Commercial Vehicle Telematics - Telematics Update

July 2005 Issue 32 

Asset Tracking 

From trailers to electricity meters, 

find out what TSPs are looking at 

Detroit 2005 

Feedback from the movers and shakers 

of the consumer telematics industry 

Commercial Vehicle Telematics 

Being a credible service provider in the face of the 

growing adoption rate 

AZMAT tracking in Singapore 

Free news and analysis at www.telematicsupdate.com 

Plus new M2M Section: Telematics Update expands its horizon and look beyond the telematics 

vertical. In this issue, Automatic Meter Reading in the US and T-Mobile interviewed in the UK

Issue 32 

EDITOR-IN-CHIEF 

Thomas Hallauer 

thomas@telematicsupdate.com 

1 800 814 3459 extn 307 

+44 (0)20 7375 7185 

CO-EDITORS 

Anita Yaa Agyeman 

anita@telematicsupdate.com 

+44 (0)20 7375 7196 

Louise Clark 

louise@telematicsupdate.com 

+44 (0)207 375 7199 

Asif Naqvi 

asif@telematicsupdate.com 

+44 207 375 7568 

DESIGN 

Alex Chilton 

alex@alex-chilton.co.uk 

+44 (0)20 7736 5568 

Telematics Update Magazine is published 

quarterly. It is a division of First 

Conferences Ltd, 7-9 Fashion Street, 

London E1 6PX, UK. 

www.telematicsupdate.com 

© Copyright 2005 First Conferences Ltd. All rights 

reserved. www.firstconf.com/firstconf/legal_notice.html. 

This document contains original material which is 

protected by copyright. No unauthorised use of material 

herein may be made without the prior consent of First 

Conferences Ltd. Telematics Update Magazine and 

eyeforauto are proprietary creations and trademarks 

of First Conferences Ltd. Please note the views of the 

contributors in this publication are their own and not 

those of Telematics Update Magazine or EyeForAuto. 

Contents 

News 

4 News in Brief 

8 This month’s new products 

US Focus 

10 Strategy Analytics review Detroit 

European Focus 

15 SBD analyses UK and European market developments in 

Contents 

stolen vehicle tracking systems and consider the challenges 

for telematics-based OE solutions. 

16 Technology for tracking trailers is moving forward quickly, but 

there is a lack of awareness in the market about what is 

available. Steve Rogerson reports. 

17 The commercial vehicle world is finally adopting telematics so 

why is everybody so on edge? Steve Rogerson reports from 

April’s Commercial Vehicle Telematics UK conference in 

Birmingham. 

21 Find a credible Telematics Service Provider; Brian Martin identifies 

the areas both UK Buyers and Partners are scrutinising 

Asian focus 

23 From Singapore, Sandy Borthwick addresses the factors 

involved when establishing a comprehensive tracking system 

for vehicles carrying Hazmat 

25 Karen Tan Siok Hui analyses the Malaysian market for 

Commercial Vehicle Telematics where 2005 is expected 

to be a boom year after going through a phase of heavy 

market education. 

NEW M2M Section 

27 Resident Analyst Bernie Hearne can’t get enough of AMR, read 

the first of her two-part insight into the Automatic Meter 

Reading market and case studies 

29 TU’s Thomas Hallauer interviews T-Mobile in the UK. Rob Price 

tells us why T-Mobile is the last UK operator to focus on M2M 

opportunities 

ISSUE 30 DECEMBER 2004 • TELEMATICS UPDATE 

3

News in Brief 

News in brief WORLD ➠ US ➠ EUROPE ➠ ASIA 

Europe Delay the digital 

tachograph, industry warns 

Several road transport associations 

have urged the European Commission 

to recognise that most EU member 

states will not make the 5 August 2005 

deadline for the introduction of digital 

tachographs, and have asked for the 

mandatory introduction to be delayed 

or declared voluntary. 

America Sirius now available on 

select Lexus and Toyota vehicles 

Toyota is now offering fully integrated 

Sirius hardware with digital sound 

quality as a post-production (prior to 

dealership delivery) or dealer-installed 

option the following models: 

2005 Lexus LS430 and ES330 

2006 Lexus LX470 

2006 Toyota Land Cruiser 

2005 Toyota Camry 

2005 and 2006 Toyota Solara and 

Solara Convertible 

2005 Scion xA, Scion xB 

2005 and 2006 Scion tC 

This follows the recent agreement that 

extends Sirius’ exclusive relationship 

with Ford through to September 2011, 

with an option for Ford to extend the 

agreement for a further two-years. 

All Ford Motor Co brands in the US 

4 TELEMATICS UPDATE • ISSUE 32 JULY 2005 

Under the regulation, all new commercial 

vehicles above 3.5 tonnes are to be 

equipped with digital tachographs that 

record speed, distance travelled, duration 

of journeys, and ‘stop and go’ 

times of trucks and buses. 

While the IRU appreciates that the 

ultimate aim of the regulation is to 

improve road 

safety, making 

the tachographobligatory 

before 

the authorities 

are ready 

to administer 

and enforce 

– Ford, Lincoln Mercury, Land Rover, 

Jaguar, Volvo, Aston Martin and Mazda 

– are covered by the agreement. 

Earlier this year, Ford and Lincoln 

Mercury announced plans to target up 

to 21 vehicle lines for factory installation 

of SIRIUS over the 2006 and 2007 

model years, and announced that they 

expect to generate 

up to one million 

SIRIUS subscribers 

over the two model 

year period. 

In total, nearly 

90% of Ford and 

Lincoln Mercury 

vehicles will have 

SIRIUS as a factory 

installed option for 

the 2008 model 

year. Land Rover 

plans to offer SIRIUS 

as a factory-installed 

it will only jeopardise respect for the 

rule of law and road safety. 

According to International Road 

Transport Union national Member 

Associations and other partner organisations, 

the situation amongst EU 

Member States on 5 August 2005 is 

likely to be: 

National Legislation: 

12 out of 25 not ready 

Tachograph Cards: 


Workshop Authorisation: 


Enforcement: 


option on select vehicle lines, beginning 

with the 2006 model year. Volvo, 

Jaguar and Mazda currently offer 

SIRIUS as a dealer-installed option, 

with future plans to offer SIRIUS as a 

factory-installed option and/or as an 

option installed as overseas vehicles 

enter US ports.

World Wavetrend enters into strategic partnership with 

OxLoc 

OxLoc has recently entered into a commercial arrangement with 

Wavetrend to integrate its GPS standalone tracking technology 

with Wavetrend Active tags and receivers. 

OxLoc’s latest version of the battery-powered Asset Alert Solution 

will operate for periods of up to three years, reporting information 

twice per day. 

While conventional telematics solutions reporting position and 

condition are not new, the hardware solutions currently available 

require access to an ‘always 

on’ power source, 

which is not always 

available. 

Through 

this new partnership, 

a 

derivative 

of this system 

will soon be available 

to gather consignment information 

from tagged goods inside 

containers and trailers using Wavetrend 

Active Tag Technology. 

Powerless trailers or containers, which can sometimes sit at 

docks or ports, would be a typical example of where Wavetrend 

and OxLoc intend to deploy their combined technologies. “The 

Active Wavetrend Tags, which are ultra long range, last in excess of 

three years and in some cases up to ten years, with clever 

autonomous battery management,” said Keith Dobson, CEO of 

OxLoc. “Consignment data as well as the ‘true’ GPS position will 

be sent back to a selected point from virtually anywhere in the 

world.” 

News in Brief 

World Portable navigation hitting dead-end, says 

Strategy Analytics 

According to a new Strategy Analytics study – ‘In-vehicle 

Telematics Systems Market 2004-2011’ – portable navigation 

shipments that built rapidly to one million units in 

2004 will double, and even triple in some regions, during 

2005. 

The growth of in-vehicle markets, however, is barely 

noticeable, reaching 1.3 million units in North America, 2.2 

million units in Europe and 4 million units in Japan, across 

original equipment and the aftermarket in 2005. 

“Strong navigation growth can only be maintained over 

the longer term if navigation capabilities are linked more 

closely to road traffic information, speed camera locations, 

entertainment, communications and other ‘customisable’ 

consumer features,” says Joanne Blight, Director, Automotive 

Practice. “At a lower price, in-vehicle navigation can be 

far better positioned to capture a bigger market. There are 

significant safety benefits if navigation is integrated with 

other in-vehicle features using a good human machine 

interface (HMI). The wireless market is increasingly offering 

more and more multi-featured products, and there also is a 

clear role for navigation, traffic information and other travel 

related functions in their features list.” 

Asia Clarion and Hitachi to co-develop car 

navigation systems 

Hitachi and Clarion have announced that they have 

agreed to strengthen their existing co-operative relationship 

and will develop competitive products including car 

navigation systems with the aim of introducing them in 

2008. 

In order to use development resources efficiently, 

they have assembled researchers from both companies as 

well as Xanavi Informatics, Hitachi’s wholly owned 

subsidiary in the Car Information Systems business. 

The combining of resources is expected to curb R&D 

costs, and enable both companies to hold their own 

against competitors in the car navigation market. 

Hitachi is Japan’s largest electronics conglomerate, 

targeting automotive electronics as one of its key growth 

areas. According to Reuters, Hitachi aims to double sales 

in its automotive systems division to ¥1 trillion ($9.25 

billion) by the year ending in March 2011. 

Hitachi and Clarion began collaborating in car navigation 

in 2000 when they established a joint venture called 

HCX Corp, and last year Hitachi acquired a 14.5% stake 

in Clarion. 

ISSUE 32 JULY 2005 • TELEMATICS UPDATE 

5

News in Brief 

News in brief WORLD ➠ US ➠ EUROPE ➠ ASIA 

World CPS and SiGe Semiconductor to deliver E-GPS mobile location 

technology 

Cambridge Positioning Systems and SiGe Semiconductor have signed an agreement 

to develop E-GPS “high accuracy everywhere” mobile location technology. 

Under the agreement, the companies will deliver an E-GPS module that 

combines SiGe Semiconductor’s SE8901L GPS receiver IC with CPS’s softwareonly 

Matrix technology. 

The complete system will enable manufacturers of GSM and 3G handsets and 

network operators to deliver fast and reliable, high-accuracy location fixes in all 

environments – including indoor and dense urban areas where GPS by itself struggles 

to perform. 

Initial testing in central London has demonstrated the major benefit of 

combining Matrix with GPS to provide a robust, fast and accurate all-area positioning 

system. As well as consistent sub-100m accuracy, the results highlighted the 

ability of E-GPS to deliver location requests 97% of the time, and first fixes across 

the test area within just ten seconds. 

America QinetiQ to provide US DoD with super-fast GPS 

The US Department of Defence has awarded a contract to QinetiQ to provide 

super-fast satellite acquisition GPS to the Joint Advanced Missile Instrumentation 

(JAMI) program. 

Worth around $1m, with the potential to increase to $10m, the contract requires 

that QinetiQ take existing software developed by the US DoD and incorporate it into 

an improved production product designed by QinetiQ. 

Known as the GSU (GPS Sensor Unit), the new product will complement 

QinetiQ’s existing Q20 GPS compact system, which requires no visible antenna and 

can be fitted to any moveable asset. 

The Q20 can report location and movement and can be used to track equipment, 

machines and people in environments where conventional GPS either fails or takes 

too long to produce a location fix. 

