NEW YORK, Feb 25 (Reuters) - General Motors Co haschosen AT&T Inc to provide high-speed wireless service forits 2015 car models, dropping its long-term provider VerizonWireless.
OnStar - best known for connecting drivers to live operatorswho provide directions or summon emergency help after anaccident - will start using AT&T in its 2015 models, which go onsale in mid-2014.
The companies will discuss their partnership on Monday atthe Mobile World Congress show in Barcelona.
GM is hoping to boost car sales and OnStar subscriptions byexpanding its offering to include advanced applications such asvideo streaming for passengers for most of its Chevrolet, Buick,GMC and Cadillac models.
It is also looking into possibilities such as wirelesslysending customers alerts about possible engine problems orsending data or even video from a car to the owner's mobiledevice to show what's going on next to the vehicle in case ofany problems, according to Phil Abram, a GM executive director.
For their part both AT&T and Verizon Wireless, a venture ofVerizon Communications and Vodafone Group Plc,have been ramping up efforts to expand their services beyondcellphones as they seek to continue growing in a market in whichmost people already have smartphones.
GM said that Verizon Wireless, which has been the company'swireless provider since 1996, would still support OnStarservices for all existing GM vehicles and any new models thatcome out before the 2015 models are launched.
Abram declined to say exactly why the company was switchingto AT&T but said that "AT&T's vision with what we want to dowith the connected vehicle was very highly aligned."
Abram also declined to comment on the terms of the deal withAT&T or how the service will be priced. OnStar has more than 6million customers in the United States, Canada and China andcharges $18.95 a month for its most basic service, or $28.90 amonth for its premium package.
AT&T already has wireless deals with car makers includingFord Motor Co and Nissan Motor Co.
But the OnStar agreement is its biggest deal so far,according to Glenn Lurie, president of the AT&T division that isdedicated to expanding wireless connections beyond phones.
"Economically we're very very happy with the deal," he said.
Lurie would not provide pricing details for the service butthe OnStar subscribers could potentially add their car to anAT&T shared data plan, which allows customers to add multipledevices to a single account.
"You could see the car be another device in your portfolioof devices," Lurie said.
Such an arrangement could help improve the popularity ofconnected car services, according to Forrester Research analystCharles Golvin said.
"It could lower the barrier to adoption if a customer couldadd their car as another device on their AT&T plan rather thanhaving to opt in to OnStar and pay a separate bill every month,"Golvin said.
Lurie said he expects roughly 20 million new cars sold from2015 to 2018 to have wireless connections, citing an analystestimate that roughly half of U.S. cars would be connected by2016.
Vodafone (VOD)