Aug/Sept 2007

TomTom, which is probably the world's best-known supplier of satellite navigation systems, is to acquire fellow-Dutch company Tele Atlas, the map producer and supplier that provides most of its digital mapping. The deal, which is due to be completed by the autumn, values Tele Atlas at around £1.2 billion.

Most satnav specialists buy in their mapping from third-party cartographic specialists, of which TeleAtlas and Navteq are probably the best-known names. Tele Atlas in fact supplies other satnav sellers, and TomTom has said it will honour existing third-party contracts following the acquisition. How it will regard the prospect of supplying rivals in the longer term is not clear.

TomTom is already said to account for up to 40 per cent of Tele Atlas's business, but in addition to supplying other satnav specialists, Tele Atlas also supplies desktop mapping users such as Google, and TomTom will presumably want to preserve such business. It has already said the Tele Atlas identity will be retained.

TomTom says it sees particular opportunities in updating maps through user feedback, and has already launched a service called TomTom Share, which allows satnav users to update their own maps and report the information automatically to TomTom. Control of its map supplier would enable it to make this a much more seamless process, as well as giving it a ready-made source of highly up-to-date mapping information to sharpen its market edge.

 

Navteq, Tele Atlas's highest-profile rival, remains independent of any specific satnav supplier.