- Autonomous cars could net telecom carriers $1.3 trillion annually, Morgan Stanley estimates.
- It could be a bigger revolution than the smart phone.
- Still, 5G faces a unique set of challenges before it will revolutionize our commutes.
Back when smartphones were first introduced, mobile data was less than one-tenth of carrier revenue.
Now that smartphones have all but taken over the world, Morgan Stanley is betting that an even bigger disruption will come from the introduction of data-connected autonomous vehicles.
"Our forecasts of AV data consumption imply a revolutionary change for Telco services – much like the arrival of the smart-phone in 2007," a team of analysts said in a report on the intersection of autonomous cars and telecommunications companies published Tuesday.
What's more, selling data for self-driving cars could net carriers $1.3 trillion annually, the bank estimates, saying it would be a "sea change" for their revenue streams.
Of course, much of the connected-car universe can't fully thrive without a full rollout of the hotly anticipated 5G data network, something Sprint says its merger with T-Mobile will help to accelerate.
5G, short for fifth generation, is slated to replace the current 4G LTE network with faster speeds and much less latency. It's designed to support a plethora of devices that have come online — everything from TVs to toasters — since 4G was first rolled out roughly a decade ago, without slowing down due to network crowding in busy populated areas.
Lightning-fast networks are still years away, unfortunately. As Business Insider's Antonio Villas-Boas reported last month, the way carrier infrastructure is handled in the US — through local zoning authorities — creates a tricky landscape for revolutionizing a national infrastructure network. Nevertheless, they will play a key role in the future.
"In a world where there is full autonomy, mobile networks will need to play a crucial role in the ecosystem," Morgan Stanley says. "Vehicle connectivity to mobile networks can address crashes that cannot otherwise be prevented by current technology (using camera and sensors) or vehicle-to-vehicle platforms. In short, network-connected vehicles are not restricted by line-of-sight limitations. Essentially, data on accidents, congestion/traffic jams, road blockages could be transmitted via 5G."
Join the conversation about this story »
NOW WATCH: What will probably happen with the North and South Korean peace treaty