ANALYSIS: Vodafone puts M2M in the fast lane

15 July 2014 | Kavit Majithia


As Vodafone continues to invest billions across the world in its mobile and cable TV network, it has been easy to overlook the small but significant advancements it has made with its M2M division.

Its announcement to acquire Italian in-car security and telematics company Cobra Automotive Technologies for $196 million may seem miniscule compared to the €7.2 billion it will pay for Spanish cable operator ONO, but Vodafone claims the tie-up will herald the creation of a new global provider of connected car services.

Cobra provides a range of security, telecoms and vehicle tracking services for the automotive and insurance sectors, with analysts tipping the sector to be the next big developer in M2M after energy solutions.

Vodafone’s Will Cameron, senior communications manager, told Capacity that the deal “confirms our strategy of expanding our M2M capability out beyond connectivity”.

He added: “We can see that with the number of high-profile manufacturers promoting connectivity in their vehicles, M2M is becoming embedded within the auto industry.”

The company was keen to stress its commitment to developing a range of new applications in the sector, with a focus on establishing partnerships with other companies to support the innovations.

Research analyst firm Yankee Group said the decision to acquire Cobra fits that purpose entirely, considering both companies’ synergistic footprints.

Cobra has operations across Brazil, China, France, Italy, Japan, South Korea, Spain, Switzerland and the UK.

Ryan Martin, associate analyst at Yankee Group, said that the acquisition gives Vodafone access to a range of companies to add to its M2M portfolio as a result.

“The carrier’s acquisition of Cobra has a lot to do with the target’s geographical footprint,” he said. “Automakers such as Audi, Bentley, Ferrari, Mercedes Benz, Nissan, Porsche and Tesla are just a few of the companies among the telematics vendor’s customer list.”



He added that the acquisition will be tailored towards increasing Vodafone’s market share in developing a suite of engineer-to-engineer (E2E) services to enable connected vehicles. “Focussing on core markets is one way the MNO may be able to achieve this without overinvesting or under delivering,” said Martin.

The industry and carriers on the whole have encountered a range of issues in developing M2M solutions, and Cameron said it was important to take into account the differences that exist in innovation between varying industries.

“It is important to understand the challenges facing each separate industry, and to appreciate how and where M2M and the Internet of Things can make a positive change,” he said. “Understanding, partnership and delivery will form an ideal foundation for developing in this area.”