In the last two years, the trend toward lower costs has accelerated in telematics. All 3 major components of all telematics platforms have seen cost reductions: 1) Airtime: New, lower cost networks have been launched by the major U.S. cellular carriers, lowering messaging costs while maintaining connection quality; 2) Platform: Cloud computing, led by Amazon, has powered a reduction in computing and data storage costs, while 3) Lower cost, high performance modules and chipsets have enabled newer hardware to launch cost-effectively.
The result of all this innovation is that Fleet Management is now much more affordable, and more accessible to small and mid-sized field services fleets.
How Much Does Telematics Cost?
A number of factors influence the overall total cost of telematics adoption. These include: Hardware costs, Installation costs, Cost of upkeep, and Monthly Airtime or Usage Costs. Ideally, your telematics solution provider should provide hardware at low or no cost. The market leader in Telematics for Fleet Management, Verizon Connect, still charges more than $100 for each device it sells. Additionally, you should consider whether the telematics solution you are considering requires professional installation. If so, this can run in the neighborhood of $200 for each GPS device installed.
Telematics also requires some monthly service cost. This can include cost of upkeep, and a monthly airtime cost from the vendor. For example, Verizon Connect charges more than $25 per month for each device sold.
Most telematics service providers sell devices based on annual or multi-year contracts. This enables them to lock in customers. Often, a low initial cost is offset by a lock in to 12-month, 24-month, or 36-month terms. While the long-term contract is good for the vendor, it is never good for the business fleet manager. Even the best looking solution may not keep up with the times, and may not continue to improve its feature set. Contract flexibility enables you to switch out with ease. Here’s an example of the reviews vendors don’t want to see. http://momentumiot.com/verizon-connect-very-very-bad-reviews/
Extra Considerations: Sunset, Cables, Access Fees, API restrictions
Beware the fine print! There are some pitfalls you want to avoid, which could add to your total cost of ownership of Telematics solutions.
Business Fleet recently covered the danger of network sunsets in detail: https://www.businessfleet.com/337275/telematics-from-research-to-implementation. The bottom line? Don’t get stuck with hardware that runs on a network which is due to sunset. What is a network sunset? It’s when major cellular carriers decide to stop supporting devices on an older network standard. A few years ago, when 2G networks were sunset in the U.S., thousands of customers with tens of thousands of devices found out that not only would their devices stop working, but that they would have to pay to replace them! If your telematics vendor is selling you a 3G device, you should be asking hard questions about now.
If you are currently running 3G devices, you might consider migrating newer vehicles, or vehicles which are rolling out of contract, to newer GPS devices on 4G. Obviously, you should also consider a telematics provider which does not lock you in to any technology, and which will replace its devices as networks evolve.
Require your telematics provider to ship a cable with every device, free of charge.
We’ve seen “setup” or “network access fees” added to contracts. Don’t pay extra fees.
As your business fleet gets bigger, you may want to integrate GPS telematics with a workforce management solution. Don’t get told at that time that your vendor will restrict access to their API. Remember, it’s your vehicle data, on their server. You already paid them. Demand API access to your data, so that you can integrate it into your larger dispatch and workforce management operations.