The GSU’s main feature is its ability to locate and track four satellites in less than 

three seconds in missiles that can pull as much as 50G’s during manoeuvres. Previously 

it was impossible to track a missile using GPS in its early stages of flight. 

The GSU platform replaces an expensive system, which uses radar to track 

missiles. Positioned inside a missile, the GSU tracks the flight path with pinpoint 

accuracy, providing a warning within just a few seconds to ground crew should a 

missile deviate from its course. 


America Bulldog Technologies 

partners with Satamatics 

Bulldog Technologies has signed a 

Resellers Agreement with Satamatics, a 

satellite data services provider that 

operates the Inmarsat D+ global satellite 

communication service. 

Satamatics’ technology provides 

Bulldog’s customers with a global satellite-based 

tracking and monitoring 

capability in conjunction with Bulldog’s 

security applications. 

Bulldog’s solutions allow 

dispatchers, security personnel, law 

enforcement and loss prevention 

professionals, emergency response 

teams and cargo transport drivers to 

monitor, track and secure valuable 

assets/cargo during the transport, 

storage and delivery supply chain 

process. 

Satamatics provides low data rate 

satellite-based, mobile messaging and 

telematics services to track, monitor and 

control remote assets across land, sea 

and air, or at fixed-site remote locations. 

Under the agreement, Satamatics' 

bellwether product offering, SAT101, 

will be integrated and sold with two of 

Bulldog’s applications; 

1) RoadBOSS, a portable seal/sensor 

used for monitoring trailers and 

intermodal containers at any time 

during the supply chain and delivery 

process; and 

2) Tanker BOSS, an electronic security 

solution that monitors internal 

fluid levels and ingress and egress 

points on tanker trucks.

World Tele Atlas and TomTom extend global agreement to 2007 

Tele Atlas and TomTom have jointly announced the extension of their technology and 

distribution agreement through to the end of 2007. The agreement is an extension 

of a master agreement in place between the companies since 1997. 

Under the agreement, Tele Atlas will remain the key provider of digital maps and 

other content such as POIs to TomTom for use in the TomTom GO, TomTom Navigator 

and TomTom Mobile platforms throughout Western Europe and North America. 

“TomTom and Tele Atlas have been close partners since the mid-1990’s, when the 

entire personal navigation category was highly speculative and in its formative 

stages,” said Alain De Taeye, Tele Atlas Founder & CEO. 

During those years, Tele Atlas has been TomTom’s digital map and geographic 

content partner. “In order to become successful in a new market, one needs much 

more than great technology,” commented Harold Goddijn, TomTom’s CEO. “We 

have worked closely with Tele Atlas over the years as our digital map and 

geographic content partner, and we continue to work with them in distribution 

channel development and in building strong business relationships in all our 

major markets.” 

News in Brief 

America ODOT to launch road user 

charging pilot program 

The Oregon DOT will pre-pilot a road 

user charging system during the fall of 

2005, equipping the cars of twenty 

volunteers with GPS units and on-board 

mileage-counters. 

Following the pre-pilot, a one-year 

pilot program will begin in spring 2006, 

using 280 volunteers in Portland. For a 

period of one year, the volunteers will 

pay a road user fee equal to 1.2c per 

mile, but will not pay the gas tax. 

The volunteers will fill their tanks at 

service stations equipped with mileage 

reader devices, which will communicate 

with the on-board mileage counter. 

When the purchase is totalled, the gas 

tax will automatically be deducted and 

the road user fee will be added. 

The federally funded pilot is required 

to test the ability to count separately 

miles travelled during peak hours within 

a congested area. Some of the pilot 

volunteers will be in a ‘rush hour’ pricing 

group to test this concept. 

Because the pilot is a test, many 

policy options remain for decision 

makers, such as charging a lower rateper-mile 

for vehicles that achieve a 

certain fuel efficiency, for motorists that 

avoid rush hour zones, or for those 

participating in other environmentallyfriendly 

situations. 

Based on the results of the pilot 

program, ODOT will draft model legislation 

for the Oregon State Legislature 

to consider, beginning in 2009. 

World Tele Atlas-Wayfinder collaboration targets the global wireless market 

Tele Atlas and Wayfinder Systems have solidified their growing European and North American partnership through an expanding 

collaboration designed to extend navigation solutions in the global wireless market. 

Following its successful launch in Europe, the United States is to get the latest version of Wayfinder Navigator this month. 

Wayfinder will also launch a full navigation product for Java-enabled mobile phones in October 2005, with functionality equal to that 

on Symbian-based phones. These new systems will also rely on Tele Atlas maps. 

The Tele Atlas-Wayfinder partnership continues to offer increasing choice for wireless subscribers worldwide. For instance, 

Wayfinder’s Navigator application is bundled with the Nokia Wireless Bluetooth GPS Module, as well as with Nokia mobile phones 

employing the Series 60 Symbian OS. 

Austrian carrier A1 is offering Wayfinder navigation to all of its subscribers on a daily or monthly basis. 

Wayfinder offers a branded route navigation service through a relationship with Telefonica in Spain. 


7

News in Brief 

World SiRF acquires Motorola's GPS chip set product lines 

SiRF Technology has acquired Motorola’s GPS chip set product lines, and also the 

rights to some of Motorola’s chip set products currently under development. 

As part of the agreement, SiRF also has become a preferred GPS technology 

supplier to Motorola. 

SiRF will integrate into its product portfolio Motorola's existing GPS chip set products, 

including the MG2000 used in telematics applications and the MG4x00 (Instant 

GPS) used in cellular handsets and for public safety two-way radio designers across 

a range of mobile platforms. 

SiRF is focused on providing GPS enabled location technology for high-volume 

mobile consumer devices and commercial applications, including automobile navigation 

and Telematics systems, mobile phones, mobile consumer devices and PDAs. 

“The opportunity to acquire a team with a critical mass of GPS expertise, product 

lines that complement our existing products, and a very strong customer base were 

decisive factors in making this transaction,” said Dr Michael Canning, President & 

CEO of SiRF. 

New products and services 

New products Bell Mobility launches low-cost remote tracking system for 

small and medium sized business 

Bell Mobility has launched GoTrax, Canada’s first ever handset-based technology that 

allows resources to be tracked in places where traditional GPS signals don’t work. 

GoTrax uses wireless handsets and the Internet that are quickly adaptable by 

users. It gives users unlimited ability to locate individual or multiple assets such as 

vehicles, packages and individuals, issue proximity alerts, maintain daily interactive 

activity logs, and run detailed reports from one or multiple locations. 

GoTrax also sets a new standard for location-based privacy with necessary pass codes 

and mandatory permission requirements that puts the customer in control of privacy. 

New products CSI’s Hemisphere GPS develops chipset and new Crescent 

receiver technology 

After years of development, Hemisphere GPS has introduced its own applicationspecific 

integrated circuit (ASIC) chipset technology, which will play a key role in a 

receiver product line that Hemisphere GPS is launching under its new Crescent 

brand name. 

Crescent receivers will deliver higher update rates, noise-reduced raw measurements, 

more memory and higher processor capability, to enable more advanced 

applications and sophisticated configurations. 


New products Navicom begins 

manufacturing new GPS unit 

Navicom’s new Navitraq V GPS unit is 

already in production, and the company 

aims to produce 1,500 units for delivery 

in August. 

Navicom expects to sell 1,000 GPS 

units per month once launched. 

New services Telcontar partner 

Appello launches WISEPILOT with 

TeliaSonera 

TeliaSonera will be offering Appello’s 

WISEPILOT mobile navigation service to 

its customers, turning their mobile phones 

into advanced navigation devices with upto-date 

map and travel information. 

WISEPILOT uses an “off-board” DDS 

server from Telcontar to deliver maps, 

driving directions and information on 

local points of interest and businesses 

directly to Java enabled phones on the 

TeliaSonera network. 

“The demand for navigation has been 

very strong in Europe,” said Leif Sundström, 

CEO of Appello. “WISEPILOT 

delivers this application directly to your 

phone, meeting a price point not available 

with a stand-alone navigation 

device.” 

New business Datatrak Online gets a 

Facelift 

Facelift GB Limited, a country-wide 

provider of powered access equipment 

rental services, is equipping its fleet with 

Datatrak Online in a rolling program 

which will ultimately see all the 

company's 300 aerial platform vehicles 

fitted with the system. 

According to Operations Director, 

Frank Page, the system allows Facelift BG 

to monitor and manage a wide range of 

parameters related to the operation of its 

fleet. Apart from being able to pinpoint 

the precise location of its vehicles, the 

usage reports enable Facelft GB to verify 

the hours logged by out-based operators 

and to confirm machine idle time.

Opinion: New after theft standards…new confusions 

June 2005 saw the press release by Thatcham of the yet to be defined new category 

Cat6. So what does this mean for the after theft tracking industry, and the 

Cat5 standard that was recently launched September of 2004? 

When TU asked for opinions from those selling or installing after theft tracking 

devices, about this new category, the following views were aired: 

“This seems to be another “nail in the coffin” (or several) for Cat5 certainly it 

spreads nothing but confusion in both our industry as well as other allied industries 

as to what is going on.” 

“Before we start looking at Cat6 consultations, we need a statement from 

Thatcham as to exactly what has happened to Cat5.” 

We all recognise the importance of producing a solid criteria that would clearly 

differentiate the simply GPS devices from the higher spec track and trace systems. 

So the launch of Cat5 was a sign that the industry not only had a clearly defined 

goal to aim for, but one that would improve both the supplier and industry credibility, 

but a criteria without longevity or the full backing of the insurance world, 

is meaningless. 

Perhaps it should not be down to organisations like Thatcham to define the 

way forward. Their working groups have been a great asset to the industry, but 

the lack of take up by the very insurance companies that fund Thatcham to 

enforce new standards, has been disappointing. 

New business Three commercial 

truck fleets specify Iteris lane 

departure warning systems on 

new truck purchases 

Iteris’ Lane Departure Warning system, 

the first product of its kind to be available 

on commercial trucks in the US 

and Europe, will now be installed on 

new trucks purchased by three US 

commercial truck fleets. 

Conover, North Carolina-based Piedmont 

Express; Myrtle Beach, South 

Carolina-based New South Companies 

Inc, and another large national fleet 

have all purchased new trucks from 

Freightliner with specifications that 

include the installation of Iteris' LDW 

system. 

The addition of Iteris' LDW system in 

these three fleets brings the total 

number of fleets using Iteris' LDW 

system to 12 nationwide with 35 companies 

currently conducting field tests. 

The technology is currently in use 

on over 10,000 commercial trucks in 

the US and Europe, with more than a 

billion kilometres travelled. 

New partnership Audible and 

XM Satellite Radio sign exclusive 

agreement 

Audible, Inc. and XM Satellite Radio have 

signed an exclusive technology, 

marketing and content agreement, in 

terms of which each will prominently comarket 

the other’s service. In 2006, 

Audible and XM will introduce the first 

portable, handheld satellite radio 

devices that are capable of playing both 

the XM service as well as Audible's 

spoken-word content, which can be 

downloaded from the Web into the 

devices' memory. Audible will offer 

popular XM talk programs via the 

Audible Web site this year, and both 

companies will co-produce a new 

Audible audiobook program for broadcast 

on XM Satellite Radio, that will also 

be offered for download at Audible.com. 

