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Verizon Networkfleet Acquires Telogis and Fleetmatics

Posted on August 11, 2016 · Posted in fleet tracking software, Telematics

Competition in the GPS telematics market shrinks with Verizon’s purchase of Telogis and Fleetmatics

Second quarter of 2016 sees the biggest acquisition within the GPS telematics industry with Verizon’s Networkfleet purchasing privately owned Telogis for an undisclosed amount and publicly traded Fleetmatics for $2.4 billion or $60 per share. Once both transactions are finalized, Verizon Networkfleet will be poised to be the largest GPS telematics provider worldwide.

According to Forbes.com, the purchase of Telogis gives Verizon Networkfleet instant access to automobile manufacturer relationships built through Telogis’ proprietary cloud based telematics technology. Telogis, through OEM contract agreements, has been able to have their technology integrated into new vehicle onboard computer systems from such manufacturers as General Motors (primary investor), Ford, Mack, Volvo, Isuzu, and Freightliner. This will give Verizon large market share to compete against its largest competitor, AT&T, in the fleet and enterprise “connected car” segment.

Verizon Communications Inc. agreed purchase of GPS vehicle-tracking company Fleetmatics Group Plc, will position the telephone giant deeper into the automotive-technology market, according to Bloomberg. In acquiring Fleetmatics, Verizon will build on a small but growing presence in the commercial fleet management segment, said John Butler, an analyst at Bloomberg Intelligence. The company previously bought Hughes Telematics in 2012 and Telogis Inc. in June 2016 to marry its nationwide wireless coverage with commercial-fleet monitoring to offer services such as route and fuel optimization.

Verizon’s Telematics division posted $400 million in sales in the first half 2015, with the business growing about 25 percent year-over-year, making it one of the carrier’s fastest-growing segments, according to a Bloomberg Intelligence analysis. Fleetmatics would have added 40.5 percent to the segment’s revenue in the first half based on second-quarter analyst estimates.

“One of the most developed Internet of Things markets right now — and fastest evolving — is the automotive market,” Butler said in an interview. Verizon, which manages a large number of vehicles of its own for FiOS service installation and repair, “understands this business very well,” he said.

“Verizon’s being smart by targeting the vehicle market — and on the commercial side,” Butler said.

With several large players in the GPS telematics market being purchased by larger, cellular network providers, the industry appears to be a strong, profitable sector. As the industry contracts, it allows smaller, distributor style GPS providers, such as EquipTrac, to remain competitive with low cost, basic functionality options.