"Comes with data" business model for TomTom SatNav

I just heard a radio advert for satnav vendor TomTom, for a device which comes with a year's free access to its over-the-air alerting service called HD Traffic. This is delivered via a GPRS module in the device - based on what appears to be a two-sided "comes with data" wholesale deal with Vodafone.

As well as traffic alerts, it apparently uses Vodafone's cell-ID capabilities to assist in location fixes - although it uses Google's local search rather than the operator's for added-value capabilities.

The promotion compares with the previous cost of around £8 per month after a free trial period. It appears to be a proper "comes with data" offer, in that there does not appear to be a need for a contract or subscription with the operator - the customer just purchases the device outright, and the manufacturer contracts for the connectivity with the operator, or one of its resellers.

"Your FREE trial of TomTom LIVE Services works straight out of the box and starts automatically when you first turn on your device, therefore you do not need to register to claim for the offer. From 9^th June onwards all devices will be updated to include 1 year FREE LIVE Services"

Technically, as this uses 2G rather than 3G, it's not a "mobile broadband business model" - but it certainly points the way to possible future enhancements, using HSPA modules instead. One of the variables that remains unclear is just how fast we will see a move from 2G to 3G for this type of embedded capability.

One risk to the operator is that a shift to 3G might see a sudden explosion in data traffic with minimal additional revenue - and also the risk that poorer 3G coverage reduces usability for such truly mobile products. However, fallback ability to GPRS, coupled with rate-limiting for the 3G radio could solve that. A satnav with (say) 384kbit/s or 1Mbit/s would still be massively useful - it needn't run at full speed. In a vehicle, it could also be equipped with decent antennas and receivers to reduce impact on cell capacity.

"Comes with data" is one of the new broadband wholesale business models identified and forecast in the new report I worked on with Telco 2.0 - full details are available here.