Location Services Need Low Cost Enablers - Report

Mobile operators are forecasting major growth in revenues from high accuracy location-based services to almost US$12 billion by 2005 - but only if low cost mass market enabling technologies are in place to drive the market. Overall, operators forecast average annual revenues of US$12 per subscriber from location-based services in 2005 - growing to US$35 by 2008 - according to an operator survey by Cambridge Positioning Systems (CPS).

The company recently completed a series of workshops with leading operators from all over the world to explore current and future location-based service strategies. Collectively, the operators served over 30% of the global GSM subscriber market - in both established and emerging GSM markets. As a result of the workshop programme, 10 operators are now planning trials of CPS's Matrix location solution, which offers high accuracy for under US$1 per subscriber.

The main research findings were:

• demand for sub-100m high accuracy solutions is growing as operators seek to differentiate their service offerings in saturating markets - with operators now pushing for trials of new location technologies
• likewise, new market entrants are looking to high accuracy LBS as an immediate marketing advantage in the fight for customers
• however, while high accuracy location solutions will be the catalyst for location-based services, deployment costs must be extremely cost-effective if they are to kick-start mass-market LBS adoption
• Cell-ID based services have proved disappointing in terms of application innovation and consumer take-up
• corporate vehicle, fleet and workforce management will help drive early usage of high accuracy services in the corporate and SME market
• the major consumer market driver will be information services, with rapid growth predicted for personal and child safety services
• mobile gaming and m-coupons, cited as a strong growth areas in industry reports, will remain niche markets with slower than expected growth

CPS Chief Executive Chris Wade said: "We wanted to find out exactly what people are thinking right now about location based services. Through our business modelling workshops, we explored a range of scenarios for current and future services and all-important revenues.

"The results were very encouraging in terms of operators growth strategies but underline how the business model only works if enabling technologies are low cost."

Posted to the site on 14th October 2003