News in Brief 

New services GM’s OnStar to offer 

TTY help line for the deaf, hard of 

hearing or speech impaired 

General Motors of Canada is offering a 

toll-free text telephone (TTY) help line 

through its OnStar subsidiary, for 

subscribers who are deaf, hard of 

hearing, or speech impaired (and other 

TTY users). 

The toll-free TTY phone number, 1- 

877-248-2080, enables direct communication 

between TTY users and the 

OnStar call centre through a text telephone 

device that plugs into a landline 

or cell phone. 

OnStar subscribers can contact an 

OnStar advisor for stolen vehicle location 

assistance, remote door unlocks, 

remote lights and horn, and customer 

care issues. The OnStar subscriber's 

TTY will transmit text directly to a live 

OnStar advisor who is trained in the use 

of TTY devices and available 24/7. 

Customer care issues will be handled 

from 06h00 to 13h00 EDT. 

New products Qualcomm 

announces next-generation 

FleetAdvisor® management 

solution 

Qualcomm has launched FleetAdvisor 

versions 6.2 and 6.2.3, both of which 

provide customers with a near real-time 

connection between their back office – 

including management, dispatchers 

and customer service representatives – 

and their vehicles and drivers. 

Both versions support full-function, 

on-board computing and applications, 

including automated DOT-compliant 

logs, automated arrival and departure 

alerts, and automated state mileage and 

GIS mapping. 

New products DaimlerChrysler demo’s broadband car-to-car communication 

DaimlerChrysler engineers are demonstrating broadband car-to-car communication 

between a Mercedes-Benz E-Class and a Dodge Durango. DaimlerChrysler is the first 

automaker to publicly test this new wireless communications technology. 


9

Analysis 

USA FOCUS 

Bundle the features, bundle the money 

Joanne Blight returns from Detroit and share her notes on the big players feedback 

STRATEGY ANALYTICS HAS LONG 

argued that auto manufacturer 

investment in an ever increasing list 

of potential features for the vehicle 

is unsustainable, and to improve 

the automotive value proposition, 

players need to have a far 

better understanding of consumer 

behaviour both in and out of the 

car. Telematics Detroit 2005 (16th - 

17th May 2005) showed that players 

have become highly focused on the 

growing cost problems surrounding 

technology innovation but are 

still struggling to find the best 

solutions. 


Current Rates of Investment 

in New Vehicle Innovation are 

Not Sustainable 

There is growing competition for OEM 

R&D budget funds between a wide and 

increasing range of automotive technologies. 

In addition to the need to 

invest in technologies intended to 

make their vehicles more competitive 

and desirable, there are other automotive 

investment pressures for OEMs, 

particularly in the areas of advanced 

safety systems, emissions control, and 

other automotive software development. 

Financial pressures will mean 

OEMs will be prevented from investing 

Exhibit 1 

in this wide and ever increasing range 

of in-vehicle technologies. Over the 

next 2-3 years, OEMs need to prioritise 

their product strategies. The automotive 

problem of increasing features 

versus cost is summarised in Exhibit 1. 

Costs will Drive Automotive Players 

to Take a New Approach to 

Features 

According to IBM at Telematics Detroit 

2005, 90% of future vehicle innovations 

will be in electronics and software. 

Similarly, a study by McKinsey 

showed that 80% of all innovations 

driven by electronics. Electric and electronics 

made up 20% of 

vehicle costs in 2003, 

and this is expected to 

reach 80% of costs by 

2015. And across interior, 

engine, chassis and 

body the proportion of 

costs made up by electronics/electrics 

is all 

set to increase. Yet, 10% 

of features account for 

70% of contribution 

margin, and up to 20% 

of features can destroy 

value and reduce 

margin. The study also 

showed that, for many 

new automotive innovations, 

there are major 

differences between a 

drivers awareness of a 

feature versus his/her 

actual use of it. 

So this raises some 

important questions – 

Is all this automotive

investment in new technology features 

actually required by the vehicle buyer? 

And where do the majority of new 

features sit in relation to costs versus 

benefits, and in relations to the various 

consumer segments? 

New Features Also Cause Cost 

Problems at the Point of Sale and 

in Aftersales 

Vehicle optional features are primarily 

used by dealers to support a vehicle 

sale. The higher margins typically available 

to dealers on some optional 

features, provide opportunities to 

reduce the price of the vehicle to a 

customer. This is adding significant 

complexity to cost versus price positioning 

for certain optional extras. 

Warranty costs are now exploding 

because of increasing electronics and 

software failures. Depending on region, 

Exhibit 2 

warranty recalls have increased by 5- 

10% per year over the last 5 years. In a 

Strategy Analytics Dealer Survey of 

2003, across all countries the emergence 

of new automotive technologies 

was, even then, starting to cause 

dealers wide ranging problems. These 

are seen most in the areas of increased 

warranty claims, taking longer to identify 

and solve aftersales problems, at 

and between servicing of the vehicle, 

and in the reliability of some new technologies 

– particularly electrical and 

electronics systems. In the US, a significant 

number of dealers stated that new 

technologies were risking their relationship 

with the customer. 

Solutions will Come in Bitesize 

Bundles 

It was often proposed at the Telematics 

Detroit 2005 conference that automotive 

Analysis 

USA FOCUS 

players should be 

thinking and behaving 

more like they in the 

software business. 

Certainly, from an 

overall strategic business 

perspective this is 

being examined, and it 

will have major change 

management implications 

for automotive 

players. 

In the interim 

however, there are 

some market solutions 

that can be addressed 

here and now. The 

ongoing device vehicle 

interface/integration 

debate was covered in 

detail at Telematics 

Detroit 2005, and will 

result in some well 

targeted market solutions, 

and iPod and 

Bluetooth are early 

examples. 

But overall, invehicle 

product development strategies 

need to be revisited. New product 

strategies need to better identify those 

features and options that to appeal 

most to customers, and focus far less on 

the software and technologies that 

underpin them – as summarised in 

Exhibit 2. This means understanding 

the economics, preferences, and priorities 

of key market segments, and having 

a better understanding of market 

behaviour in those segments. And most 

of all, if costs are to be contained, 

players shouldn’t be afraid to say ‘No’ 

to those features that either cost too 

much or just do not make the grade 

with consumers. ❚ 

The author of this article, Joanne Blight, is 

a Director in Strategy Analytics’ Automotive 

and Telematics Practice and can be 

reached at jblight@strategyanalytics.com 


11

Analysis 

EUROPE FOCUS 

SBD assesses challenges for pan-European 

stolen vehicle tracking systems 

New research from technical consultants SBD analyses UK and European market developments in 

stolen vehicle tracking systems and considers the challenges for telematics-based OE solutions. 

IMPORTANT OPPORTUNITIES AND 

challenges lie ahead in the development 

of stolen vehicle tracking systems, 

but core issues need to be resolved 

among insurers, equipment manufacturers 

and car makers before a 

truly pan-European service can be 

established. 

Specialist telematics and security 

consultants SBD have identified the 

potential for vehicle manufacturers to 

develop OE factory-fit tracking systems 

using the same telematics platform as 

the E (emergency)-call feature the European 

Commission aims to see fitted to 

all new cars from 2009. 

Although in technical terms the use 

of common GPS/GSM telematics functions 

to permit vehicle tracking is 

straightforward, E-call is perceived as a 

safety feature and tracking as a security 

element. In order to include a tracking 

function, manufacturers will have to 

meet the tougher demands from 

insurers in some European countries 

that, for example, such equipment be 

secretly located, have an independent 

back-up power supply and be secure 

against severe attack from thieves. 

These issues also make it more difficult 

for those manufacturers already 

offering a tracking function as part of 

their telematics package – such as Volvo 

and BMW – to upgrade their hardware 

to meet such standards. 

SBD has analysed the development of 

vehicle tracking technology, the products 

available and the differing market 

requirements in the UK and across 

Europe. Its findings, contained in two 

new comprehensive industry reports, 

demonstrate that although the market 

for SVT systems has the potential to 

adopt telematics technology and expand 

on a pan-European basis, there is a 

series of issues that may delay progress. 

Since the early 1990s UK has led 

Europe in terms of public take-up of SVT 

equipment, with sales annually accounting 

for around half the total for the whole 

continent. The bulk of these sales are of 

Tracker, a first-generation SVT system 

that uses a network of radio beacons to 

pick up signals transmitted from stolen 

vehicles and relay them to police vehicles 

fitted with dedicated receivers. 

Although Tracker has remained 

popular and effective, the UK insurance 

industry has drawn up new standards 

for SVT systems through its research 

establishment, Thatcham. Published in 

2004 as the Category 5 criteria, they deal 

specifically with systems using GPS/GSM 

technology with Secure Operating 

Centres (SOCs) to monitor alerts from 

stolen vehicles and forward information 

to the police. These apply to aftermarket 

systems; additional criteria for 

OE systems will follow later this year. 

Thus far, the market for Category 5compliant 

systems has been small and 

insurers continue to accept the installation 

of Tracker, which because of the 

technology it uses, cannot meet Category 

5 standards (Tracker’s manufacturer 

has launched a new GPS/GSM 

product that does meet the criteria). 

Recognising the valid level of security 

provided by non-Category 5 systems, 

such as Tracker and other products that 

hitherto were included on its Q approval 

list, Thatcham recently announced additional 

Category 6 standards. From spring 

2006, insurers will recognise equipment 

covered by Category 6, deemed by 

Thatcham to be suitable for protecting 

mid to low-value vehicles. 

Elsewhere in Europe, only Belgium 

the Netherlands and Norway have 

published insurance industry standards, 

with insurers requiring SVT systems be 

fitted to certain high-value cars 

perceived as high-risk theft targets. In 

France and Italy, informal requirements 

are made by some individual insurers. 

Currently SVT systems are mainly 

purchased as aftermarket, dealer-fit 

items, with manufacturers’ national 

sales and marketing companies 

deciding on a country-by-country basis 

which system to offer to customers. 

With a move to factory-fitted OE equipment 

using a multi-function telematics 

platform for pan-European operation, 

manufacturers will need to address a 

cut in profit margins and the potential 

higher cost to the motorist. 

SBD concludes that volume brands, 

for which SVT is not such an important 

insurance consideration, are more 

likely to develop stand-alone SVT 

systems, with premium manufacturers 

focusing on multi-function telematics 

systems that support a range of services, 

including SVT. ❚ 

More information at www.sbd.co.uk 


13

Commercial Commercial Vehicle Vehicle 

Telematics Telematics USA 

USA 

October 10-11, McCormick Place, Chicago 

Translate Potential into Profits: 

Strategies to exploit the commercial vehicle 

telematics and mobile workers market 

Tapping into the potential for CVT and the explosion 

in portable device uptake for mobile workers 

Get registered 

today! Quote 

'TUMag' online 

and receive a 

$300 discount 

Speakers include: 

2005 

Back 

for 

the 4th 

successful year! 

Visit www.telematicsupdate.com/cvtusa

Keeping tabs on trailers 

Analysis 

EUROPE FOCUS 

The technology for tracking trailers is moving forward quickly, but there is a lack of awareness 

in the market about what is available. Steve Rogerson reports. 

