The real reason for continued free internet... telemetry.

[Kraken]

I believe the free data is a combination of things:

1/ 3G vs LTE - AT&T likely has excess capacity on their 3G network and Tesla was able to negotiate a good deal.
2/ Tesla does want telemetry. In fact, their service model almost depends on it at this point.
3/ Tesla/AT&T have not yet developed the software to 1/ charge for a data plan 2/ Maintain telemetry and nav access to those who opt-out of the data plan but block everything else. Writing this software costs money. Make it free to the consumer and Tesla can save the labor and use those savings to help pay for the data. Plus the opportunity cost- those software developers can go work on other things. Like #4..
4/ Revenue potential from applications and targeted advertising will easily cover the costs of the data

I understand the sensitive to advertising. If it's done wrong, it could be a disaster. But think about the number of applications we have today for smart phones that are free to the consumer but are paid for via advertising. Many of those same apps have a paid version which removes the advertising. Why not use the same model? Instead of Apple keeping 30% of everything, Tesla does.

The superchargers represent a huge opportunity for targeted advertising that I believe can be done in a tasteful way. The NAV system will soon be able to route across the super charger network. It knows your ETA. It could easily have a detail screen that shows you the restaurants and attractions near by. Click here to make a reservation for 7:15pm - because we already know you're going to arrive at 7:10pm. Click here for a 10% coupon for the Men's Warehouse - that is only good for the next hour.

A

No need to grade your own posts. Let the rest of us critique it.... :tongue:

 

[Stoneymonster]

The superchargers represent a huge opportunity for targeted advertising that I believe can be done in a tasteful way. The NAV system will soon be able to route across the super charger network. It knows your ETA. It could easily have a detail screen that shows you the restaurants and attractions near by. Click here to make a reservation for 7:15pm - because we already know you're going to arrive at 7:10pm. Click here for a 10% coupon for the Men's Warehouse - that is only good for the next hour.
A

Regardless of the merits of advertising, app stores, revenue splits, targeted coupons, etc., I just have one thing to say:

Writing the software for and maintaining and testing the above is difficult, expensive and time consuming. I'd rather Tesla spend their time making better cars.

 

[gpetti]

My theory - they calculated that building the billing system would cost as much as four years' subscriber fees...

Whatever the case, it is greatly appreciated!

How does this work in canada? I.e. Which provider?

 

[techMology]

How does this work in canada? I.e. Which provider?

AT&T is the provider, however, you're roaming on Rogers.

To test this, someone in Canada go to What Is My IP Address? Lookup IP, Hide IP, Change IP, Trace IP and more... from the browser. Something in the US (Dallas maybe) will pop up, and the IP range will belong to AT&T Mobility.

 

[techMology]

My theory - they calculated that building the billing system would cost as much as four years' subscriber fees...

Whatever the case, it is greatly appreciated!

I am a telecommunications OSS/BSS sales engineer for one of the world's largest network equipment providers. Prior to this job, I helped manage and operate Canada's largest MVNO.

I can say with high confidence this isn't it.

 

[mitch672]

Regardless of the merits of advertising, app stores, revenue splits, targeted coupons, etc., I just have one thing to say:

Writing the software for and maintaining and testing the above is difficult, expensive and time consuming. I'd rather Tesla spend their time making better cars.

Exactly. They'd have to hire people/team to develop the billing system/maintain it, etc. There are not enough cars to probably even cover those expenses, and they likely have not developed it yet.. They now have 4 years (until near the end of 2017, free data plan ends 12/31/2017), to develop a billing system/software/pricing and negotiate with carriers. They are also using the data as well, and I do wonder if they are selling it to Google for the "waze" app, my iPhone Waze data looks eerily close to the Google map traffic data on the Model S screen

I think there is also a clue about the end date, a little before/close to the launch of the Gen 3? they'll certainly have a data plan ready by the time Gen 3 launches.

