News Column

GM Sets Pricing for In-Vehicle Wireless Service

May 12, 2014

Nathan Bomey, Detroit Free Press

Buyers of new General Motors vehicles will soon have the option of adding an extra monthly charge or a onetime fee to connect laptops, smartphones and tablets to wireless hotspots.

The automaker today revealed the pricing structure for high-speed AT&T Internet packages in more than 30 of its 2015 model-year vehicles in the U.S. OnStar subscribers can get AT&T 4G LTE packages for as little as $5 per month, GM said.

Someone who doesn't subscribe to GM's OnStar service, which provides safety and security services, can pay anywhere from $10 per month for 200 megabytes of data to $50 per month for five gigabytes of data.

GM is the first automaker to introduce high-speed Internet capability to a majority of its vehicles.

"What I'm curious to see is who ends up actually purchasing the service?" Morningstar analyst David Whiston said. "I would think the biggest consumer of this would be families who would want to download movies in the backseats for kids. I could see those kids consuming a lot of data really quickly."

New vehicle buyers will get three months of free data (up to three gigabytes). Owners can activate a WiFi hotspot or use the service to download new apps onto the car's infotainment system, such as iHeartRadio and the Weather Channel.

"Our customers will also have easy-to-understand data plans to let them tailor a connected car around each owner's lifestyle," said Mary Chan, OnStar president.

Under former CEO Dan Akerson GM negotiated a deal with AT&T in which the automaker gets $20 for every vehicle owner who activates the service and a percentage of the wireless fees paid to the service provider.

The telecommunications industry views cars as a vital new revenue stream. AT&T smartphone customers can add GM vehicles to their monthly bill. GM owners who don't subscribe to AT&T phone service can pay separately.

"Will the consumer think that's a better deal than relying on their phone's data plan?" Whiston said. "It's a new source of revenue that, for now, is rather unique to GM. It's a nice way to differentiate GM's vehicles from not just Ford, but Toyota and Honda too."

An alternative option are onetime payments, which range from $5 for 250 megabytes over one day of service to $200 for 10 gigabytes over 12 months.

The 2015 Chevrolet Malibu mid-size sedan will be the first vehicle to get the new service, followed by 15 other Chevy models, four Buicks, six GMC models and eight Cadillacs.

Contact Nathan Bomey: 313-223-4743 or Follow him on Twitter @NathanBomey.

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