LBS -- From Killer App to Killer Enabler

September 5, 2005
Share

Sharing is Caring

_Given declining profitability in core voice business, wireless network operators (WNOs) have searched for the "killer application" to drive enhanced services revenues.In the past, many vendors and industry analysts have promoted location-based services (LBS) as the contender, but this positioning has detracted from the true power of location. Today, a consensus is forming around a different view: LBS is not a killer application; it is the "killer enabler" of existing and new wireless services.This consensus represents a sea change in the industry that will plot LBS on a more successful course.

Now, with network infrastructure and next-generation handsets featuring larger color displays, built-in cameras, increased memory, removable storage, and robust operating systems, and business and consumer demand for enhanced services on the rise, LBS is finally emerging from being over-hyped to presenting compelling reasons for adoption.In this light, a strong value proposition can be constructed around LBS that addresses the WNOs' twin business challenges of increasing average revenue per user (ARPU) and reducing customer churn.WNOs can achieve these objectives by enhancing existing services with location, and introducing new location-based services.

Enhancing existing wireless services
The easiest opportunity for WNOs to monetize LBS is to enhance existing voice and data services.Three existing services - directory assistance, roadside assistance and messaging services - are good examples of this trend.

Enhanced directory assistance.Also known as 411, directory assistance is one of the highest-margin services provided by WNOs.The goal of location enhancement is to provide a more convenient service. Knowing the location of a caller expedites service delivery, while providing the potential to deliver value-added information services (e.g., driving directions or mobile concierge offerings, like points of interest searches or current traffic conditions).Directory assistance is basically just 411 from the user's perspective, but LBS serves as its killer enabler, making it a more compelling and efficient service.

Enhanced roadside assistance. Roadside assistance is the type of service drivers expect to be location enabled.On-board or in-vehicle roadside assistance automatically sends help directly to the location of a damaged or inoperable vehicle.Now a shift from GPS-based navigation built into automobiles to personal navigation built into handsets has begun.Sophisticated location-enhanced roadside assistance offers useful on-the-road services, such as providing distances and directions to gas stations, automobile repair services, or motels, to both drivers and passengers.These value-added services appeal to business and consumer users alike.

Enhanced messaging services.Another application that is made more desirable when enabled with location is text messaging.Location is irrelevant when participating in a chat room on the Internet or instant messaging from a computer.However, when people are text messaging with friends at 10 cents per message from their mobile phones, they want to interact with others who are nearby.To this end, friend finders and "mobile dating" are becoming very popular in Europe, as demonstrated by the success of location-enabled chat applications. With the addition of location to existing messaging services, daily short message service (SMS) traffic has soared, resulting in substantial increases in ARPU.

Delivering new location-centric services
After enhancing existing voice and data services, WNOs can find additional success with location by creating new services, such as dynamic traffic alerts and "family minder" services.

Dynamic traffic and weather alerts.
In addition to familiar alerts such as news updates, sports scores, stock prices and weather reports received on text-messaging-enabled mobile phones, many WNOs worldwide are beginning to offer location-enabled dynamic traffic alerts to their customers.In survey after survey, traffic information has always ranked highest among the data wireless subscribers want.With a typical service, drivers can specify their routes and when they would like to receive traffic updates.Travelers can then alter their routes and plans in response to real-time traffic reports for their particular route and schedule, saving themselves time, fuel and frustration.

Family minder services.A twist on friend finders is the "family minder" service that helps care givers keep track of family members.Nothing, of course, can guarantee the safety of a child or an elderly relative or the ability to find a lost person.However, location-enabled personal services can help maintain ties and provide some peace of mind.These services are not only powerful, but also truly useful.Whenever I present the idea of a family minder service, people in the audience tell me that this is something they would pay a premium for because they can clearly see how it would make their lives better.