 

[techMology]

Exactly. They'd have to hire people/team to develop the billing system/maintain it, etc. There are not enough cars to probably even cover those expenses, and they likely have not developed it yet.. They now have 4 years (until near the end of 2017, free data plan ends 12/31/2017), to develop a billing system/software/pricing and negotiate with carriers. They are also using the data as well, and I do wonder if they are selling it to Google for the "waze" app, my iPhone Waze data looks eerily close to the Google map traffic data on the Model S screen

I think there is also a clue about the end date, a little before/close to the launch of the Gen 3? they'll certainly have a data plan ready by the time Gen 3 launches.

Why does everyone assume Tesla would need to build a billing system?

There are tons of vendors and solutions at all price levels more than willing to sell them a billing system.

 

[AmpedUP]

mpbruin108 is correct, I think. As a business owner, I would LOVE to know the detailed habits of those buying cars for 100K + . The telemetry from these vehicles is priceless. I don't need to even throw ads to these drivers. I just want to know where they are going...and build high-end retail to greet them at journey's end.

 

[mitch672]

Why does everyone assume Tesla would need to build a billing system?

There are tons of vendors and solutions at all price levels more than willing to sell them a billing system.

probably because they are going to mine the telemetry data, so most likely it will always be billed directly to Tesla, and Tesla would likely sell you the data plan, who knows, maybe they'll bundle it with a yearly service plan as well (likely).

Tesla tends to do everything in house. On the Model S owner's page, we can buy the service plans, extended warranty, etc, so they have a place for owners to "buy" service from them already.

 

[Panacea]

No need to grade your own posts. Let the rest of us critique it.... :tongue:

LOL.

 

[NigelM]

On the Model S owner's page, we can buy the service plans, extended warranty, etc, so they have a place for owners to "buy" service from them already.

Not in Florida. :frown:

 

[brianman]

Not in Florida. :frown:

On this frown we completely agree.

 

[techMology]

probably because they are going to mine the telemetry data, so most likely it will always be billed directly to Tesla, and Tesla would likely sell you the data plan, who knows, maybe they'll bundle it with a yearly service plan as well (likely).

Tesla tends to do everything in house. On the Model S owner's page, we can buy the service plans, extended warranty, etc, so they have a place for owners to "buy" service from them already.

You don't need a billing system to mine telemetry data. In fact, xDR (detail records) won't tell you much in Tesla's case. That's what a billing system does - rate CDR and xDR information and turn it into billable items. It has little to do with location data (especially in the packet world; circuit world/session world is and was different). Tesla will get much more information by polling the car at regular intervals (I'm assuming Visible Tesla works this way). Also, pretty sure I've watched more than one interview where Elon says they don't store location information (which is the most an xDR would tell you, in addition to session start/stop times).

Perhaps our understanding of "billing" systems is different. I'm applying the telco definition.

Tesla doesn't really do everything in house. Outside of the stampings of aluminum which make up the structure of the car, and the engineering of the vehicle, component manufacturing is outsourced to OEM suppliers. The most obvious example is the steering wheel. Tesla also isn't a software shop, which is basically what a billing system is, so why would they build it in house?

Having a front end UI to customize is little effort. Adding another button to "purchase data plan" isn't a big deal and doesn't require a ton of development. The backend is far more complex. I would argue if they already have the concept of purchasing something via the centre console cooked, calling another API via a new button is a piece of cake.

Here's how an arrangement between Tesla and their service provider (At&t) would work: service provider sends Tesla a big monthly bill, and usage records (for reconciliation purposes). Tesla pays the bill.

This is the same way it works for any other large corporate account.

If Tesla wants to charge for data, it's a simple matter of taking that large AT&T usage record, running it through their billing system, rating it (depending on what customer has chosen what package), and then sending out bills (or bill notifications) and charging any pre authorized cards or accounts.

