In the United States, the mobile market is largely saturated. Aside from a steady base of brand new users coming of the age to own a phone and the occasional carrier-jumper, growth is hard to come by in such a market. While looking to increase the revenue per user is a good strategy to combat growth, a ceiling exists in the form upping prices for customers and making your service a worse value than a competitor. Thus, many a carrier has taken to looking outside of the traditional spaces for sources of revenue. AT&T has bought up DirecTV, Sprint is leasing out network equipment, and Verizon, perhaps the biggest wireless player outside of the wireless field, may be moving into fleet management hardware and software in another attempt to diversify their offerings.
On top of buying up Yahoo for $4.8 billion to work in tandem with AOL and bolster their media and advertising presence, Verizon recently bought out Telogis, a company that helps to outfit vehicles with smart technology, and has announced plans to buy Fleetmatics, a GPS vehicle tracking company. The acquisitions make sense, since fleet management software and hardware could easily leverage Verizon’s network. Real-time reporting of accidents, reckless driving, route deviation and other such incidents via Verizon’s network are just one possibility.
Verizon’s press release announcing their intent to buy up Dublin-based Fleetmatics also states that Verizon Telematics already operates in 40 countries worldwide, which means that Fleetmatics will not only open up new markets for them, but also strengthen their worldwide market position in fleet management in the markets where they already operate, especially markets where Fleetmatics also operates. It’s worth noting that a new federal law in the US makes it mandatory for driver hours to be logged digitally, setting the stage for the fleet management market to find its way into just about every sector that uses commercial vehicles, from government to retail. Rival carrier AT&T is also in the fleet management game, and may do some acquisitions of their own in the near future, according to analysts. One analyst from S&P Capital IQ says that Fleetmatics is unlikely to be Verizon’s last acquisition in the space.