Connected Vehicle Developments Heat up in the Southeast Asian Region: What Opportunities Lie ahead for CSPs?

Over the past few months, many Electric Vehicle (EV) manufacturers and connected vehicle solution providers have announced their plans to expand their footprint in the Southeast Asian region. Some of these activities are detailed below:

• Hozon New Energy Automobile (December 2023): The manufacturer has started automotive production at its first overseas factory based in Thailand.
• Hyundai Motor Company (Dec 2023): The South Korean automotive manufacturer opened its new IONIQ Lab in Bangkok, Thailand, which is intended to foster greater innovation and collaboration with domestic partners in the country. 
• Huawei (March 2024): The Chinese technology giant released its “HMS for Car” solution that is tailored to the Thai market, introducing features such as an intelligent voice control that supports the Thai language, as well as the integration of a database consisting of local Points of Interest (POIs).
• GAC Aion (April 2024): The Chinese EV manufacturer announced plans to construct a second Southeast Asian factory in Indonesia, following its first factory that is still currently being built in Thailand.

As a result, ABI Research has maintained strong expectations for EV growth in the Asia-Pacific region, forecasting that the sales volume for passenger EVs will grow from 9.2 million in 2023 to 24 million in 2030 (at a Compound Annual Growth Rate (CAGR) of 11.2%).

While the above activities are welcome news for local consumers, these developments also present attractive opportunities for other players in the EV ecosystem, such as EV infrastructure and connectivity providers, to capitalize on. Based on industry estimates, connected vehicles are expected to generate up to 25 Gigabytes (GB) for data per hour, and when multiplied by the large volume of EVs expected on the roads, will represent a significant increase in data consumption in the country. This is positive news for local Communication Service Providers (CSPs), which have seen their Average Revenue per User (ARPU) for consumers stagnate or even decline in the face of increasing competition.

Beyond connectivity for vehicles, connectivity solutions will also be needed for EV charging stations. Existing smart charging stations are mainly deployed using wired, Wi-Fi, or 4G connectivity. This enables basic smart charging functions to be performed, such as payments. Moving forward, there are also opportunities to upgrade these existing connections to 5G to support faster, more efficient, and intelligent operations. The collaboration between EVPassport, Newlab, and Verizon in the United States is a possible example of how 5G can support such intelligent operations. In Malaysia, the partnership between EDOTCO and EV charging solutions provider ChargeSini also demonstrates how telecommunication infrastructure can be leveraged to support EV charging needs.

While the EV industry is still an emerging market, CSPs need to start implementing the right strategies and capabilities to build a technological advantage over their competitors. To this end, ABI Research recommends that CSPs should consider the following:

• Developing the Right Solutions/Services to Support the Requirements of Connected Vehicles: There are myriad ways in which CSPs can offer services to support connected vehicle operations. For example, 5G Network Slicing (NS) services can be offered to ensure guaranteed bandwidth and latency connectivity. Bundling services, such as with mobile and fixed broadband, can encourage buy-in from consumers. Additionally, having an extensive network of edge compute sites can also help reduce latency to support critical operations.
• Establish Close Partnerships with the EV Ecosystem: CSPs should develop strong and flexible business models and frameworks with EV manufacturers to ensure seamless connectivity and interoperability with in-vehicle solutions and equipment. In some cases, the joint promotion of selling EVs with managed connectivity services (i.e., managed by the manufacturer and not the consumer) could be a potential option as well. For example, there have been previous collaborations, such as the one between Bharti Airtel and Matter Motor Works, with the former’s Internet of Things (IoT) solution integrated with the latter’s electric motorcycles.
• Integration with New Technologies: For example, establishing partnerships with satellite providers can be a competitive advantage for CSPs to ensure always-on connectivity for vehicles, even when in remote areas and outside the range of existing terrestrial networks.
• Continuously Innovate: CSPs should continue to innovate—using their strong expertise on connectivity as a baseline—to deliver solutions that can best address the needs of the market. Some possible options include partnering with data analytics companies to offer a one-stop solution for connectivity and data analysis.

All in all, with the growing Gross Domestic Product (GDP) across Southeast Asia, ABI Research foresees strong potential of the connected vehicle market in the region. Domestic CSPs should capitalize on this opportunity quickly to establish an early and strong market position in the EV industry.