LARGE FLEETS STRUGGLING TO 

keep track of all their trailers and any 

size fleet in which the trailers are 

carrying high-value or environmentally 

sensitive goods are creating a demand 

for trailer tracking equipment. But the 

nature of a trailer, the fact that it can go 

for large periods without being 

connected to a power source, is causing 

headaches for designers who want to 

put in the latest equipment but need to 

make it last for days or weeks on battery 

power. 

On top of that, if the primary use is 

security, then the equipment must be 

covert in that a trailer thief would think 

nothing of ripping out a tracking 

system if it helped him or her get away 

with the crime. 

These issues are set to be discussed 

at Transport Tracking 2005 in Gothenburg 

from 5 to 6 October. 

“For trailer tracking, the main issue 

is power,” said Fred Pulver, product 

manager at Cellguide. “Power 

consumption has become critical 

because you can’t assume the trailer is 

always going to be hooked up.” 

Tom O’Connor, Chief Executive of 

Trailers can be tracked from door to door 

Digicore, added: “People have to think 

about power. Has the trailer got power? 

If not, can it get power?” 

Even companies who are using 

trailer tracking for logistical rather than 

security reasons have this problem. 

Typically, a fleet will have more trailers 

than they will have truck units to pull 

them. At any one time, many of the 

trailers could be parked in depots 

across the country. To find where they 

are and their potential availability 

means that the tracking unit should still 

be operational. This means the unit 

must be able to run off small batteries. 

“Trailers can be left for days or weeks 

at depots all over the place,” said 

O’Connor. “And many trailers only have 

power when they are connected.” 

Even making the connection can 

cause problems because such tracking 

systems are so new there is no standard 

coupling with different companies 

using different methods. But given that 

the batteries will only need a trickle 

current to recharge, what is coming 

popular is connecting them to the 

trailer’s lighting circuit. However, if 

they device needs to be linked to a 

telematics system in the cab then 

customers should make sure that the 

two systems are compatible. 

This is fine when the truck unit and 

trailer are owned by the same company, 

but sometimes a trailer will be 

connected to a cab owned by a different 

company. The shortage of common 

standards for telematics systems can 

thus cause difficulties. 

“There is no universal coupling and 

there are so many different types of 

boxes,” said O’Connor. “This is because 

Tom O’Connor: It is an evolving market 

because of changes in technology. 

the industry is in its infancy. There is 

still some way to go and it is an evolving 

market because of changes in technology. 

But one option could be solar 

power, and battery technology is 

moving very fast.” 

Even when it is connected to the 

truck unit, the power management 

demands of modern vehicles are so 

high that designers want all loads to 

draw as small an amount of power as 

possible. 

“People are putting more gadgets in 

the cab, so the whole power management 

thing is becoming an issue,” said 

Pulver. 

Typically, the better tracking systems 

will use some kind of sleep mode to 

power down apart from when they are 

needed. So, for example, a trailer 

parked at a depot does not need to 

send out a signal constantly but can do 

so every hour or couple of hours. Such 

systems can last eight to ten weeks 

without recharging. 

The problem is made worse because 

of the weak signal that the GPS satellites 

issue. That means a powerful tracker is 

needed to detect the signal. This can be 

improved by sensible antenna place- 


15

Analysis 

EUROPE FOCUS 

ment, especially with a metal trailer. 

But the antenna also needs to be secure 

and, if possible, hidden so that trailer 

thieves cannot easily find and destroy it. 

Many trailer tracking companies 

recommend placing the tracking device 

in the floor of the trailer to make it hard 

to find. But the best place for the satellite 

antenna is on the roof, which means 

cabling to link the two. The important 

message is to make sure none of this is 

visible from the ground. And they 

should be fitted with an alert if an 

attempt is made to disconnect them. 

“If you try to sabotage the telematics 

unit, an alert should be sent immediately,” 

said Karl-Heinz Neu, Commercial 

Manager at Cargobull. “You can use an 

error buffer in the GSM unit to send it 

out.” 

The method of communication with 

the logistics centre also affects the 

power consumption. In some parts of 

the world, the GPS system has to be 

used because there is no alternative, 

but with the widespread growth of 

mobile phone networks, this is 

becoming less of an issue. The GPRS 

mobile system, for example, is relatively 

cheap but it is a constant drain on the 

power because it is always on. Some are 

thus opting for text messaging over the 

mobile network where the trailer 

device sends a message at set intervals 

to say where it is. However, on high 

security systems some are opting for 

the GPS for location and communications 

because the GPS signal is harder 

to jam than a mobile phone signal. 

“There are jammers for mobile 

phones on the market that you can 

buy,” said Kimno Lindqvist, Sweden 

Account Manager for Tip Trailer 

Services. “The satellite system is very 

difficult to jam.” 

The use of radio-frequency ID 

(RFID) tags on the goods within the 

trailer gives even more power to a 

trailer tracking system. If all the goods 

are tagged and the trailer equipped to 


read the tags, then 

the logistics centre 

not only know 

where each trailer 

is, but knows exactly 

what goods each 

trailer is carrying at 

any one time. As 

such, it can also 

trace a particular 

pallet to the trailer 

that is holding it. 

“Goods can thus 

be tracked from refrigerated trailers. 

factory to store,” 

said O’Connor. “You can also see when 

goods are unloaded in the wrong place. 

Telematics can help a business re-engineer 

itself. It can fundamentally change 

the way you do business.” 

“The customers’ customers want it 

too,” said Lindqvist. “They want to log 

onto the internet and check the tags to 

see where the goods are.” 

As an added security measure, the 

route a truck follows can be planned in 

advance and the system geared to alert 

the logistic centre should the truck 

stray from that route. 

“If you have high-value goods, you 

need to monitor the transportation very 

well,” said Anders Forssell, Sales and 

Marketing Director at Carmenta. 

“Alerting the call centre if the truck deviates 

from the route helps you safeguard 

against the equipment being stolen.” 

Similarly, a controlled locking system 

can be included that only lets the doors 

be opened at set places on the route 

corresponding to loading and drop-off 

points. 

This kind of monitored tracking is 

quite new but centres do exist operated 

by security companies and some are 

offering the service for other applications. 

As to cost, some insurance companies 

will reduce their premiums if this 

type of security is in place. 

“That on its own can be enough to 

Tracking systems can be used to monitor the temperature in 

make it worthwhile,” said Forssell. 

Companies with trailers carrying 

food that needs to be kept within 

temperature limits are also increasing 

their interest in telematics because the 

trailer tracking system can monitor the 

refrigeration system and alert the driver 

or logistics centre if the temperature 

strays outside the limits. 

“It can be used to prove the goods 

were looked after properly,” said 

O’Connor. “It is all about customer 

care.” 

What is surprising given the benefits 

of tracking systems for trailers is how 

little they are being used. The reason, 

most in the industry agree, is that the 

message has not got out there. 

“I think there is an awareness 

problem,” said O’Connor. “I don’t think 

people know what can be done. We are 

only limited by imagination. It is not 

just a matter of buying a box.” 

Forssell added: “It is a bit slower 

taking off than people thought a few 

years ago. But now the price of the 

equipment is coming down as are the 

communications costs with GPRS.” 

The initial companies tend to be the 

large fleets but that is now trickling 

down to smaller companies that are 

hired by the larger fleets. 

“We have customers with more than 

100 trailers and we have customers 

with just three trailers,” said Neu. ❚

Mixed reactions from UK conference 

The commercial vehicle world is adopting telematics but there are still problems. 

Steve Rogerson reports from April’s Commercial Vehicle Telematics UK conference 

in Birmingham. 

THE TELEMATICS INDUSTRY LEFT 

Birmingham’s NEC with mixed feelings 

about the state of the market. Delegates 

at the Commercial Vehicle Telematics 

UK 2005 conference heard tales of 

success, of companies that had saved 

themselves many thousands of pounds 

with gorgeously short payback periods. 

Yet they also heard about the slow take 

up of the products and disenchantment 

among a sizable minority of users. 

Some of the headline figures looked 

healthy. In just two years the number of 

companies using vehicle-tracking software 

had almost doubled from 17 per 

cent in 2002 to 33 per cent last year, 

according to a survey by the Freight 

Transport Association (FTA). Yet the 

same survey showed hardly any movement 

at all in those using routing and 

scheduling software, up from 24 to 27 

per cent in the same period. 

Don Armour: “There are some great things on 

offer, but take-up won’t happen over night.” 

The reasons given for those not 

embracing telematics were predictable, 

with just over half quoting installation 

and start-up costs and nearly as many 

quite happy with their current system. 

“The oldest logistics method of a 

notebook and telephone is still used a 

lot,” said Sjef van Gool, Product Development 

Director at Qualcomm Wireless 

Business Solutions. “Someone in the 

office communicates with the driver by 

phone and scribbles details in a notebook. 

That can be sufficient and a lot of 

companies are happy with that. But 

there are ways to make even small businesses 

more efficient.” 

This was shown in the survey with 

almost a quarter of companies believing 

the size of their fleets did not warrant 

telematics. A small five per cent 

believed the technology was too 

complicated. 

But while the proponents of the 

technology continued to beat the drum 

of potential fuel savings and recovery of 

stolen vehicles, only a small percentage 

of users rated those as important benefits. 

Top of the list was the improved 

ability to manage vehicles and drivers, 

followed closely by knowing where the 

vehicle is and receiving information 

about it. Reducing insurance premiums 

was right at the bottom, a blow to 

Norwich Union, which again used the 

conference to promote its cheaper 

insurance for companies adopting 

telematics. 

On the flip side, the biggest disappointment 

for users at 30 percent was 

the high cost. And just over a fifth were 

unhappy with the level of aftersales 

service. 

“This is an issue the industry has to 

address,” the FTA’s Head of Telematics, 

Don Armour, told the conference. 

But Michael Leeming, Director of 

Vehicle Management at Man Truck & 

Bus, said that some users were 

unhappy with their telematics systems 

because they had been oversold in the 

first place. 

“There is an element of over expec- 

Analysis 

EUROPE FOCUS 

tation with telematics,” he said. “Therefore, 

we under-deliver what the 

customer expects. We have to look at 

delivering customer satisfaction.” 

And he said the industry’s image had 

been tarnished by the number of 

cowboy suppliers in the market. 

Also depressing was the high 

number of companies surveyed who 

won’t consider telematics until new 

legislation forces them to or the costs 

fall significantly. 

“People are saying they need a proof 

of ROI,” said Armour. “There are some 

great things on offer, but take-up won’t 

happen over night. The prices are too 

high because transport companies are 

on tight margins. And the technology 

has to be kept simple.” 

Yet fleet managers are under pressure 

to reduce fuel and maintenance 

costs, overtime and office costs. They 

Rick Sheehan: “You can teach old dogs 

new tricks.” 

also want to increase customer service, 

and telematics can provide all this with 

load tracking, just-in-time delivery and 

traffic information. 

“We need to prove to them that 

telematics can do this through case 

studies and white papers,” said Franck 

Leveque, Programme Director at analyst 

Frost & Sullivan. “And we have to take 

this beyond large fleets and tap the 


17

Analysis 

EUROPE FOCUS 

Sjef van Gool: A notebook and telephone 

can be sufficient for many companies. 

small fleet market. Fleets with fewer 

than ten vehicles represent 70 per cent 

of the fleet market.” 

