Company Trend Analysis - Hertz Deal Key To Telefonica's LatAm M2M Expansion - MAR 2017

BMI View : Vehicle telematics is a low-risk revenue-diversification strategy for most telecoms operators, especially those unable to leverage convergence-based services. Lacking a wi reline network in Mexico, Telefo nica is under pressure to develop its mobile business, but its M2M capabilities have long been underutilised. A new deal with Hertz proves, however, that the company is working hard to address this issue.

Telefonica Mexico has secured a deal to provide telematics services to the hire car company, Hertz. The latter will use Telefonica's Smart M2M platform to manage its fleet, collecting key data from the business cycle and maintenance processes to increase operating efficiencies and manage resources on a real-time basis. As Hertz is embarking on a wide-ranging digital transformation that will leverage many aspects of the Internet of Things (IoT), we believe the deal will have a trickle-down impact on Telefonica operations across Latin America and allow it to develop a wider range of value-added services that will help it win more clients in the telematics space over the longer term.

Earlier in January 2017, Hertz contracted Orange Business Services to use IoT applications and solutions to transform its new hourly rental service in Belgium, France, Germany, Italy, the Netherlands, Spain and the UK. Orange has only a token presence in Latin America and therefore Hertz must look for alternative suppliers in the region. With operations in 14 Latin American markets, including Mexico, Telefonica would be an obvious choice as a digital transformation partner.

M2M Expansion Has Been Lacklustre So Far
Telefonica Mexico: M2M And Data Revenue Trends
Source: Telefonica

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