Verizon Telematics extends relationship with Mercedes-Benz

Verizon Telematics (NYSE: VZ) expanded its relationship with Mercedes-Benz, saying the mbrace Connect platform will be offered complementary for five years in all model 2016 and newer Mercedes-Benz vehicles.

Until now, the mbrace Connect platform was only available in high-end Mercedes-Benz vehicles. According to Verizon Telematics, Mercedes-Benz was the first automaker to offer its customers the ability to connect to their vehicles from a smartphone and this expansion is the next step toward Verizon Telematics and Mercedes-Benz's shared vision of making the automaker one of the most connected vehicle brands in the country.

Mike Peterson, vice president and general manager of the OEM business at Verizon Telematics, told FierceWirelessTech that Verizon Telematics has been Mercedes' telematics service provider since November 2009, providing the back-end services and wireless connectivity to its vehicles and live agent call center services.

Customers assume they're talking to Mercedes representatives, not Verizon. "We are really an extension of the Mercedes-Benz business, so everything that we do has to align" with the Mercedes-Benz brand, guidelines and how to interact with customers, he said.

Mercedes-Benz Connect puts the car maker in a leading position whereby every 2016 auto year vehicle going forward will carry a package of services for the customer that will be included in the price of the vehicle. Those services revolve around the ability to interact with the vehicle mainly through the smartphone (although it's also available via a website). Customers are able to lock and unlock doors, flash lights and sound the horns, among other things, and some will be able to remotely start their vehicle with mobile apps.

Customers are also able to remotely share diagnostic data with dealerships, solidifying the relationship between customer and dealer, and they'll be able to search and find points of interests. Some other services, like curfew and speed alerts, also are part of the basic package. All electric vehicles will get the ability to check the charge on the vehicle and remotely precondition the vehicle.

By structuring it like this, where the price is included with the vehicle, the two companies avoid asking the consumer to slap more fees onto their bills. Peterson said he could not reveal the specifics around the deal structure, but he did say that Verizon Telematics has been thinking about these issues with Mercedes for a number of years and trying to create an affordable solution for all three: Verizon, Mercedes and the customers.

By packaging services into the vehicles, it allows Mercedes to provide a value-added set of services to customers, who in turn will be motivated to enroll and activate the services. "This allows all these vehicles to be connected or 'on' the network, if you will," he said. If situations come up over the five years where Mercedes feels the need to update software in the vehicles, all these vehicles already will be connected and with the appropriate customer permissions, Mercedes will be able to remotely update software to the vehicles.

Of course, security is an ongoing concern. While some analysts fault Sprint (NYSE: S) for letting hackers remotely control the Jeep Cherokee featured in a recent Wired story, Sprint said its network was not at fault.

Peterson didn't comment on that specifically but said security is "bothering everybody today in the industry, whether you're an OEM, a wireless carrier or a telematics service provider. We work with Mercedes" and partner with them to address the security risks on a proactive basis, he said, with the ability to tap into the vast resources of Verizon and its expertise in cyber security. "It's an item on our agenda to continually monitor and watch and assess" and fix any security threats that might be out there.

Verizon also supplies telematics to Volkswagen of America and provides similar services for Mercedes-Benz in China. There's a third OEM but, by contract, Verizon is not allowed to talk about it.  

Verizon had a long relationship with OnStar over the years but General Motors switched to AT&T starting with 2015 year models. Verizon Communications closed its acquisition of Hughes Telematics in 2012, paving the way for Verizon Telematics.

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