If it was case studies he wanted, the 

conference provided two good examples 

– stationery company Office2Office 

and cement maker Cemex. 

Office2Office is the UK’s largest 

stationery supplier, used to be called 

Banner and was part of HMSO. Its 150 

delivery vehicles in the UK spread 

across 18 depots provide a next-day 

delivery service. Most of the vehicles are 

taken home by its drivers each evening. 

The company, because of its government 

roots, has a high-profile client 

base including the Ministry of Defence, 

the NHS and Barclays Bank. 

“We needed visibility of the vehicles,” 

explained Simon Stretch, 

Office2Office’s national distribution 

manager. “We needed to look at cost 

control in overtime monitoring and 

fuel costs. We needed to improve 

productivity and customer response 

times. We wanted to avoid traffic delays. 

We needed to monitor out-of-hours 

usage and security. We had to look at 

corporate responsibility issues such as 

speeding and the working time directive. 

And the solution needed to be 

internet based and used by different 

people in the company. And it needed 

to be scalable for future expansion.” 

The company started with a pilot 

scheme using 12 vehicles for just eight 

weeks to evaluate potential ROI with a 

telematics system from Cybit. The study 

concentrated on four key areas – overtime, 

fuel costs, unauthorised vehicle 


usage and productivity. 

The study detected 31 hours of overclaimed 

overtime, and this was from 

drivers who knew they were being 

monitored. There were also more than 

400 miles driven without authorisation 

at a fuel cost of 11p per mile. Productivity 

savings included about 50 miles 

per vehicle during the period and that 

the company found it had the capacity 

to increase the number of drops per 

vehicle. Drivers were also regularly 

breaking the speed limit and leaving the 

vehicles idling. 

When all this was added up and 

extrapolated to the whole fleet, the 

company estimated that it could save 

£76,800 a year and improve delivery 

performance by about 25 per cent. Not 

surprisingly, the system is now being 

deployed on a further 128 vehicles and 

they hope to take advantage of Norwich 

Union’s cheaper insurance deal. 

Cement firm Cemex opted for the 

Dynafleet system from Volvo, which 

gave the company enough information 

about the way its staff were driving to 

set up half-day training courses tailored 

to their needs. 

Sharon O’Meara, Head of Telematics 

at Volvo Trucks, explained how it 

works. “The customer gathers vehicle 

performance data and driver data,” she 

said. “The vehicle information comes 

from the tachometer. The driver has a 

driver card that is unique to the driver.” 

“It let us look at driver techniques,” 

said Rick Sheehan, Cemex’s general 

manager of logistics. “We even had a 

case where a vehicle rolled over and it 

let us look at what happened. We found 

he was driving aggressively and was 

speeding when he hit the bend.” 

Generally, though, the courses 

improved driving techniques so much 

that the company is achieving an 

average fuel consumption of 8.5mpg 

compared with 7.8mpg previously. 

Before the system was installed, 23 per 

cent of fuel use was from idling; this is 

Simon Stretch: “We needed to improve 

productivity and customer response times.” 

now down to around ten per cent. The 

combination of the two has cut fuel 

costs by seven per cent leading to an 

annual saving of more than £330,000. 

The firm has now set up a reward 

and recognition scheme based on fuel 

consumption, accidents and so on. 

There is also a regional driver of the 

year contest in each of its three regions. 

The top ones are hitting 9mpg. 

Spin-off benefits include less vehicle 

wear and thus lower maintenance costs 

and fewer accidents. 

What both Cemex and Office2Office 

stressed was that it was not enough just 

to install a telematics system, but that 

decisions had to be made based on the 

information it provided. 

“Dynafleet is just a tool,” said 

Sheehan. “If you don’t use it, it doesn’t 

work. So you have to support it in the 

back office. Once a month, I get details 

of what each vehicle and driver has 

done and we can look instantly at 

drivers in the bottom quartile. But we 

don’t wait until the end of the month to 

stop problems, we can see what is 

happening each day and can talk to the 

drivers straight away if there is a 

problem.” 

“The Cybit system gives us a lot of 

information,” said Stretch, “but you 

then have to make managerial decisions 

based on that information.” 

And Sheehan summed it up when he 

said that even the older, more experienced 

drivers had improved as a result 

of installing a telematics system. 

“It showed you can teach old dogs 

new tricks,” he said. ❚

Telematics Sales & Ethic: addressing 

both buyers & partners concerns 

Brian Martin identifies the areas both UK Buyers and Partners are scrutinising, to find 

a credible Telematics Service Provider. 

I HAVE PREVIOUSLY QUESTIONED 

the ethics and poor sales practices of a 

few that have tarnished the image of 

vehicle telematics in the UK. The question 

now is: have things changed? 

The good news for buyers and partners 

alike is that we are now seeing 

more professional (listed) companies 

enter the UK, and current established 

companies begin to adopt a professional 

approach by starting to put value 

into their company and their brands. 

However with any increase in 

companies entering this market space, 

the poor practices highlighted in my 

previous article will still remain. The 

very use of third party finance institutions 

to lease the technology, and pay 

the Telematics Service Providers (TSP) 

the total monies on a signed 5 year 

lease upfront, is open to abuse. New 

starters can enter this industry, be 

aggressive in their sales approach, sign 

up a few 5 year deals and walk away 

with the money, leaving the poor 

customer tied up in an agreement 

which must be paid. 

Buyers/Partners have become more 

educated and aware of the poor practices, 

thus it is important for Telematics 

Service Providers to differentiate themselves, 

and address the concerns of the 

buying public. Below are a few areas 

that potential buyers and resellers are 

looking at when considering to partner 

a TSP: 

Contact details 

Companies like direct contact. Therefore 

buyers/partners will be very 

cautious of any TSP that only has online 

contact forms. It is alarming to see TSPs 

Good TSPs should not be down to chance 

Analysis 

EUROPE FOCUS 

on the internet without any contact 

address or phone number. If companies 

can’t get hold you when they actually 

want to buy from you, it does sow 

the seed of doubt, as to what would 

happen should they need any form of 

support? 

A prime example has to be Info- 

Track, a former colleague of mine was a 

Reseller for them, when without 

warning in early June 2005 they disappeared. 

All the contact numbers he has 

are switched off, the Office building is 

allegedly up for let, and his customers 

cannot make direct contact because the 

web site has no contact information 

other than an online form, which I 

completed as a potential buyer, and 

three weeks later still haven’t had a 

response. 

Research 

Buyers are prepared to learn as much 

as they can about a TSP, its portfolio and 

more importantly its customers. It is 

amazing to think of how many companies 

have reams of literature on reference 

sites, but when asked for a contact 

they actually decline to pass one over. 

In fact due to the lack of service offered 

by some players in the market, we are 

finding that these reams of references 

are fast becoming contact lists for rival 

TSPs. Thus it is important to ensure 

that every publish reference site is a 

happy customer. Buyers/Partners will 

want to speak to a reference site or two, 

to be reassured they are making the 

correct choice, or to be glad the deci- 


19

THE VITAL ISSUES ANALYSED BY EXPERTS: 

• PORTABLE DEVICES: Hear how CVT is moving towards a mobile telematics platform, 

whether the trend is permanent and how to ensure your offering is adapted to take maximum 

revenue advantage if it is! 

• SOURCE PROFITABLE PARTNERSHIPS: How the best products come from the best made 

alliances. Get the low down on how to build a profitable R&D partnership 

• GET THE WORKING TIME DIRECTIVE RIGHT: Learn how to ensure your WTD reports are 

up to scratch. Find out what is needed in different countries in Europe and how this affects 

your product 

• MANAGING DRIVER, TRUCKS, TRAILER AND CONTENT: What do customers want and 

need, and how can you meet their shifting objectives? Hear the latest on driver management, 

diagnostics and fuel management 

• REEFER TRACKING: Learn how to combine temperature monitoring and location tracking for 

one of the most demanded and valuable applications 

The ONLY meeting place where application providers, telematics service providers, 

vehicle manufacturers and technology providers learn how to generate profit in the 

transport tracking and management industry 

Global Sponsor: 

5 - 6 October 2005, Gothenburg, Sweden 

This event will help you solve all the critical issues 

related to transport tracking; from driver, fleet 

and trailer management to transport safety, road 

charging and digital tachograph 

Media Partners: 

The 4th th annual telematics event in Gothenburg 

Transport Tracking 2005 

Cocktail Sponsor 

AND 

Telematics Gothenburg & the Vehicle Tracking conference series join forces 

How to sell Commercial Vehicle 

Telematics services 

Strategies to get more out of partnerships, exploit new 

markets and maximise portable device revenue potentials. 

Badge Sponsor 

Gold Sponsor: 

For more details, visit www.telematicsupdate.com/1 

or contact thomas@telematicsupdate.com 

Key Speakers Include: 

Svante Bergh, Senior Vice President, 

Ericsson Microwave Systems AB 

Erich Nichols 

Director of Global Telematics, IBM 

John Berry, Principal Administrator, 

European Commission DG Tren 

Per Adamsson 

Manager Telematics Services, Volvo trucks 

Juhani Jaaskelainen, European Commission, 

DG Infso Unit G-4 - ICT for Transport 

Joan Williams 

Head of Road Freight Policy, FTA 

Willem Duijf 

Product Manager, GE Equipment Services 

Matt Hague 

In-vehicle Product Manager, Microlise 

Jean Francois Janin, Director of Intelligent 

Transport, French Ministry of Transport 

Melissa Jenkins, Head of Telemetry, Orange 

Damian James 

Transport Controller, South West Water 

Supporting Organisation: 

ACCELERATES INTELLIGENT MOBILITY 

see inside for details 

Get in for 

HALF PRICE 

if you’re fast 

enough!

sion has yet to be made. 

Buyers now demand more than just 

a power-point presentation, and will 

often request a trial/demo. I would 

suggest you give them one, even if this 

is a paid for trial, it will be money well 

spent. In terms of functionality and 

ease of use, they will be able to see first 

hand what they are going to get rather 

be told what it will be. 

Hidden costs 

The fixed monthly cost has become the 

standard, but how fixed is it? It is important 

that it remains fixed and includes 

any form of Hardware, Software or 

Firmware updates. Buyers/Partners do 

not like surprise especially ones that 

cost money, so be open about any additional 

costs, be they for installations, 

polling or maintenance. 

Also let your client know what 

happens if they go abroad with your 

system; if there is no GPRS coverage 

does it switch to SMS and continue 

updating and who picks up that those 

SMS costs? 

If the vehicle goes abroad, will the 

system still track? If yes, then what are 

the associated costs? GPRS roaming 

charges will most likely not be included 

in the package and roaming tariffs in 

Europe can be exorbitant? 

That might sound a little daft, but I 

do know of an example where a driver 

popped over to France for approx 

18hrs, although he wasn’t hit by GPRS 

roaming charges, the unit did switch 

over to SMS, at an update rate of 5 

minutes. The SMS charge was 0.12p, 

and his bill when he got back was 

£25.92. Now imagine if that was a week? 

24hrs x 7 days would actually equate to 

£241.92, a little different to the 0.99p 

per day as quoted by his supplier. 

Data Storage 

Buyers/Partners will ask what happens 

to the data if the vehicle location unit 

(black box) cannot transmit due to a 

coverage black spot? Will your unit 

store the updates and event logs and if 

so how many and for how long? 

