Bengaluru: Government-owned telecom firm Bharat Sanchar Nigam Ltd. (BSNL) has decided to ink a deal with Tata Motors for a first ever machine-to-machine (M2M) communications pact.

The tie-up envisages that the telco will supply embedded SIM cards that will help transform the automaker’s vehicles into smart cars, according to a report in the Economic Times.

Here, in this context, smart cars are not the ADAS (advance driver assistance systems) or autonomous vehicles that are being widely talked about and experimented on, but more on the lines of being IoT- enabled.

Smart cars will help automobile makers to offer better consumer experience through new-age products with real-time connected features over a wireless network for traffic information, weather forecasts and even facial recognition.

M2M technology enables communication between wired and wireless devices using sensors and applications. Such sensors and applications are placed in modern infrastructure projects like smart transportation, smart cities, smart grids, smart homes and smart healthcare.

According to the report, BSNL chairman Anupam Shrivastava said the telco has already supplied Tata Motors with five lakh SIM cards while another 10 lakh will be supplied within a year. And in that year, Tata Motors is expected to convert models such as Tiago, Hexa and the recently-launched SUV Harrier into smart cars with the help of the BSNL alliance.

BSNL, which has 113 million mobile subscribers, has been exploring new enterprise business opportunities with rivalry in the sector intensifying following Reliance Jio Infocomm's entry and the consolidation led by Vodafone and Idea.

M2M can create an Internet of Things (IoT) ecosystem where cars, machines and home appliances can be plugged to the Internet, creating a platform for 5G networks to gain traction. BSNL sees sales of 50 million M2M SIM cards with 5G capabilities over next year, mainly for the automobile and home automation sectors. An industry expert pointed out that this could result in a business potential of $170 million (Rs 1,200 crore).

Car companies are also eyeing fast mobile data delivered over 5G networks to build and improve features.

India’s passenger vehicle market is dominated by Maruti Suzuki, Tata Motors, Hyundai India and Mahindra & Mahindra, which collectively have a share of about 85%.

"Automotive and transport have been an early adopter of IoT and telecos are tapping the emerging revenue streams from fleet management, navigation and fuel management and positioning services," Prashant Singhal of EY is quoted as saying, adding that telecos should tap into the $4 billion IoT ecosystem by 2021.