.7 million will support ECU updates.

Some software updates are more data intensivethan others. Big updates, such as new content forinfotainment systems, are often restricted to WiFifor broadband connectivity. In the event of asoftware-related recall, the fix may need to bepushed quickly to tens of thousands of vehicles.

Connected cars rely on WiFi, Bluetooth and cellularnetworks either through embedded or tethereddevices. But the need to provide critical softwareupdates and consistent mobile broadband tomillions of vehicles is challenging when cars are onthe move, roaming in and out of cellular coverage.

In addition to software updates and remotemaintenance diagnostics, connected cars alsoprovide communications services for drivers andpassengers. Internet connectivity is increasingly amust-have feature in new car models, primarilybecause consumers expect to be connectedwherever they are, even in the car.

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Industry initiatives, such as the GSMA’sEmbedded SIM (eSIM) specification, haveintroduced remote SIM provisioning forconnected cars and other IoT applications tofacilitate cellular connectivity. This allows carmanufacturers to remotely program SIM chipsand wireless modules at a late stage in theproduction process and assign mobile operatorconnectivity services for the country where thecar will be sold. Remote SIM provisioningremoves the logistical challenge of physicallyreplacing SIM cards to change service providersor update services. More than 20 mobileoperators offer services based on the eSIM spec,and it is supported by car manufacturersincluding General Motors, Jaguar Land Rover,Renault Nissan, Scania and Volvo Cars.

Many operators have partnered with auto OEMsand some have acquired auto industry expertise,such as Vodafone’s acquisition of telematicssoftware specialist Cobra Automotive in 2014.The leading operators in the connected carmarket are Vodafone and AT&T, which have thewidest range of service offerings via VodafoneAutomotive and AT&T Drive, respectively, as wellas the most numerous partnerships with carmanufacturers, according to Machina Research.They are followed by Verizon Telematics andother operators in this space, including DeutscheTelekom, Orange, Telefonica, Telenor Group and

Telia Company. While connectivity remains atthe heart of mobile operator offerings, manyhave expanded to offer broader solutions thatinclude data analytics, service platforms andapplications for auto OEMs.

Operators have also sought to expand the reachof their networks through global roamingpartnerships. One example is the Global M2MAlliance and its Multi-Domestic Service for IoTconnectivity across the total footprint of alloperator members, which include DeutscheTelekom, Orange, Telia Company, Telecom Italia,Softbank, Swisscom and Bell.

But the requirements that auto OEMs have forsending software updates, bug fixes, mappingupdates, entertainment content as well asproviding communication services to movingvehicles place coverage demands on mobileoperators that are difficult to meet. Despiteoperators forging roaming agreements andmeeting coverage obligations, cars continuallymove in and out of cellular coverage,encountering “not spots” and variablebandwidth rates across 2G, 3G and 4G networks.

According to OpenSignal’s latest report on thestate of LTE, which measures 4G speed andavailability across 77 countries, 50 countries hadavailability scores higher than 70%. That meanssmartphone users were able to get an LTE signalin more than seven out of 10 attempts. While thislevel of LTE maturity is great news forsmartphone users, connected cars need higheravailability for mission critical communications.

In addition, even the most advanced 4Gnetworks are limited in the amount of contentthey can consistently deliver. OpenSignal reportsthat the global average for 4G download speedis 16.6 Mbps. Singapore and South Korea clockedthe fastest average 4G download speed at 46.6Mbps and 45.9 Mbps, respectively. This limitationexplains why some auto OEMs recommend orrestrict data-intensive software updates to WiFiconnections.

MOBILE OPERATORSPURSUE CONNECTEDCAR OPPORTUNITY

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SATELLITE INNOVATIONS GET INTO HIGH GEARSatellite technology has played a role in telecom networks and connected cars for many years. In telecom networks, satellite connectivity provides transport links or last-mile broadband access where terrestrial networks are difficult and costly to build. Given historical perceptions of high-cost and complexity, satellite was often considered a last resort, particularly among mobile operators evaluating backhaul transport options. In the automotive sector, satellite antennas have been embedded in vehicles since the early 2000s to deliver satellite radio and GPS navigation.

Recent investments and innovations havesignificantly improved satellite performance andcost efficiency. The capabilities of next-generation satellites, along with advances inantenna technology and mobile networkintegration, will enable satellite services to play alarger role in communication networks,particularly for IoT use cases like connected cars.

High-throughput Satellites (HTS). HTS systems, like Intelsat EpicNG, are next-generation satellites that deliver up to 10 times more throughput using the same amount of frequency on orbit compared to traditional fixed-satellite service (FSS). The satellites increase throughput by leveraging frequency reuse and multiple high-power spot beams.

These high-power spot beams with concentrated power enable the use of much smaller antennas than what was previously possible, making satellites a more attractive option for mobility use cases, such as maritime applications, inflight broadband and connected cars.

HTS systems also dramatically lower the cost-per-bit for delivering services. For the first time,satellite can serve applications with economicslike those of terrestrial networks. Openarchitecture designs provide flexibility so thatend users can optimize throughput and spectralefficiency for specific use cases.

