Earlier this year, General Motors announced its plans to integrate AT&T 4G LTE connectivity into its vehicles. The technology, which will become available in vehicles starting next year, will allow a plethora of connectivity possibilities. And we are just now beginning to learn about the business side of the deal between The General and Ma Bell.
During GM’s Q1 2013 earnings call, General Motors CEO Dan Akerson said that the automaker is in negotiations with AT&T to receive about $20 for every customer who signs up for 4G service — a deal that sounds very similar to the partnership General Motors has in place with SiriusXM until later this year.
The reasoning behind the plan is simple: AT&T can gain subscribers from owners of the 4G-equipped GM vehicles, turning cars into devices on AT&T’s network. And because of that, the telecom will share some of the revenue with The General. In addition, AT&T might also be able to display ads on the infotainment screens of GM’s vehicles — resulting in two forms of revenue for Big Blue: 4G service subscriptions, and a form of in-car advertising.
After the call, General Motors communications issued a statement that pretty much said that Akerson’s remarks were premature: “During the call, some specifics were offered up regarding our partnership with AT&T and the new business model opportunities it may create…. These comments did not disclose the entirety of both sides of our agreement with AT&T and we are not prepared to discuss those particulars at this time.”
The GM Authority Take
So, Akerson got a bit ahead of himself by discussing deals that may not be set in stone just yet. If only he did that about upcoming models…
Nevertheless, we’re some somewhat averse to being bombarded by ads in our cars, but are intrigued by the tertiary benefits of such a program. For instance, we can imagine a scenario where the ads subsidize the cost of the monthly service subscription.
Would you be willing to get a few ads in your car to have a smaller monthly service bill from AT&T? Sound off in the comments.