GM Expects OnStar 4G LTE to Add $350 Million in Revenue By 2018
General Motors probably had the general sense that it had a winner on its hand when it announced OnStar 4G LTE with built-in Wi-Fi for its entire product portfolio. While they likely wagered that the new tech would be profitable, it even wind up exceeding original expectations.
According to GM chief financial officer Chuck Stevens, the automaker believes that it will generate more than $350 in profit from OnStar 4G LTE alone by the year 2018, calling the technology an “untapped, under-appreciated opportunity.”
Shopping for a New Vehicle? Check Out Current National Incentives
“Based on our plans today, which are still in the early stages of really taking advantage of this technology, we expect to see $350 million of profit improvement between now and 2018 specific to 4G LTE, and in our view, that’s just the beginning,” Stevens said at the Bank of America Merrill Lynch 2015 New York Auto Summit.
The rollout of OnStar 4G LTE will extend through markets including Europe and Mexico, and Stevens noted that a number of additional paid services will be available over the next several years to help boost profits.
AT&T is the data provider for the service, which ranges from $5 a month for 200 MB of data to $50 for 5 GB. GM not only gets a cut of this, but also a cut from any purchases made over the in-vehicle Wi-Fi.
Shopping for a New Vehicle? Benefits of Cadillac CPO Vehicles
News Source: Reuters