MADRID, Feb 6 (Reuters) - Spain’s Telefonica and insurer Generali have launched a car-tracking device designed to reduce the cost of insurance by monitoring driving habits.
The product, called Pay As You Drive, is part of Telefonica’s efforts to expand into alternative technologies, particularly machine-to-machine (M2M) services for the healthcare and automotive sectors.
The device will monitor how many miles customers drive, whether they stick to speed limits, what time of day they usually drive and where they go.
Telefonica said that careful young drivers could save about 40 percent a year on car insurance premiums by using the device. Customers will have access to data on their driving and the location of their car through a mobile app.
Other operators, including Vodafone, Deutsche Telekom and China Mobile, are also looking to new technology to offset declining revenue from traditional avenues such as voice calls and text messages.
Telefonica said last year that revenue at its digital arm would increase 20 percent a year to generate 5 billion euros ($6.8 billion) by 2015.
It sees Telefonica Digital as a major growth driver as domestic revenues are drained by increasing competition and 26 percent unemployment in its home market.