The technology side of the market 

has improved, with most systems 

capable of utilis ing ‘store and forward’ 

functionality. I believe the standard 

storing capacity now is approximately 

1000 events, or journey logs, which will 

be saved until the there is GPS coverage 

to send the information. 

Payment options 

The AVL vehicle tracking sector tends to 

rent/lease rather than to sell its’ products 

outright. And there are a lot of 

good arguments for this, e.g. helps cash 

flow by not being a Capital Expenditure. 

The typical rental agreement can 

be anything from 1 to 5 years, which is 

a FIXED RENTAL PERIOD. 

However because this payment 

method it open to abuse, buyers are 

aware that the Telematics Service 

Provider is often just the supplier of the 

goods; the actual rental agreement is 

often done through a third party. Therefore 

if they have a problem with the 

product or service, they will not get a 

sympathetic hearing from the finance 

should they want to stop payments 

until a problem is resolved. 

Below is an example taken direct 

from a ‘Fixed Period Lease Rental’: 

“It is not a condition of this agreement 

that software maintenance and 

support is provided therefore, Rentals 

will continue to be payable even if the 

supplier fails to provide such maintenance 

and support.” 

And sadly we have seen court cases to 

that effect; where the technology doesn’t 

work, the customer stops paying, but the 

contract demands payment to the 

leasing company, and naturally they win 

and the customer looses. 

To install more confidence TSPs 

should offer a Service Level Agreement 

or warranty along with the 

products/solutions sold. 

Analysis 

EUROPE FOCUS 

In the UK, I only know of one TSP 

that actually finances their own agreements, 

and they are the Astrata Group. 

Astrata, have recently entered the UK 

market, and have recognised and are 

attempting to address these failings by 

establishing themselves as the professional 

partner of choice. Their 

customer rental agreements are direct 

with Astrata the company, not a third 

party. Therefore if a genuine fault with 

the product arises, the customer can 

stop payments until the fault if rectified 

or the unit replaced. 

Don’t get me wrong, I am not 

against third party leasing/rental agreements, 

so long as the other areas are 

checked and in place. But if a company 

has faith in its own products, why pass 

the risk onto third parties or their 

customers? 

I am pleased that things are beginning 

to change in the UK. I just hope 

that those companies that own the 

whole value chain, like Astrata are able 

to make a difference. Likewise hardware 

distributors especially trakm8, are 

gaining in respect but it is up to them to 

monitor which TSPs they partner with 

to sell their products to ensure their 

values and credibility are upheld. 

Simply, more companies need to take 

the mantle of credibility and lead by 

example, then exceed their customers’ 

expectations by offering great service. 

When making the correct solution or 

partner choice, it should never come 

down to “who is the cheapest”. A great 

negotiation tip for Telematics Service 

Providers: “Value for money, quality, 

service – say to your prospect or 

partner, which one would you like to 

leave out?” ❚ 

Brian Martin is a Sales and Marketing 

professional, specialising in the market 

of Telematics Service Providers. He can 

be contacted at brian@vtsolutions.co.uk. 

More information is available at 

www.vtsolutions.co.uk. 


21

TELEMATICS TELEMATICS ASIA ASIA 

JAPAN JAPAN 2005 2005 

Japan 

the latest Telematics developments in the region 

Telematics Asia 2005 comes to one of the most 

advanced markets for telematics in the region, Japan. 

Bringing together a multi-national group of expert 

speakers this is your chance to get updates on 

and predict the impacts this will have on the rest 

of the market, domestic and international 

2005 

Get involved! For speaking, sponsoring or exhibiting opportunities contact anita@telematicsupdate.com 

or telephone: +44 (0) 20 7375 7196

Singapore Government takes lead in 

tracking vehicles carrying hazmat 

Astrata Group’s Sandy Borthwick addresses the factors involved when establishing a 

comprehensive tracking system for vehicles carrying hazardous materials (Hazmat). 

THE SINGAPORE GOVERNMENT 

is believed to be the first country in the 

world to adopt a nationwide vehicle 

tracking system for all vehicles carrying 

Hazmat. Sited by a recent news report 

on the CNN International television 

channel as possibly the safest country in 

the world, the SCDF has been working 

closely with The Astrata Group. 

In a multi-million Singapore dollar 

contract, Astrata has developed a 

system to regulate the movement of all 

vehicles carrying hazardous materials 

on Singapore’s roads. The contract is 

for software and hardware integrated 

into a comprehensive tracking, monitoring, 

and sophisticated control 

system with features and capabilities 

unsurpassed in the market. 

Defining the risk 

In the case of Hazmat, there is of course 

a credible threat and the potential that 

in the wrong hands such materials 

could be used as a weapon of mass 

destruction. Traditionally, when transporting 

such materials, safety has been 

the focus when considering the 

management of risk however since 9/11 

greater emphasis has been placed on 

security. 

The need to firstly define the risk is 

essential to allow a starting point and 

properly understand the situation. If we 

were to firstly say that Risk is a factor of 

probability and Consequence. 

To be clear, probability is the chance 

that something could happen and 

could be expressed in terms of Hazmat 

transports, accident rate, environmental 

conditions and a number of 

other ways. The consequence is the 

result of something happening and 

could be expressed in terms of 

numbers of fatalities, injuries, evacuations, 

environmental impact and the 

cost of clean up and repair as well as 

any commercial loss etc. Security adds 

the new dimension of threat, which is 

broadly based on intelligence and 

defined in terms of ‘level of threat’. Risk 

can therefore be defined in security 

terms as: Risk = Probability, Consequence 

& Threat. 

Mitigating the risk 

Once the risk has been defined it is 

important then to look at 

mitigating such a risk. A 

comprehensive evaluation 

report of Hazmat authorised 

route planning with clear 

safety and security considerations 

needs to be drafted 

with the deployment of a 

system to accurately track 

and control Hazmat transporters 

real time to ensure 

full adherence to authorised 

routes. In the case of the 

SCDF contract in Singapore 

this included the consideration of early 

warning systems, first responder 

command and control and legislation 

and enforcement. 

The Hazmat route planning itself 

should be based on cost (distance & 

time). Safety (accident prevention) and 

Analysis 

ASIA FOCUS 

security (risk of hijack). There are a 

number of questions and criteria that 

need to be addressed including: 

Exposure: What is the size of population? 

How many individuals are at 

risk? 

What is the socio-economic impact 

of an incident? The cost of damage 

both direct and in direct. 

The risk of hijack, are there factors 

that make this easier? 

What are the traffic conditions? This 

is a basic element of vehicle routing 

How effective would an emergency 

response be? The need to determine 

rescue efficiency and consideration that 

a police or military presence deters 

terrorists. 

Step 1 of Hazmat route planning is to look 

at the criteria and devise a scoring system 

by classifying the factors 

The relative importance of the 

respective criteria and their factors is 

determined using an Analytic Hierarchy 


23

Analysis 

ASIA FOCUS 

Process (AHP). The cumulative weights 

and scores that represent the generalised 

cost of each route considered is 

given by: 

The relevant data is input into a GIS 

database and modeled to produce the 

least cost routes from the generalised 

cost model. 

Once the approved Hazmat routes 

have been determined that present the 

least risk, the challenge moves from 

theory to practice and applying the 

technology. 

Astrata’s Geo-Spatial Information 

Technology System (the “GEO-IT 

System”), an advanced tracking, monitoring, 

and control software system, 

combines the Astrata Geo-Location Platform 

(the “Astrata-GLP” known as 

“Sirius-Lite” outside the U.S.), the 

world’s smallest and most technologically 

advanced fleet management and 

vehicle real-time tracking device. A new 

state-of-the-art Rapid Deployment Unit 


(RDU), a derivative of the GLP, which 

can be attached within seconds to vehicles 

entering Singapore, was also developed 

for this contract. This is ideal for 

vehicles entering the country from 

nearby Malaysia. 

The GLP combines a GPS receiver, a 

GSM cell phone, and a sophisticated 

computer operating system integrated 

into a single package approximately 

50% the size of a modern mobile phone, 

making it easy to conceal, even in covert 

installations. The device integrates a 

GSM/GPRS module, which is permanently 

active and not dependent on a 

vehicle’s ignition, and can receive 

commands at any time over the air. The 

GLP achieves unprecedented low-power 

consumption through the use of 

advanced power management algorithms. 

With built-in wireless communications 

options including quad-band 

GSM or CDMA, 

GPRS, SMS, circuit 

switched data 

(CSD), Bluetooth, 

and wireless LAN, 

the Astrata-GLP can 

monitor and 

control fleets of 

virtually any equipment, 

vehicles, 

assets, shipping 

containers, or even 

individuals, using 

real-time informa- 

The map of 

Singapore indicates 

the approved 

Hazmat transportation 

routes 

tion and Astrata’s 

GEO-IT system. 

Astrata’s GEO-IT 

System will ensure 

that vehicles 

carrying hazardous 

materials adhere to 

one of the Government approved 

routes in and around the city. These 

routes are specifically designed to avoid 

highly populated areas, power plants, 

reservoirs, and sensitive buildings. 

The Astrata GEO-IT System has the 

ability to remotely immobilise vehicles 

if they stray from these permitted paths, 

thus deterring terrorists from hijacking 

such carriers to use as explosive fuelbombs. 

This contract validates our 

design approach to incorporate a full 

onboard computer operating system, 

which can be programmed over the 

air for sophisticated customised 

applications. 

A Hazmat tracking system such as the 

one illustrated helps to mitigate the 

risks of an incident. Driver verification 

and behaviour, vehicle accident or 

hijack are all factors addressed in this 

system as well as unauthorised driver or 

delivery/route information. Through 

the application of biometrics, immobilisation, 

on-board driver profiling and 

intelligent GPS tracking as well as 

impact sensors, geo-locking and black 

box technology the Government of 

Singapore has become a global leader 

in implementing homeland security 

regulations to protect their citizens. ❚ 

Sandy Borthwick is the former Managing 

Director for Astrata Asia Pacific region, 

now Europe. He can be contacted at 

sborthwick@astratagroup.com

The outlook of Malaysian commercial 

vehicle telematics market 

Analysis 

ASIA FOCUS 

Karen Tan Siok Hui looks at the commercial telematics market in Malaysia after it went 

through a phase of market education 

THE YEAR 2005 IS EXPECTED TO 

be a boom year for the Malaysian 

commercial vehicle telematics market, 

after going through a phase of a few 

years of heavy market education. 

With a relatively young history of five 

years, the nascent market has still not 

reached a level of any specific industry 

specialis ation. Most of the industry 

participants play more than one role: 

the majority of the system integrators/ 

distributors are also the service 

providers. 

The market demonstrates similar 

characteristics as that of 

the European market 

(right). In Europe, almost 

ninety five percent of the 

system sales were 

contributed by aftermarket 

in 2004. In 

Malaysia, despite the 

market being in its early 

development stage, 

telematics systems are 

offered only in the aftermarket 

segment. In Europe, navigation systems 

for commercial vehicle application are 

widely developed; however, there is no 

navigation offering in the Malaysian 

market, largely owing to the unavailability 

of accurate, quality digital maps. 

Constant road changes and infrastructure 

development reduce the map reliability 

and increase the map 

maintenance cost. 

