Network operator Sprint has struck a five-year agreement to support usage-based insurance (UBI) services and telematics solutions on behalf of Himex.
Himex (Scottsdale, AZ, USA) – which claims to offer “the fastest and most complete route in the industry to the implementation of UBI” – appears to have chosen Sprint (Overland Park, KS, USA) largely because of its ongoing commitment to support 2G services, in contrast with larger operators AT&T (Dallas, TX, USA) and Verizon Wireless (New York City, NY, USA).
“We chose Sprint as our CDMA carrier partner providing us with a common infrastructure across personal and commercial lines,” said Neil Fishenden, senior vice president of business development for Himex.
“Sprint’s investment in its all-new 3G and 4G LTE network, along with their commitment to maintaining 2G service, has led us to jointly deliver insurers with flexible and scalable solutions to meet the demands of an increasingly data-reliant industry today and in the future,” he said.
2G technology looks more appropriate for M2M applications that require low throughput and generate little average revenue per user, with equipment costing far less than for 3G and 4G networks.
Nevertheless, many companies have been turning to 3G and 4G systems in order to “future proof” their services – with both AT&T and Verizon Wireless planning to shut down their 2G networks in coming years.
In a sign of that shift, hardware company Sierra Wireless recently began providing automotive modules for use on the LTE network of Verizon Wireless.
In the short term, however, this represents an opportunity for the likes of Sprint and T-Mobile (Bellevue, WA, USA), which say they plan to continue supporting 2G services.
Regardless of their commitment to the technology, the CDMA-based systems of Sprint may also be an attractive option for M2M companies, according to Alex Brisbourne, the president of MVNO Kore Telematics (Alpharetta, GA, USA).
“The CDMA network is not only reliable but cost-effienct – carriage costs per megabyte are probably 60% of the cost of GSM for a user,” he said in a recent discussion with M2M Zone.
Himex says its platform covers the entire UBI value chain and supports the full range of insurance company transactions – from quoting and sales to first notice of loss and claims settlement.
“Working with Himex to deliver complete, end-to-end UBI solutions to insurance companies is just one more way we’re leveraging our insurance and telematics expertise while extending the value of our network,” said Kimberly Green-Kerr, regional vice president of Sprint.