MWC2024: To MNO or MVNO?
There was a time when the annual Mobile World Congress (MWC) conference in Barcelona verged on becoming an automotive show. Multiple auto makers were present and exhibiting as were several Tier 1 suppliers.
That is no longer the case. MWC is definitely a forum for the consideration of automotive connectivity, but you won't find too many cars - with the possible exception, this year, of Xiaomi, stealing the spotlight with its sexy SU7 SUV.
The real car-centric business of MWC, though, lies in the nitty gritty of connecting cars from factories to ports to dealerships and in the wild. This is looking like increasingly lucrative business - at least for those organizations that have ... "figured it out."
For auto makers, the decision ultimately comes down to whether to partner directly with a wireless carrier like an AT&T or a Vodafone or a KDDI, or to make a deal with a mobile VIRTUAL network operator that can "manage" the carrier relationships. While many car makers have opted to partner with a single large carrier to manage their global connections and wireless carrier relationships, there is no single, universal solution to this challenge.
In that context, one of the biggest announcements emanating from MWC2024, was the Day 1 announcement by Verizon that it would be partnering with KDDI to provide connectivity for the widely anticipated Sony Afeela - showcased at two consecutive Consumer Electronic Shows and poised to shake up the electric vehicle market. Afeela is a brand of Sony Honda Mobility (SHM), and is intended to redefine the driving experience.
Verizon and KDDI jointly announced the collaboration. The Afeela is intended to be the first mass-produced electric vehicle in the U.S. using Verizon's 5G and 4G LTE networks along with KDDI's Global Communications platform. The new car is scheduled to be launched in 2025, with deliveries starting in North America in the spring of 2026.
Sony Honda Mobility was established by Sony Group and Honda for the joint development and sale of high-value-added electric vehicles - the companies state - along with the provision of services for mobility. Sony says:
“Through our EV and services brand, AFEELA, we pursue mobility as a creative entertainment space, with hardware befitting a premium brand and AD/ADAS utilizing AI. To achieve this, consistent connectivity of vehicles to networks is crucial, and unprecedented high-throughput, low-latency wireless networking is essential. We are excited about the strong partnership between KDDI and Verizon toward delivering high-quality products and services for the connected car in the U.S.," said Kojiro Okabe, Director and Executive Vice President, Sony Honda Mobility Inc.
The announcement is important for KDDI as the company recently took on connectivity responsibility for BMW in North America. The announcement is important for Verizon, because BMW in North America recently reprovisioned its T-Mobile connected vehicles to the Verizon network - joining Volkswagen and Audi vehicles.
The announcement is important from the perspective of Softbank, which is an investment partner with Honda but is also an investor in MVNO Cubic Telecom. The fact that Honda has opted to confer connectivity responsibility to KDDI instead of an MVNO partner is a significant statement - especially coming on day one of MWC 2024.
Competing carriers and MVNOs - like Cubic, Transatel, Aeris, Airnity, Tata, and others will be watching the Honda Afeela project closely. The choice of working directly with a large MNO - like Vodafone or AT&T - versus partnering with an MVNO remains a controversial and fraught proposition in the connected car market. Honda's endorsement of the KDDI and Verizon partnership is a very big deal indeed - especially as the automotive industry prepares for satellite connectivity, private 5G, and non-terrestrial network connections.