Creating business services with value
Locations-based services are not only enabling the development of services for consumers, they're also contributing to the launch of applications specifically targeted at small- to medium-sized businesses.These businesses see the value of knowing where their people are, communicating instantly with them, and responding more effectively to their customers - but they don't want to spend the capital required for massive back-end integration projects.

With location-enabled mobile resource management (MRM) or field force automation, businesses can locate, communicate and manage their mobile workforces in real time, reducing service response times and improving customer satisfaction.Many WNOs, particularly in Spain, Germany and other European countries, have begun to recognize MRM as a key differentiating service they can offer to small- and medium-sized companies in a wide range of industries.

MRM gives these business customers the same advantages as larger enterprises, but without requiring a capital investment in new IT infrastructure.MRM integrates seamlessly with existing networks and equipment, enabling these businesses to communicate with mobile workers through SMS on their handsets, and to produce reports on worker status for distribution to other business units.

Multiple location technologies on the horizon
While LBS often is focused on wireless cellular communications, several other location-determining services have arrived or are on the way, including 802.11 or Wi-Fi, RFID and WiMax.

Initially, the 802.11 or Wi-Fi networks and RFID systems will offer location-based services, and a location will be determined based on the access point to which a user is connected.Wi-Fi and RFID technologies provide a simple mechanism to enable location because their coverage areas are very small and, therefore, no special location calculation is needed to offer basic services.Such services may include different types of asset tracking, employee presence and location information services, and campus map displays, for example.
The majority of such applications will be designed for large organizations because Wi-Fi and RFID have already been deployed in the enterprise.Applications will eventually be developed with these technologies to target the consumer space.However, due to their large coverage areas, wireless metropolitan access networks will require some mechanism to further refine location to provide effective services.

LBS and worldwide expansion
Location-based services are expected to grow at a fast clip elsewhere in the world, even though there are significant differences between US and international wireless markets.In some ways, certain countries and entire regions have an advantage over the US due to later development of technological infrastructure, which has resulted in a more cohesive underlying network.Then again, some are at a distinct disadvantage. Europe, for example, is behind the US in infrastructure development because its carriers do not have to comply with government-mandated technologies such as E-911, that allows emergency services to identify the physical location and the phone number of a caller.

In addition to location-enabled text messaging and MRM applications, new international location services include a shift from GPS-based navigation built into automobiles to personal navigation built into handsets.All of these services have been dependent on wireless carriers providing GPS-enhanced handsets and networks, which is finally happening.

The Next Wave of Location-enabled Services
Although prediction often ends up being a fool's errand, the temptation to make an educated guess at the next big thing is too great to resist. It seems relatively safe to say that the next killer location-enabled services for consumers, others than those already discussed, will most likely be location-aware communities bringing people together who share common needs or desires such as social communities, political communities and gaming communities.There is no end to the human need to form communities with like-minded individuals; the only aspect that changes is the technology that facilitates the building and maintaining of those communities.We have seen glimmers of this in location-enabled mobile friend finders and messaging services.

Gaming is similar in that people want entertainment and are always looking for new forms.Location-enabled, mobile gaming takes players from fixed consoles out into the real world, which would seem to be a huge step in the right direction.Many location-enhanced games have already been developed around the world.Their widespread adoption depends on carriers having the appropriate network and pricing structures in place.When that happens, watch out world: the killer enabler will have struck again.

Share

Sharing is Caring


Geospatial Newsletters

Keep up to date with the latest geospatial trends!

Sign up

Search DM

Get Directions Magazine delivered to you
Please enter a valid email address
Please let us know that you're not a robot by using reCAPTCHA.
Sorry, there was a problem submitting your sign up request. Please try again or email editors@directionsmag.com

Thank You! We'll email you to verify your address.

In order to complete the subscription process, simply check your inbox and click on the link in the email we have just sent you. If it is not there, please check your junk mail folder.

Thank you!

It looks like you're already subscribed.

If you still experience difficulties subscribing to our newsletters, please contact us at editors@directionsmag.com