In an investment call that will see the creation of a strategic partnership aiming to capture global share in a potentially lucrative market, software-defined connected vehicle services provider Cubic Telecom has gained a cash injection of approximately €473m from SoftBank Corp for a 51% equity stake.
Cubic Telecom is a global provider of connectivity services to automotive, transportation and agriculture original equipment manufacturers (OEMs), and in explaining the potential for its new partnership, it quoted McKinsey & Company research that calculates 95% of new vehicles sold globally will be connected by 2030, and connected car use cases alone could deliver $250bn to $400bn in annual incremental value for the ecosystem.
The company’s Platform for Application & Connectivity Enablement (PACE) is said to reflect the shift towards software-defined services and away from the legacy of hardware.
The platform is designed to allow OEMs to monitor, manage and update many aspects of a vehicle or device in real time, globally, via mobile connectivity – meaning vehicles can be tailored to the requirements of a country or region while complying with different regulatory mandates. Vehicles and devices can receive new features and functionality over the air (OTA) throughout their lifetime, which improves performance, safety, comfort and value to ensure the best user experience.
Since launching its industry-first connectivity platform in 2016, Cubic Telecom has grown rapidly, and through agreements with more than 90 mobile network operators (MNOs), the company currently connects more than 17 million vehicles in over 190 countries and regions, adding 450,000 new vehicles a month, which Cubic expects to increase exponentially over the next five years.
With its investment, Cubic said it will form a strategic global partnership with SoftBank, and pioneer the future of software-defined connected vehicles and other high-value internet-of-things (IoT) assets by harnessing the power of global connectivity platforms.
The company is also developing services that use its platform’s analytics, and as cellular vehicle-to-everything (C-V2X) connectivity continues to be transformative, Cubic said its partnership will play a leading global role in developing new services and accelerating innovation.
After the investment closes, Cubic Telecom will become a consolidated subsidiary of SoftBank and Barry Napier will continue to lead Cubic Telecom as CEO and board member, and Daichi Nozaki, SoftBank’s senior vice-president responsible for its global business, and two other SoftBank appointees, will join Cubic Telecom’s board. Three board seats will continue to be held by Cubic Telecom’s existing shareholders, including CARIAD (Volkswagen Group) and Qualcomm.
SoftBank has already been providing global IoT connectivity services, mainly in Asia-Pacific markets, in this new strategic partnership with industry leader Cubic Telecom. SoftBank will be able to make a full-fledged entry into the rapidly growing IoT markets for connected cars and software-defined vehicles, giving it access to new revenue generating opportunities.
Going forward, SoftBank and Cubic Telecom said they will also explore ways to generate synergies and develop new services, such as using satellite and stratospheric-based Non-Terrestrial Network (NTN)-based offerings that provide connectivity to vehicles and IoT devices in areas that cannot be reached by traditional ground-based networks.
“In line with our Beyond Japan strategic growth initiative, we are extremely pleased to be teaming up with Cubic Telecom to make a full-fledged entry into the fast-growing market for high-value IoT asset connectivity,” said SoftBank president and CEO Junichi Miyakawa. “With its global leadership position, we are convinced Cubic Telecom is the best partner for this opportunity, and we look forward to building connectivity platforms for next-generation social infrastructure.”
Napier added: “Today’s announcement marks a significant milestone for our team and stakeholders, and we’re excited to partner with SoftBank to pioneer the future of software-defined connectivity.
“The focus on software rather than hardware means manufacturers can increase the value of a vehicle or device by adding new functionality, over-the-air, which will improve safety, comfort and performance. This, alongside the opportunity AI presents, will open up new collaborations and business models. The opportunities ahead of us are endless.”