Intelsat EpicNG satellites cover 99% of the globeto provide truly ubiquitous coverage. In

“Mobile operators don’t have to wait for 5G toaccelerate connected car service revenues. ”

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addition, the OneWeb low earth orbit (LEO)constellation will be integrated with the EpicNG

fleet, offering an additional layer of low-latencycoverage and capacity.

New Antenna Tech. Innovations in antenna technology and designhave made it far easier to access high-throughput satellite capacity on the move. Newsatellite antennas are smaller, easier to install andmore powerful than previous generations.

One of the companies leading thesedevelopments is Kymeta, which has designedflat-panel satellite antennas that can beunobtrusively embedded in the roofs of vehicles.They are a radical departure from large, rotatingsatellite dishes. Kymeta’s antennas are software-enabled with no moving parts and usemetamaterial-based holographic beamformingand tracking to automatically acquire and tracksatellite signals while on the move. The antennascan support download speeds of 100 Mbps.

Kymeta recently completed a successful 7,000-mile test drive across the United States in aToyota RAV4 equipped with the flat-panelantenna and steady satellite broadband service.

Mobile Network Integration. Recently adopted cellular network specifications allow better integration between terrestrial and satellite networks. Satellite networks can now interface with mobile operator Evolved Packet Core (EPC) networks to enable seamless roaming between cellular and satellite connectivity. This is crucial for the connected car market because it ensures that cars maintain Internet connectivity when they roam out of coverage, so long as they are equipped with both cellular and satellite modems.

By integrating with the EPC, the satellitenetwork looks like just another access node – i.e.,another base station – to the mobile operator intheir heterogeneous networks (HetNets). Thismakes satellite networks much easier to manageand less complex. The integration also enablesmobile operators to deliver consistent quality ofservice and policies across the terrestrial andsatellite access networks.

In future 5G networks, satellites are likely to beincluded in the overall network architecture aspart of a broad array of access technologies thatwill include WiFi, 2G, 3G, 4G and new 5G.

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HYBRID NETWORKS REV CONNECTED CARS

It’s clear that not one access technology meetsall auto industry requirements for connectedcars, whether it is cellular, WiFi or satellite. But ahybrid approach that blends terrestrial andsatellite networks will enable all players in theconnected car ecosystem to go farther andfaster than what they can do today. Hybridnetworks can match the benefits of differentdelivery technologies to service requirements:geostationary satellites for global broadcast;LEO satellites for high-throughput, low-latencycommunications where LTE/5G is not available;and LTE/5G for streaming and connectivityservices in urban areas.

The hybrid approach will address the challengesof global reach, consistent reliability and costefficiency in delivering connected car services.

• Next-gen HTS systems match or exceed4G LTE network throughput performanceand are globally available to 99% of theworld’s landmass.

• Deeper integration with the EPC allowsseamless handovers between terrestrialand satellite networks for consistentnetwork quality and reliability when carsroam in and out of cellular coverage.

• New antenna technology with innovativetracking techniques ensure vehicles onthe move maintain satellite connectivityanywhere in the world.

Furthermore, the broadcast and multicastcapabilities of satellite are the most efficient wayto deliver large amounts of IP content and data totens of thousands of vehicles in a country ormillions of vehicles globally. When an auto OEMneeds to resolve a software-related recallproblem, the bug fix can be simultaneouslymulticast via satellite and guaranteed to reach allthe affected vehicles wherever they are located. Incontrast, transmitting software updates overcellular connections requires a dedicated channelfor the update, which is an inefficient use of

valuable spectrum and takes capacity away fromother revenue-generating services like consumermobile broadband. Cellular networks were notinherently designed for broadcast applications.

Likewise, satellite broadcast is also the mostcost-effective method for distributingentertainment content nationally or globally.Using a single broadcast channel, popularentertainment content or mission-criticalsoftware updates can be transmitted to millionsof vehicles, IoT devices or cell towers.

The global reach of satellite networks alsoensures that satellite-connected vehicles alwayshave access to two-way communications evenwhen on the move.

Satellite adds value to mobile operatorconnected car offerings by creating hybridnetworks that guarantee global reach andimprove the cost efficiency of content deliveryto data-hungry vehicles.

Solutions are available today that support next-gen satellite services that will enable hybrid networks for connected cars.

CONCLUSION

Mobile operators don’t have to wait for 5G to accelerateconnected car service revenues. While 5G promises faster dataspeeds and new architectures that are better suited to IoTapplications, solutions exist today that extend the reach ofconnected car services and provide more cost-efficient contentdelivery. By leveraging the ubiquitous coverage and broadcastcapabilities of satellite networks, mobile operators can overcomethe challenges of delivering data-intensive content to vehicleson the move anywhere in the world. There is no one-size networkthat fits all for connected cars. Hybrid networks blend the bestof terrestrial and satellite features and will take connected carservices farther and faster than what’s possible today.

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