Location Based Services: Hype or reality?

Location-based services—whereby a user can get location specific information on his mobile, has been touted as the latest addition to value added services provided by cellular operators. Deb Mukherjee analyses the technology and says it’s a win-win situation for everyone concerned

Location Based Services (LBS) helps locate the precise geographical presence of the mobile device and provide services based on this ‘location’ information. Till date, location based services have not received the attention they deserved. But, believe me this is hot technology, and along with the technology of wireless application protocol, could be a killer.

Undisputedly, telecommunication has made our lives easier and drastically changed the way we do business. Consequently, this huge market attracted a plethora of mobile network operators looking for newer and even more novel ways to differentiate themselves from their rivals and boost profits. This paved the way for delivery of highly personalised services, and one of the ways of achieving this is through personalising mobile services based on the location.

One most obvious technology behind LBS is ‘positioning’ or ‘location’ technology. The most widely recognised systems include the global positioning system (GPS) and the cell sector method (CSM). GPS is a handset-based solution that provides higher accuracy but needs a different more costlier handset. Typically, it is possible to achieve 10-20 meters accuracy with handset-based solutions. CSM is slightly different. It is a network-based solution that is cheaper to implement but less accurate around 1000 meters particularly in rural areas where there are very few base stations. However, accuracy in the cell sector can be enhanced using different complementary technologies such as detection through signal strength.

In my view, LBS is possible due to three related developments. First, is the tremendous popularity enjoyed by mobile phones. These handsets have matured with many players in the field bringing out newer models and technologies in the device. Though WAP has failed to live up to its expectations, the hype that was created has encouraged hardware providers to provide WAP capability in their mobiles.

Secondly, we are seeing WAP itself maturing. The WAP Forum has already released the WAP 2.0 standards for public review. The new specifications include protocol stack support, WAP application environment, WAP push, user agent profile, wireless telephony application, external functionality interface, multimedia messaging service and pictograms. These new functionalities would enable WAP to be richer in the near future.

The third related development came through the means of Federal Communications Commission (FCC) regulations for E-911 (E for extended). Phase 1 began a couple of years back with wireless operators providing public emergency services such as a caller’s location and callback phone number. With Phase 2 the location requirements moves cell/sector levels and can locate a caller within 125 meters.

The deadline for the implementation of LBS was October 2001. With most major carriers in the US seeking more time to implement E-911, the relay time between the carriers and networks would take much longer than expected and would surprise me if its ready before the end of 2002.

In the final implementation, when it’ll be ready is anybody’s guess. The handset-based solution should provide an accuracy of 50 meters for 67 percent of the attempts and 150 meters for 95 percent of the attempts. However, for a network based solution, the accuracy is reduced to 100 meters for 67 percent of the time and within 300 meters, 95 percent of the attempts.

Though the intention of the FCC is to provide life saving emergency services, this can be a boon for advertisers and consumer goods distributors. The effort and money spent in this will create a good infrastructure.

I would be surprised if the ever-searching consumer goods distributors miss out on this opportunity for sales and advertisement. This may well become a totally new channel for consumer goods. In fact, I see this as another dot com gold rush. The only difference seems to be the high entry barrier. This would certainly discourage too many players unlike in the dot com age. Competition for this market may be among a few players. Location based service providers can earn sufficient revenues from advertisers, and a portion of this could be passed on to the customer through reduced rates.

The other possible scenario, that I envisage, is that a different breed of service providers would be providing the information while mobile service providers provide just the basic connectivity. In such a case, the role of the mobile service providers will be similar to that of the ISP.

Either way, distributors and advertisers may find a new channel for sales and advertisement. The shortcomings of dot coms may be overcome by more focused advertising. However, there is a word of caution here. We should understand that the potential revenue is different from the earned revenue. The bandwidth will continue to be a major concern. Distributors need to respect the privacy concerns of the potential customer. LBS or the information service providers should resist the temptation to throw in too many freebies. Investors should understand there is no oil gushing out and it would take time to realise the potential.

In the days to come, LBS will benefit both the consumers and network operators. While consumers will have greater personal safety, more personalised features and increased communication convenience, network operators will address discrete market segments based on the different service portfolios. It’s a win-win situation one would be a fool to ignore.

The author is CTO, Cognizant Technology Solutions. He can be contacted at Deb.mukherjee@cognizant.com