AT&T Says 2 Million Customers Using Connected-Car Service

AT&T Inc. gave its first look at the performance of the connected-car and Digital Life home security units, two new growth businesses for the largest U.S. phone service provider.

About 2 million U.S. cars are using its wireless network either through wholesale or retail contracts, AT&T said in a filing. That number includes about 500,000 new connected cars added in the third quarter. The Dallas-based company also has about 140,000 subscribers using its home security service, which debuted in April 2013. AT&T didn’t provide a revenue amounts for either business.

Looking for growth beyond sales of wireless services to phone and tablet customers, AT&T has targeted home monitoring and Internet-connected cars as potential $1 billion sales opportunities. In-vehicle technology is the top selling point for 39 percent of car buyers today, according to a study that consulting firm Accenture released in December.

“The connected-car numbers are strong but not surprising since luxury carmakers are bundling connectivity in with the price,” said Roger Entner, an analyst with Recon Analytics LLC in Dedham, Massachusetts. “The question is: how will the medium and low-end car buyers respond when they have to pay for the service,” Entner said.

On Digital Life home monitoring, Entner gives AT&T a passing grade by at least keeping up with the growth rate of the home security industry.

“It’s a good start, very encouraging, but not off-the-walls growth,” Entner said.

AT&T also provided an update on its wireless business. The company reiterated that monthly wireless subscriber defections were 1 percent or lower in the third quarter and that about 50 percent of customers are opting for phone financing to purchase new phones.

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