16 August 2012

Verizon Communications, the part-owner of America’s biggest mobile phone network, is to acquire Hughes Telematics, one of the United States’ leading vehicle tracking specialists, in a deal valuing the company at $612 million.

Hughes Telematics dates back only to 2006, but has roots in the same organisation that has emerged as Hughes Corporation, a giant in electronics and satellite communications.

Hughes Telematics offers a range of products for car and truck owners and fleet operators, and has original-equipment deals to supply various motor manufacturers such as Mercedes-Benz and Volkswagen.

The acquisition is seen by some as an early indication that mobile network operators are starting to see "the connected car" (and by implication truck) as an important future revenue source.

It is understood that Hughes will be run at arms’ length from Verizon, at least to begin with, though it is not clear what will happen to its existing links with other mobile network operators.

Neither company is a major force in the UK, though Vodafone has had a long-standing involvement in Verizon Wireless, the joint venture that operates the mobile phone network, in which it holds a 45 per cent stake.

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