As 3G Sunsets, 4G LTE Future for Automotive GPS
At the turn of 21st century, automotive finance professionals lived through the sunset of second-generation (2G) cellular service and remember well that certain GPS collateral protection devices effectively became paperweights.
Today, however, after a steady drumbeat from most GPS providers and recurring updates from cellular carriers, fewer finance pros have felt any pain now that most U.S. carriers have shut down their third generation (3G) capabilities.
There are a few scattered reports of BHPH dealers across the country, mostly in or near urban areas, experiencing 3G devices going dark, leaving them unable to monitor or locate their valuable vehicle collateral.
“This has been the result of some small providers selling cut-rate 3G devices as a fire-sale, ignoring carrier deadlines for outdated technology,” said Bill Cheney, CTO and Managing Director of Procon Analytics, parent company of Advantage Automotive Analytics, a leader in the GPS for automotive finance marketplace.
John Hubler, Partner of Brumer Hubler IoT Group, said that it was understandable that some end-users of GPS devices would be confused when it comes to the technology that supports the devices. Customers, he noted, want a low-cost, reliable GPS device that will serve them for years. They do not want to have to learn the intricacies behind GPS satellites and cellular networks. Hubler should know. He has more than 30 years’ experience in the wireless industry, developing and implementing successful sales strategies for M2M/IoT verticals within the United States and global markets.
Cheney noted that shortly after Advantage formed in 2017, its founders, who had decades of experience in the marketplace, drew on that knowledge and experience and made it their mission to “replace outdated technology” and introduce a product line of all 4G LTE products.
“We continue to use our voice in this industry to explain to dealers and finance companies why 4G LTE technology will best serve their needs for many years to come,” Cheney stated.
Hubler agreed, observing that 4G LTE technology will remain the underlying standard serving the country’s IoT devices well into the 2030s, and likely beyond.
“The rollout of new 5G technology has gotten a lot of attention, as it will make things like downloading music, movies, and large files very, very fast,” Hubler said. “However, the deployment of 5G networks has been slow, and major carriers serve less than one-third of the population with 5G services today.”
Most importantly, Hubler noted that there is no need for 5G technology when it comes to IoT devices, such as GPS devices used in the automotive finance industry. Communication between a GPS tracking device and the Internet is more like sending a text message versus downloading a movie.
There are two takeaways from Hubler’s insights that are helpful to remember, Cheney added. First, today’s 5G technology for IoT devices is overkill; it would be “like using a firehose to water your house plants,” he said. Also, true high-speed, 5G-enabled GPS devices would be significantly more expensive, with very limited U.S. coverage for many months, if not the next two or three years.
Brian Tate, Director of Product Management for Advantage, noted that there are some vendors in the industry telling clients and prospects that 4G LTE technology is outdated and they need to be using 5G devices. These statements are simply inaccurate.
“They are either not knowledgeable about the technology or are being disingenuous,” Tate stated.
“If you want to ensure your asset of $25,000+ remains safely within your portfolio, 4G LTE is the technology you want,” Hubler concluded. “It was designed to track your vehicle and will be around for at least another decade.