Service revenues have become the 

major income contributor in the North 

American and European market. At the 

initial stage of development in Malaysia, 

seventy percent of the revenues were 

contributed from system sales in 2004. 

With a subscription base of less than 

8,000, service revenues are not 

expected to be the major income 

source in the next three years. Unlike a 

developed country market, service 

providers in Malaysia do not earn a 

share from airtime revenues. Thus, the 

business model of subsidis ing systems 

costs through airtime revenues is not 

viable at the current stage. 

Despite the market size in 2004 

being relatively small 

(with 4,000 odd system 

sales), the market 

demonstrated a fragmented 

structure. More 

than 20 participants 

were eying the commercial 

vehicle market 

which consists of about 

800,000 units of 

commercial vehicles, of 

which almost 40 percent are owned by 

logistics companies. 

More multinational corporations will 

be making inroads into Malaysia, stepping 

up the competition level to that of 

a highly competitive market. International 

competitors such as Navman NZ 

Limited (New Zealand), AGIS Pte Ltd 

(Singapore) and Thales Group (France) 

are expected to enter the market. Interestingly, 

multinational tier-one 

suppliers and system suppliers such as 

Delphi, Denso, Bosch, Visteon and 

Motorola who have significant presence 

in other developed telematics country 

markets have not indicated a venture 

into the Malaysian market. Siemens 

VDO, which already has some supplies 

in the bus segment plans to enter the 

truck market later this year. 

2005 is expected to be a good year 

for the telematics market. System sales 

are expected to be contributed mainly 

from logistics companies. One of the 

Malaysian logistics industrys’ “Big Four; 

Kontena Nasional has called for a 

tender to supply telematics for all its 

trucks and trailers. The high rate of 

vehicle hijacks have urged the trucking 

companies to install telematics with 

GPS tracking features for better security 

whilst transporting goods for their 

customers. 

Initially, telematics was installed in 

trucks carrying high value goods such 

as semiconductors and chips as a 

tracking device for anti-theft prevention. 

In recent years, Malaysia has 

undergone a heavy market education 

stage on telematics systems. The 

enhancement of end users’ awareness 

on telematics was seen following Nestle 

Malaysia announcement. That only 

GPS-equipped trucks were permitted to 

deliver Nestle goods effective from 

January 2005. A total of 250 trucks from 

eight trucking companies carrying 

Nestle goods have been installed with 

Astrata’s GLP telematics systems. 

Nestle’s case has demonstrated that 

the application of telematics is not only 

limited to transporting high-value 

goods. In order to fulfill the end user 


25

Analysis 

ASIA FOCUS 

requirements, logistics companies were 

urged to install telematics in their 

trucks. At this current stage, the value of 

goods transported determines the need 

for telematics. Heavy commercial vehicles 

(HCV) above 16 tons (gross vehicle 

weight) are mainly used in carrying 

high value goods. Thus HCVs have the 

highest telematics adoption rate. The 

situation will change when consumer 

awareness on telematics benefits are 

enhanced. 

Since liberalisation of logistics industries 

in 2001, the lucrative market has 

attracted many smaller industry players. 

There are more than 1,000 logistics 

providers nationwide. 

Dwindling profit margins forces the 

logistics companies to maintain high 

cost efficiency. Price competition and 

increasing operating costs (rising toll 

charges, diesel price and maintenance 

costs) urge for rising importance to 

adopt an effective fleet management 

system. 

“We are looking for a system which 

could save cost and provide information 

on our operating cost” commented 

a sales manager of a travel company 

which owns 100 buses. 

“Consumers (logistics companies) 

expect a system which can decrease the 

cost, enable timely delivery of goods 

and provide any other 

advantages/value-added services which 

can differentiate themselves apart from 

their competitors”. Commented a 

manager from Tan Chong Industrial 

Equipment Sdn Bhd (Distributor of 

Nissan UD commercial vehicles in 

Malaysia) 

Another major driver for the telematics 

market can be associated with the 

recent hike in fuel price. The Malaysian 

government has been subsidising fuel 

price. In 2004, fuel subsidy had cost the 

government US$1.26 billion; of which 

70 percent were subsidies for diesel. 

The burden got heavier when oil prices 

started to climb since Q2 2004 and fuel 


smuggling to neighboring countries 

was getting worse. The Government 

had increased the diesel price by 

RM0.30 since last October to narrow 

down the price gap between diesel for 

industrial and automotive applications. 

Minimising fuel consumption has 

become a priority target of truck 

owners. 

Telematics is aggressively promoted 

as a means to improve logistics companies’ 

cost efficiency in service delivery. 

Telematics functions have evolved from 

the fundamental safety and security 

aspects to offer more value-added 

features. Sensors for fuel, brakes, 

engine status, temperature and geofencing 

have been introduced to 

promote on fleet management features. 

Pricing is always a great challenge in 

the price-sensitive Malaysian market. 

From 2001 to 2004, telematics systems 

prices declined by approximately one 

quarter to US$674 (RM2,562). A fall in 

system component price, increasing 

competition level and larger market 

volume (due to economies of scale and 

distributed R&D costs) will eventually 

drive the system price down. 

The price is expected to further 

decline over the years, demonstrating 

common characteristics of electronic 

goods. 

While system prices get more affordable, 

telecommunication costs are 

declining concurrently. The recent 

price slash among the mobile carriers 

has benefited the consumers with lower 

SMS and GPRS charges. GPRS charges 

could go as low as 1 cent (RM) per kilobyte 

(KB). Low telecommunication 

costs encourage more usage of telematics 

in transferring data. When 3G (it 

was newly offered only by Maxis and 

Celcom) is better received in future 

with more affordable rates, it would 

help to enhance voice and data capability 

accommodated with high-speed 

data transfer for telematics application. 

System suppliers, who are also the 

service providers, have embarked on 

offering leasing and rental packages. 

Without a large upfront investment, the 

concepts turn telematics services into a 

more affordable offering, especially for 

logistics companies which have large 

fleets. Consumers are now given an 

option whether to purchase the system 

at the end of a lease period, and at the 

same time enjoy flexibility of upgrading 

the system when new features are introduced. 

Consumers who do not wish to 

tie down to one system will opt for the 

rental package, and enjoy flexibility of 

switching from one system to another. 

Logistics companies with large fleets 

can now roll their cash saved from 

purchasing the system more effectively. 

Some market participants even offer 

short-term rental on a project basis to 

cater to the needs of the truck owners. 

From basic tracking, safety and security 

features, telematics is moving 

forward to offer more value propositions 

to the end users. From fleet 

management to supply chain management, 

telematics is able to improve 

productivity and cost efficiency. The 

next challenge for market participants is 

to justify the cost saving benefits to the 

end users. The majority of the telematics 

consumers have not been able to 

visualise the value-added advantage 

offered by telematics. It would need 

more education efforts to convince the 

end users on making the extra investment 

to adopt these features (which are 

normally offered as an option). Telematics 

is still a viable tool worth investing 

in, especially in the competitive logistics 

industry. It is a matter of market participants 

quantifying the cost saving advantage 

for end users to appreciate the 

benefits of telematics. ❚ 

Karen Tan Siok Hui is research analyst with 

the Automotive Division, at Frost & Sullivan 

Asia Pacific. For more information about 

research reports or articles/content, 

please contact djeremiah@frost.com.

Get free news and reports on the 

machine-to-machine industry on 

www.M2Mupdate.com 

M2M is one of the world’s fastest growing 

communication segments, and electronically 

connecting the world’s 50 billion machines 

has the potential to dwarf everything that 

has come before it. M2MUpdate.com caters 

to the rapidly changing landscape of this 

marketplace with free news, white papers 

and reports designed to help participants 

stay abreast of the latest developments. 

Registration is free, and all registered users 

will automatically receive a free e-mail 

newsletter recapping the latest events in the 

industry. Subscribers also will receive free 

reports on the M2M market and its various 

vertical segments. 

News and press releases may be submitted 

for consideration by email to: 

editor@telematicsupdate.com 

Telematics Update presents 

M2M for Total assets 

Management Europe 

M2Mupdate.com 

The one of a kind event returns from its successful first instalment, this time in London in November. 

This is your chance to meet the M2M value chain in Europe from Module to Meter manufacturers and discuss 

the key issues in your industry: 

• Positioning and partnering strategy in the M2M value chain 

• Determine where the value is in M2M solutions 

• Discuss the wireless network standard choices and strategy 

• Discover how the UK carrier are backing M2M 

• Find out what it takes to ease the user to implementation process 

• Vertical sessions: End user case study based analysis of the M2M vertical markets 

Get involved! For speaking, sponsoring or exhibiting opportunities contact thomas@telematicsupdate.com 

or telephone: +44 (0) 20 7375 7185

Analysis 

M2M section 

AMR gaining traction in US, but majors 

remain on sidelines 

Automated Meter Reading technologies that fundamentally change the economics of utilities have 

been talked about for years. Experts from Motorola, Northrop Grumman, Elster, and Forrester, as well 

as AMR users, discuss why the shift hasn’t happened yet – and the forces that may turn the tide. 

AUTOMATED READING OF UTILITY 

meters is a decades-old idea. But as the 

technology has advanced, so to has the 

vision of how automated meter reading 

(AMR) could fundamentally change 

utility business processes. With the 

vision always slightly bigger than the 

reach of available technology, the 

largest U.S. utilities have largely 

continued to wait. 

Over the years, some U.S. utilities 

have adopted rudimentary forms of 

AMR. For example, utilities gave their 

workers hand-held readers that could 

pick up the signals emitted by meters a 

short distance away, eliminating notetaking, 

as well as the need to climb 

fences or enter basements to physically 

view dials. More recently, some utilities 

have adopted units mounted in truck 

cabs to gather readings from houses 

and businesses as the trucks drive by. 

Truck-mounted units still deliver just 

one reading per month, however, and 

someone still has to drive the trucks – a 

far cry from the long-held vision of an 

intelligent two-way network. And 

although one-way fixed-network 

approaches, which also have gained 

some adoption, can deliver data more 

frequently, they cannot be used to 

remotely troubleshoot data collection 

problems or perform connects and 

disconnects. 

ROI depends on more than reading 

meters 

“We know there is not a business case 

for automated meter reading alone,” 


says John Soethe, Manager of Revenue 

Cycle Services for Salt River Project in 

Phoenix, Arizona, which is beginning 

the process of building out its 

successful pilot project. This summer, 

Salt River will begin replacing 25,000 of 

the 825,000 meters in its 2,900-squaremile 

service area with a two-way, selfhealing 

mesh network AMR system. 

“You cannot justify smart metering 

and building the interfaces just to keep 

the meter reader from walking the 

route,” Soethe said. “Where you get the 

payoff is the field services work – turns 

ons, turn offs, disconnects for nonpayment. 

The cost of multiple trips for 

disconnects, reconnects, turn on and 

turn off activity is the backbone of the 

AMR business case.” 

Salt River Project is one of a handful 

of major implementations that utility 

executives are closely watching this 

summer to see if AMR technology has 

finally reached maturity. 

Majors looking, but not buying 

“Automated meter reading is an item 

that pops up quite a bit when we talk 

with CIOs at utility companies in terms 

of technology they’re investigating,” 

observes Andrew Bartels, Research 

Analyst at Forrester Research. 

“However, actual deployment has been 

more scattered.” 

