Volkswagen a winner as EU set to favour wifi over 5G - draft

Kapsch TrafficCom AG

19/10/2018 12:02

* EU showdown pits wifi against 5G for connected cars
    * VW, Renault gain edge over Daimler, BMW
    * Commission likely to announce draft rules next month

    By Foo Yun Chee
    BRUSSELS, Oct 19 (Reuters) - The European Commission is set
to approve and set rules for the use of wifi in cars, giving
Volkswagen  VOWG.DE  and Renault  RENA.PA  who have pursued this
technology the edge over Daimler  DAIGn.DE  and others who
invested in rival 5G networks.
    The EU executive is expected to announce draft legislation
on the issue next month for feedback from EU countries and EU
lawmakers before adopting it next year.
    The decision is a crucial one for both carmakers and
telecoms operators and equipment makers as the market for
internet connected cars is expected to be worth billions of
euros a year.
    While connected cars have been available for some years in
Europe, the Commission wants to speed up their deployment and
encourage cooperation between manufacturers to make safer and
more efficient cars via legislation.
    Such legal protection and regulatory-approved technical
specifications would also reassure car buyers and auto insurance
companies, advantages which cars equipped with a rival
technology would not have.
    The latest draft of the proposed rules seen by Reuters paves
the way for cars equipped with wifi called ITS-G5 to hit the
roads in Europe while regulators will review the rules at the
latest three years after its implementation to take into account
any new technologies.
    This could mean that the alternative 5G standard called
C-V2X could take months or even years to win approval.
Supporters however expect a shorter timeframe.
    
    RIVAL CAMPS
    The issue has pitted two powerful groups of carmakers,
chipmakers and telecoms providers against each other. Connected
cars are seen as lucrative targets for online retailers and
advertisers.
    Volkswagen, Renault, NXP  NXPI.O , Autotalks and Kapsch
TrafficCom  KTCG.VI  are pushing ITS-G5, which they say has been
sufficiently tested and fully standardised in European
government-funded projects.
    However, 5G backers include big names like Daimler, Ford
 F.N , PSA Group  PEUP.PA , Deutsche Telekom  DTEGn.DE ,
Ericsson  ERICb.ST , Huawei  HWT.UL , Intel  INTC.O , Qualcomm
 QCOM.O  and Samsung  005930.KS . They say that C-V2X has wider
application and is future-proof.
    Backers of C-V2X say it can hook up to both cars and devices
in the surrounding environment, with a wider range of
applications in areas such as entertainment, traffic data and
general navigation where data speeds or signal failure are less
of an issue.
    Fans of ITS-G5, which is primarily for connecting cars to
other cars, say it is better for time-critical communications
involved in crash avoidance and object navigation.     
    The EU executive declined to comment on the draft. It said:
"Currently the Commission is looking into the best European
framework to promote the right investments in this area and
ensure interoperability between the existing systems and the
development of new technologies."
    In effect, the decision puts the region at loggerheads with
the United States and China which see C-V2X, using cellular
networks, as the way forward.
    Some EU countries such as Spain, Sweden, Finland and Norway
had called for a postponement of the proposed rules because of
the diverging views on the topic.
    Following intense lobbying, France, which supports the
wifi-based technology, came up with a compromise clause which is
now under discussion.
    Its proposal, seen by Reuters, would force the Commission to
revise the rules in less than 12 months if a new technology is
approved. The paper also calls for all involved parties to
cooperate to ensure a level playing field between different
technologies.
    Lobbying group and C-V2X supporter 5GAA said that is not
enough.
    "A legislation confined to a wifi based communication would
send a negative message about Europe's commitment to 5G, and is
contrary to the objectives of the Commission's own 5G action
plan, which aims to promote early deployment of 5G along major
transport paths," 5GAA said.

 (Reporting by Foo Yun Chee; additional reporting by Eric
Auchard in London; Editing by Elaine Hardcastle)
 ((foo.yunchee@thomsonreuters.com; +32 2 287 6844; Reuters
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