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Cars with embedded connectivity to reach 200m by 2025, with 5G adoption set to soar

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A new study from Juniper Research has found that the number of vehicles with embedded connectivity will reach 200 million globally by 2025; rising from 110 million in 2020.

One of the main beneficiaries of this growth will be mobile operators. The incorporation of eSIMs (embedded SIM) into the vehicle will enable operators to leverage their existing network infrastructure to claim $3 billion of additional service revenue by 2025, by acting as an M2M (Machine-to-Machine) connectivity provider.

eSIMs to benefit operators and automotive OEMs

The new Juniper Research study, Operator Connected Car Strategies: Future Opportunities & Market Forecasts 2020-2025, predicts that eSIMs will act as the catalyst for future operator service deployments in the connected car space. Smaller form factors and higher physical durability of eSIM modules will attract automotive OEMs to the new standard over existing traditional SIMs.

The research urges operators to leverage wholesale agreements with automotive OEMs to create steady revenue streams from the connected car market. However, operators must ensure the provision of management services, either directly, or via partnerships with established IoT platforms, to attract high spending automotive OEMs to their networks.

Research co-author Sam Barker remarked: ‘As the adoption of embedded SIMs increases, operators’ success in the market will be determined by which platforms can offer the most comprehensive value-added services to automotive OEMs.’

5G to provide monetisation challenges for MNOs

The research predicts that there will be 30 million vehicles globally with embedded 5G connectivity by 2025. As embedded 5G connectivity becomes more prevalent in vehicles, it anticipates that 25% of cellular data generated by vehicles will be attributable to 5G-capable vehicles by the same year, despite representing only 14% of the installed base of vehicles with embedded connectivity.

As a result, operators will need to charge a premium for 5G automotive connections, in order to account for the additional network traffic generated by 5G-based automotive traffic.

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