Bartels observes that the earliest 

adopters have tended to be water utilities. 

He speculates they have the most 

to gain from AMR because it can help 

them identify and eliminate water leaks 

that drive up operating costs without 

generating revenues. The slowest 

adopters, on the other hand, have been 

the nation’s largest investor-owned 

electric utilities. 

“It’s a costly upfront expenditure,” 

observes Jeffrey King, Director of Sales 

and Marketing for Northrop Grumman 

IT Utilities Systems, the system integrator 

on the high-profile AMR project 

for the municipal gas and water utility 

in Corpus Christi, Texas. “Utilities are 

by their very nature conservative. 

Nobody wants to be first.” 

Technology: A moving target 

Bartels believes the electric utility 

industry’s reluctance to invest in 

current AMR stems from more than a 

conservative nature, however. 

“The electric utilities, it seems to me, 

are waiting for the technology to turn 

power lines into IP networks,” Bartels 

says. “If they can use their own power 

lines, they don’t have to make the 

upfront investment in wired solutions 

or incur the recurring charges to collect 

data over cellular networks. Plus, a lot 

of the utilities are realising that if 

they’re going to put a smart device into 

the home, they want to leverage that 

investment by making it capable of 

doing other services such as energy 

conservation management and security 

– things that require more broadband 

solutions. And so they’ve been willing 

to wait for broadband over power 

lines.” 

Although Bartels estimates it will be

several years before that technology 

matures, Motorola unveiled a new wireless 

to low-voltage Broadband Over 

Powerline solution just last month. The 

offering, which Motorola calls Powerline 

LV, combines the company’s 

Canopy broadband Internet platform 

with its HomePlug technology to 

deliver high-speed Internet service to 

consumers over power lines. 

The company has primarily touted 

Powerline LV as a way to bring Internet 

service to the estimated 13 million U.S. 

households that are too remote for 

cable modem or DSL services, but it 

also can support grid management 

applications such as SCADA, AMR and 

substation monitoring. The first application 

of the new Motorola technology 

will be in upstate South Carolina, 

where Broad River Electric will offer 

high-speed Internet to its 25,000 rural 

utility customers. 

A highly varied market 

Knowledgeable observers say the 

reasons that U.S. utilities adopt AMR – 

and the types of AMR they 

choose – are as varied as the 

markets they serve. 

“We’re finding that the 

drivers are different for 

different utilities,” says 

Sharon Allen, Chief Knowledge 

Officer at Elster, which 

is supplying the Salt River 

Project’s system. “Some are 

looking at how to utilise a 

common communications 

infrastructure across their 

business. Others are looking 

at improved customer 

service or responding to 

regulatory pressure for 

improved reliability and 

uptime. Some utilities want 

to be able to use their system 

to deliver broadband access. 

We’re seeing an acceleration 

in companies asking for 

information and proposal quotes.” 

Chris Banakis, Vice President and 

Director of Enterprise Utility Solutions 

at Motorola, agrees. He observes that 

“utilities are recognising the importance 

of establishing a two-way link to 

their customers. This type of link will 

ultimately enable a wide range of services 

that will provide major advancements 

in the area of customer service 

and significant cost reductions.” 

Many lookers, fewer buyers 

Translating RFIs and RFQs into signed 

contracts depends on a number of 

factors. Bartels of Forrester notes that 

many electric and gas utilities are still 

recovering from the collapse of Enron, 

limiting their spending potential. He 

believes one reason water utilities are 

leading the charge into AMR is that they 

were unaffected by Enron, unlike their 

counterparts in gas and electricity. 

Highly regulated utilities also are 

waiting to determine whether the state 

utilities commissions that control their 

rates will allow them to recover the cost 

Interview 

M2M section 

of investing in AMR systems, Allen says. 

But Banakis of Motorola observes 

that regulatory considerations are as 

likely to encourage adoption as to 

discourage it. For example, the state of 

California and the public utility 

commission in Ontario, Canada, are 

providing utilities with rate relief for 

AMR solutions that support residential 

energy conservation programs. 

Elster’s Allen sees that trend as well, 

predicting that as energy conservation 

becomes more important to U.S. energy 

policy, regulatory pressure to adopt 

AMR solutions will spread. 

“As the need for making consumers 

more aware of their energy consumption 

becomes more strategically important 

to this nation, the ability to price 

customers based on peak usage and the 

ability to give customers more control 

over their energy usage will increase as 

well,” she said. AMR is the only option 

capable of generating such detailed 

data. 

With a market potential estimated at 

$667 million annually, AMR vendors 

continue to angle to encourage utilities 

to adopt their technology sooner rather 

than later, while early adopters urge 

their colleagues to at least give AMR 

a try. 

“This is technology, like or not, a 

more efficient way of doing things,” 

says Leonard Scott, Business Unit 

Manager of the Municipal Information 

Systems department in Corpus Christi, 

Texas, which is currently managing the 

buildout of that city’s pilot AMR 

project. “I would say we’re all going to 

be there, and we decided it’s better to 

be there sooner rather than later.” ❚ 

Next month: A detailed look at the AMR 

projects in Corpus Christi, Texas (water 

and gas) and Salt River Project, Arizona 

(electricity). 

Bernadette Hearne is a US-based freelance 

writer specialising in technology. 


29

Interview 

M2M section 

T-Mobile explains the operator 

and data MVNO partnership 

This month we talk to Rob Price, T-Mobile’s UK M2M Marketing manager about the company’s 

partnership with Wyless 

As the T-Mobile Marketing Manager 

for large businesses, could you 

tell me about T-Mobile’s market 

offerings in M2M in light of your 

new partnership with Wyless? 

Yes sure. Our approach is a 

three-fold. The first is our 

partner Wyless, where we 

are perhaps the first wireless 

machine-to-machine operator to 

focus on offering GPRS as a bearer. Our 

second approach is to work directly 

with our larger corporate customers, 

and then our final approach is to offer 

large-scale capability through our 

wholesalers function, particularly 

around SMS. 

What are the key verticals you are 

looking at, and in which verticals 

will you be using GPRS? 

We are looking at security and surveillance 

and automatic meter reading, so 

that’s the three including the telematics. 

In terms of using GPRS, we can 

think of our video surveillance in terms 

of being able to monitor remote sites. 

We actually have base stations, for 


example, in T-Mobile where we manage 

remote door entry and access systems 

to the base station sites. We also back 

hall our camera images over the GPRS 

bearer. This is done in conjunction with 

a passive infrared detector so that 

should somebody approach the 

site, then the camera starts taking 

images and sending them back 

to our central control station in 

Hatfield. 

To continue with your three 

points, the third one was 

wholesale functioning using 

SMS. Can you tell me what 

you mean by that? 

Yes. The way we are organised in T- 

Mobile is that we have a wholesale position 

that looks at supplying to service 

providers. Where we have large requirements 

for hundreds of thousands or 

millions of connections, so CTNs can 

be supported, then we feel that we can 

best support them through that division, 

through that wholesale model. So 

what that means is we are able to 

provide a billing platform and a 

customer service that is suitable for that 

scale of deployment. 

We would use the infrastructure that 

we’ve had experience of using for 

MVNOs in voice and that infrastructure 

is tailored towards supporting a large 

number of connections with perhaps 

minimal interaction. Now if we can 

apply that same model to our large 

M2M dealers, and I’m talking about 

very large machine-to-machine dealers 

here, then that approach has a very 

good fit because machines don’t need a 

large amount of 

customer service. 

They don’t need to be 

mailed for attention 

purposes. They don’t need to 

know about the latest tariffs. There’s 

one point of control and one decisionmaking 

unit. By using that infrastructure 

that we already have in T-Mobile to 

inject in the machine-to-machine 

market we can offer an excellent experience. 

Can you outline the key 

advantages for you to work 

with an MVNO in general and 

with Wyless specifically? 

I think the key advantages from 

working with a mobile virtual network 

operator are that they can provide the 

added value through their different 

channels. The MVNOs represent an 

exciting new way of actually addressing 

the customers that we otherwise 

couldn’t, with whom they let us be able 

to do so. 

Where we fit best with Wyless is that 

they actually focus on a specific market 

segment, in this case machine-tomachine. 

They focus on offering GPRS

as a lead bearer, which we believe is the 

right way for the industry to go and 

enabling value by billing by transaction, 

rather than the traditional mobile operator 

method of minutes or megabytes. 

So for example, if they have a requirement 

for a mobile payment point, 

which is one of their case studies, 

rather than charge the customer on the 

bandwidth that they actually use, they 

charge them on the number of transactions 

and when those transactions are 

executed. That enables their customers 

to actually save. 

Also what that brings to the party is a 

flexible online audit solution that 

allows them to talk to any of the 

machines at any one point in time. So if 

there are any issues with those particular 

devices, they can execute an audit 

trail that actually automatically tests the 

network connection and the actual link 

and records then any failures they may 

have incurred that may have had an 

impact on their service levels. 

Less than 12 months ago, M2M 

was openly rejected by most 

operators because the RPU didn’t 

exist. There was no clear business 

case and no clear interest from the 

wireless carrier in M2M. In the last 

few months this has changed 

dramatically and we see all the 

major European operators offering 

M2M services. What has 

changed? 

I think the reason there’s sudden 

interest from the public sector and the 

mobile operators is that there are a 

number of legislative initiatives that 

have been coming to light around 

meter reading, around toll roads, 

around tax relief on vehicles coming 

into the UK, for example from Europe. 

So I think one of the things that the 

mobile industry has now understood 

is that the growth of the machine-tomachine 

market is going to be great. If 

we are going to help the wireless 

machine-to-machine market to accelerate 

and to take off, then we have to 

start rethinking our business models 

based on the longer term benefits of 

dealing with the machine-to-machine 

markets. Some of those benefits are 

around one contract for between five 

and ten years, so there’s very little 

Interview 

M2M section 

churn on the actual network, which is 

sometimes seen as a bit issue for a 

mobile operator. 

The second point outside the 

contract length is the actual revenues 

are going to be consistent across that 

time and if anything would be incremental. 

So you know that you are 

going to have a certain amount of 

revenue coming in from a machine 

because it operates in a consistent 

manner. 

Third is the reduction in customer 

services. In order to service a normal 

subscriber, you have to let them know 

the new offers, know what they are 

entitled to, encourage them not to 

leave the actual network, make sure 

that you hold on to those customers. 

Machines don’t have that level of 

emotive attachment. 

Besides the provision of the 

wireless connection, is there 

any space for T-Mobile to provide 

specific added-value services 

that will also benefit in the long 

term? 

There absolutely is. Start to think 

about meters, for example, as a 

resource. If they have a SIM in the 

meter that is taking back readings to 

the power company, it does one of two 

things. It will enable the power 

company to reduce its operational 

costs and also to tailor the usage of 

electricity on a per household basis. It 

enables them to meet legislative 

requirements, but it also enables them 

to then add further value-added services, 

such as their entry into management 

systems and possibly remote 

surveillance solutions. Because once 

that SIM is there, it can act as a 

communication hub, a concentrator 

for all sorts of different applications 

around domestic and commercial 

premises. That represents a value not 

only to us as a mobile operator, but 

also to the power utility. ❚ 


31

Commercial Vehicle Telematics - Telematics Update

You also want an ePaper? Increase the reach of your titles

Delete template?

Save as template?