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
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
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.