 

[SeminoleFSU]

My theory: Telemetry data is another profit center. They sell it to NSA

The NSA would just take it

 

[mitch672]

techMology, you're wrong about Tesla. They have injection molding machines, die stamping, welding robots, paint shop etc. sure, they buy steering wheel mechanisims and control stalks from Mercedes, they buy brake calipers, etc, as does any auto mfr. They make as much as they can, if the cost is lower and not a standard off the shelf part they can buy for less money than mfr. Tesla manufactures more than most auto mfrs, that's for sure. As far as being a "Software shop" they developed the center console OS and programming, it was not "farmed out", they wrote it and are responsible for it. They also perform final assembly & testing of the battery pack, even if they buy some of the components from other mfrs. BTW, they wind their own AC induction motors, and assembled the inverter as well. a lot of the Model S is made right their in Fremont...

we use standard web browsers to the owners portal, its not typically done on the center console. We are also talking about $70-$110K cars here, if they choose to have 4 years of a data plan included, great, it just adds more value to the car, and one less expense for owners (to complain about), it's all part of their evil plan for world domination

 

[techMology]

techMology, you're wrong about Tesla. They have injection molding machines, die stamping, welding robots, paint shop etc. sure, they buy steering wheel mechanisims and control stalks from Mercedes, they buy brake calipers, etc, as does any auto mfr. They make as much as they can, if the cost is lower and not a standard off the shelf part they can buy for less money than mfr. Tesla manufactures more than most auto mfrs, that's for sure. As far as being a "Software shop" they developed the center console OS and programming, it was not "farmed out", they wrote it and are responsible for it. They also perform final assembly & testing of the battery pack, even if they buy some of the components from other mfrs. BTW, they wind their own AC induction motors, and assembled the inverter as well. a lot of the Model S is made right their in Fremont...

we use standard web browsers to the owners portal, its not typically done on the center console. We are also talking about $70-$110K cars here, if they choose to have 4 years of a data plan included, great, it just adds more value to the car, and one less expense for owners (to complain about), it's all part of their evil plan for world domination

I didn't mean to imply they don't do ANYTHING, just that a lot of components are OEM'd. Carpets from Mexico, comes to mind. The seats aren't made in Fremont, nor are the windows, the wheels, tires, the battery cells (for now), the majority of the dash, the LCD components, etc... Just like any other modern automotive manufacturer. I doubt they make a significant percentage more themselves than anyone else , but I'm happy to be proven wrong!

The centre console runs Linux, so they didn't write that. Writing applications on top, sure, they did that. No small feat, to be sure, but it's no billing system. And therein lies my point. I get Tesla wanting to build a custom "car OS" and owning that development in-house. Makes total sense. But a billing system? Why on earth would they put their already strained resources on a custom billing system no consumer will ever see? It doesn't make sense.

 

[mitch672]

But a billing system? Why on earth would they put their already strained resources on a custom billing system no consumer will ever see? It doesn't make sense.

That's the point, they don't need to worry about it now for 4 years.

They don't need to write anything, in reality, this is a pure guess here, but they like "annual" billing, from what we've observed so far. All they'll need to do is to add an option to pay for the data plan annually, or likely there will be a discount if prepaid for 2, 3 or 4 years, that's how the service plans work now. You can have no service plan (you pay $600 at your annual service), or prepay for 4 years for $1,900 ($475/year when paid at once).

I can see them just having a checkbox on the service plans "include yearly data plan", for xxx, and I'm sure there will be an ala carte option as well, or decline the data plan, in which case they just need to disable it in your car. By default, all Model S's ship with the data plan enabled, and new ones are now coming with 4 years included.

That's hardly a "billing system" in the traditional sense, I doubt it's going to ever be a monthly bill that is sent or charged to a credit/debit card, that's just not how they operate.

 

[techMology]

That's the point, they don't need to worry about it now for 4 years.

They don't need to write anything, in reality, this is a pure guess here, but they like "annual" billing, from what we've observed so far. All they'll need to do is to add an option to pay for the data plan annually, or likely there will be a discount if prepaid for 2, 3 or 4 years, that's how the service plans work now. You can have no service plan (you pay $600 at your annual service), or prepay for 4 years for $1,900 ($475/year when paid at once).

