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Telecommunications

Vodafone Changes Off-Board Navigation in Europe

20 June 2011

Off-board navigation applications have been a successful revenue driver for carriers in North America for some time. But in Europe, these types of applications have had to face hurdles like geographical limitations to individual markets and carrier data plan limitations.

Vodafone Germany is set to change how its customers can access mobile data not only while on the go within Germany but also throughout all of Europe. A shift in data usage policy by European carriers will provide new opportunities for navigation applications and location-based services throughout the continent.

New Pan-European Data Plans
Vodafone Germany just announced that its customers with a flat rate data plan now can utilize international Vodafone networks as part of their monthly subscription. Data-roaming-free Internet usage is available for 22 international networks. For countries outside the Vodafone network coverage, prices also have been lowered.

The new program takes effect June 1 and will be available for customers with data plans such as SuperFlat Internet, SuperFlat Internet Mobil, SuperFlat Internet Festnetz or SuperFlat Internet Allnet. Vodafone is requiring users to recommit to their data plan or sign a new contract before the international coverage is included. Customers not wishing to recommit to their contract have the option to access international data with ReiseFlat Data, which costs 5.99 euros per month and can be canceled anytime.

Data now also can be accessed in 38 additional European countries with ReisePaket Data Europa, which allows 25 megabytes (MB) of data every 24 hours at 2 euros; previously, 5 MB of data was available for 5 euros. Seven-day data access costs 5 euros now and includes 50 MB.

Off-Board Navigation
The introduction of this new pricing structure will make the use of off-board navigation applications in Europe a more attractive option. Data roaming charges have been mentioned for years as one of the main hurdles for increased adoption on the continent.

The new data plans mean that, while Vodafone is charging a premium fee for the service, the usability of the service for Vodafone Germany customers is increased dramatically. Now users can navigate when they arguably need the service most—away from home. Navigation then can lead to increased data usage overall, because users do not need to worry about data charges while conducting local searches on vacation or while on a business trip.

Blow for Connected PNDs
The announcement by Vodafone is another blow for the makers of dedicated portable navigation devices (PND). In Europe, connected PNDs have been seen as a valid option for users looking for real-time information while away from home. Even though TomTom took one year to release connected PNDs with its LIVE services enabled throughout Europe, competitors like Navigon released devices and services with connectivity throughout Europe. At least for a trial period, users of these devices had the opportunity to gain experience with always-connected navigation without further subscription or costs associated with the device. Real-time services usually center on traffic updates, local search and weather forecasts.

The data plan situation in Europe provided connected PNDs with a perfect niche to target. No other connected navigation solution could provide seamless access to real-time information while protecting the customer’s wallet. Furthermore, carriers had been unwilling to move far away from their established business model of charging high premiums for data access away from the home market.

While companies like TomTom and Navigon are working on bringing connectivity to an increasing part of their device portfolio, the conversion rate from users on free trials to paying subscribers and then to live services has not been as high as hoped for. IHS iSuppli forecasts the share of connected PNDs in Western Europe to reach 41 percent by 2014, up from 16 percent this year, and for sales to climb from 2.2 million in 2011 to just over 4.6 million in 2014. At the same time, off-board navigation subscribers are forecast to be over 6.8 million in 2011 and will grow to just more than 15 million by 2014.

Ahead of the Pack
Vodafone Germany is jumping ahead of the pack with its announcement of Europe-wide data usage as part of its regular Internet flat rates. Applications, which previously had been limited by costly mobile data access, will not see an increase in usage; off-board navigation applications mainly were the ones that had to contend with this geographical limitation to service. Now, however, Vodafone Germany customers are free not only to use the carrier’s branded solution but also to utilize third-party applications more fully.

A main competitor in the off-board navigation space to profit from changes in data plan policies like this is Google. Without fears of high data bills, users are now able to utilize Google services more completely, relying on the search company not only for mobile searches but also for navigation to the resulting locations as well as additional location-based services like check-ins.

Lastly, the Vodafone announcement hits the heart of the connected PND makers in their push to provide a borderless connected navigation experience, one free from data roaming charges and high surprise bills. Now users with navigation applications on their handset can do the same thing, without buying another device.

This announcement has the potential to cause significant disruption in the navigation market in Europe in the coming months.

Find Out More > IHS iSupplis Automotive Portal – Infotainment



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