Telematic Future: eCall, Insurance, Drive-Share

January 1, 2012  - By

By Moni Malek

Consider two notable developments in 2011 that will influence the development of consumer transportation:

  • China became the largest manufacturer of automobiles, producing more than 18 million vehicles, easily overtaking Europe and North America.
  • Smartphone volume shipments surpassed the volume of laptops and desktop PCs combined.

Reflecting these two rising economic rockets, the November Munich Telematics show drew its largest attendance yet, 500-plus participants, and a greatly expanded exhibit area.

The rising dominance of smartphones — one participant observed that they are taking over the world —will have a big impact on how users expect to access or view their telematics data; that is, any wireless information accessed by them while in their car. Developers and manufactures used to have a problem regarding which system to support, but with Android now at more than 50 percent of smartphones share, it is becoming the de facto first-choice standard and will probably become the user interface model.

eCall. Also in 2011, the European Union finally mandated eCall, the emergency call system in automobiles that sends vehicle position to emergency services after a crash. Unfortunately, the mandate is for 2015. I guess this gives them a chance to use the European satnav system Galileo, which hopefully may have something to offer hopefully by then.

This year the Russians leapfrogged the Western Europeans and mandated their own version of eCall, known as ERA, for 2013. It will use GLONASS, the Russian satnav system, which unlike Galileo is operational now. Of course, GPS is still employed, and the real benefit today is using GLONASS plus GPS in a multi-constellation fix mode for higher reliability especially in urban areas compared to GPS alone.

Malek-1A . Credit: Moni Malek
Malek-2B . Credit: Moni Malek

Emergency call in progress, triggered by SOS button in PSA Peugeot Citroen’s roof panel (bottom photo).

At the Munich Telematics show it was clear that the Russian mandate has put wind into the telematics emergency call market’s sails. From the Russian company Cesar’s presentation, we learned that following road accidents in Russia, 14 percent of car occupants die, compared to 2 percent in the United States. Getting emergency support to the scene more quickly is critical to reducing fatalities, and on this basis Russia has got some catching up to do.

You would think that everyone would be rushing to get more safety, and as one market research presenter said, it comes high on the user wish list. Another presenter stated that while people may desire it, they seem reluctant to pay for it at first. As an historical example, initially when people had the option of paying for airbags as an extra, it was practically never taken as an option. Now it is standard in all cars for drivers and passengers.Think about it — would you now buy a car without an airbag?

PSA Peugeot Citroen, the big French car company, shows the way with a version of eCall in their cars that doesn’t lose money! There is a big debate about who gets called when a crash happens. Is it the public service access points (PSAPs) or third-party services (TPS). Peugeot favours the TPS model, which can filter the more common breakdown and false alarms from true crash calls to be forwarded to the emergency services at PSAPs. While eCall initially favoured PSAP, the trend seems to support Peugeot’s decision and TPS.

The PSA eCall also does not support the so-called in-band modem, which allows crash-position data to be sent over a voice call on the eCall box by encoding the data into a speech-like signal. The modem theory is, you need to keep the voice call open to keep talking to the person in the automobile. According to PSA, apart from the issue of patents with the in-band modem, it seems that 30 percent of the data is lost, and 40 percent of the PSAPs in Germany cannot handle it.

GPRS is the best way of sending crash-position data with SMS text message as a back-up. As for voice, most people get out of their car after an accident and do not speak on the eCall box. I guess if people are unconscious and are not able to get out of the car, they won’t speak either.

While smartphones dominate in many areas, they have been ruled out for eCall safety apps in cars, as no one can guarantee a smartphone will work after an accident. As for crash detection, that can only work if a device is bolted down to the car frame. Only that way can you sense the high-G forces during a crash.

Insurance. Until the mandates kick in for eCall/ERA, you can understand why an automobile manufacturer’s marketing imagery does not include one of their car crashing or breaking down. So selling the eCall feature in this mindset is hard. On the other side are guys that do have the image of helping you after a crash: the insurance companies. And true to form, the big business has become insurance telematics.

Octo Telematics has taken a pole position in this area and had an impressive crashing-car demo that you could sit in at the show. The insurance telematics box then becomes an aftermarket product that is cross-subsidized by the insurance company. In return they receive crash data and get to monitor you to help you improve driving habits to reduce crashes.

Malek-2 . Credit: Moni Malek
Octo Telematics crash simulator. Show attendees were taken for a ride! The telematics box sends crash data to the insurance company to help drivers improve driving habits.

A last word on safety: most accidents now seem to occur when people are texting while driving. Apparently when the Blackberry message service was down for three days in Dubai, there were 20 percent fewer accidents.

Apart from eCall and insurance telematics, the other famous perennial telematic application is the connected car. As we all expected, we saw a lot of presentations on this. In simple terms, via telematics, a car is connected to the Internet. As the definition of telematics The branch of information technology that deals with long-distance transmission of computerized information, this might seem a no-brainer. But exactly how the car is connected and what value that offers constitute the two key questions for any application and market segment. Today a car buyer will almost certainly be an internet user.

How Is It Connected? For basic telematic apps like eCall and stolen vehicle recovery, it suffices to connect to the 2G GSM/GPRS wireless network that gives worldwide coverage. Operators like Telenor offer a so called global subscriber identity module (SIM) model that supports worldwide access at a price that makes business real.

For the so-called infotainment connectivity, the trend is 4G LTE, which offers the high data rates that the car companies dream about and flat-rate smartphone users expect. LTE is a packet mobile phone network already at Verizon and in European trial that is ideal for data. It appears that in the future, the best mobile phone network will be a combo of 4G LTE for infotainment data with 2G GSM for speech and 2G GPRS for global coverage telematic data.

What Value Does It Offer? The blanket answer is, unless it offers a useful service, it won’t really be used. Today most connected car services drop to a poor 10–20 percent retention after the free trial period. The key is really to look for helpful services. For instance, the connected heater or rather the ability to switch your car heater remotely on in cold winters of Sweden increased Volvo connected usage 50 percent. Saving fuel in this energy conscious low CO2 emission days would seem a useful application. Couple that with a connected car, traffic information, best routes, good driving-habit rewards, social network to let you post your good driving score, and ….

Fiat showed its eco:Drive solution, helping people save 6 percent on fuel consumption on average. That’s a start.

At the end of the day, more efficient cars are the answer to that. Getting people to use more efficient small cars for short trips is one of the ideas behind the BMW car-sharing model. Based on the BMW One series and the Minis made by BMW, it offers a service in Munich and Berlin (I have to admit I live in Munich and haven’t tried it yet). When you register, you present your driving license and the service add an RFID. You can use this RFID as a keyless entry into a car share. Of course the cars are connected, and a smartphone app helps you find the next free car. You can pick it up and drop it off where you want. Because they are new, more efficient small cars than your average old gas guzzler, they have done a deal to get free parking in town. It costs a flat 29 cents (Euro cents) per minute to drive, which includes the fuel price. I can remember when a mobile phone call cost that much before!


Moni Malek is CEO of ML-C MobileLocation-Company GmbH, based in Munich, Germany.