I can see them just having a checkbox on the service plans "include yearly data plan", for xxx, and I'm sure there will be an ala carte option as well, or decline the data plan, in which case they just need to disable it in your car. By default, all Model S's ship with the data plan enabled, and new ones are now coming with 4 years included.

That's hardly a "billing system" in the traditional sense, I doubt it's going to ever be a monthly bill that is sent or charged to a credit/debit card, that's just not how they operate.

Then I think we've been in violent agreement all along!

To me, that's not a billing system. What you describe (which is what I think they would do also) is more akin to an additional item in their existing product catalog, which, they clearly have (the designer is basically a product catalog, in a software sense). It shouldn't be a lot of effort (or money) to add a simple annual connectivity plan.

I think their focus is elsewhere, and for the return on investment, there's no point in charging. Also, as a product manager, it's a nice little differentiator against my competitors. Tesla already has larger margins by comparison to its peers.

 

[xdguo]

make sense!

Was just thinking about today's free internet announcement. While certainly a huge perk for us the end users, the real benefit is to Tesla. Think about it. Tesla is collecting a goldmine of real-time telemetry data. Everything aspect of your Model S, charging times, range, wh/mile, HVAC settings, battery degradation, and even when and where you are driving is being collected by Tesla. They are paying for the internet anyway to upload this data so it's really not much additional cost to give us web browser, slacker, and google map access. By the time Model E is released, Tesla will be tracking 100,000 to 200,000 Model S and Model X that are actually on the road. No other manufacturer will have anywhere near this amount of data or it's level of moment-by-moment detail. This will ensure that the Model E and the Tesla Supercharger network has the edge over the competition. As long as Tesla can ensure privacy of this data, seems like a win-win for us and Tesla.

 

[howardc64]

I'mguessing techMology's assertion it isn't the billing system complexity is probably the case. In the days before smartphones, contents didn't all go through a computer company's cloud infrastructure like they do now (Apple, Google). Contents like ring tones were produced by third parties and each carrier presented the "store" on their phones. Carriers would need a system bill/pay these aggregated contents separately from one another. It seems like carriers needs to aggregate multiple content sources would be a natural force as the phones screen got bigger (therefore better UI to select contents). Of course then smartphones came long and contents got all centralized by computer company's clouds. Carriers just go back to voice, text, and data But I have to imagine carriers may still be delivering some content or constantly finding ways to. In addition, large part of the world isn't even on smartphones yet. Carriers there are likely still up selling contents individually supplied by third parties.

Anyhow, back on topic, why continued free internet? Below is an article on AT&T's Tesla involvement. Here are some clues in the article

- quotation is from VP in AT&T's emergning technologies group.
- they (AT&T) suggest its early and pricing models aren't clear. Heck, even value proposition isn't clear.
- OnStar is switching over to AT&T's LTE service. OnStar is a a branded service that have captured some customers based on a safety proposition. So consider this "matured business segment"
- they (AT&T) hint at consider all types of new usages.. including pay per time window. They have these types of cellphone plans now.
- they (AT&T) said they are exploring a bifurcated billing model. Telemetry billed to car manufacturer. Internet hotspot to end user.

So what is Tesla business for AT&T? probably Emerging Technology Driven by lots of technology early adopters. Evaluate what people like... find a value proposition, figure out what to charge for it. And given the minuscule number of Tesla cars compared to the number of smartphones. It really a tiny blip on their capacity and limited development investment to explore future business. If they start charging now to this little market, they might sour the consumer's taste buds before they even figure out what people like. So I would imagine AT&T cut Tesla a great bundle deal. Its not like there isn't another aggressive GSM carriers out there

I would imagine AT&T like to try lots of different type of services... hotspot per their stated example (would need 4G now ). Tesla's team is probably the limit here. They should always be racing to build the next sequence in their Moore's law (Roadster->MS->MX->ME)

ATT launches $5/day tablet data plan, powers Tesla's wireless services - FierceWireless