Location services back in vogue


15 Jun 2005

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Five years ago the notion of location-based services was touted as the way forward. However, little has happened since. But that is about to change since many of the elements are now in place and the market could grow from US$1bn at the end of this year to US$8bn by the end of 2010, claims Juniper Research.

Juniper Research estimates that tracking applications is currently the applications group in mobile location-based services (MLBS) generating the most commercial revenue and offering the greatest increase in average revenue per user (ARPU) for operators and service providers.

This is forecast to continue through to 2010. Juniper Research expects that the biggest growth in MLBS, in the short term, will be in corporate applications. This is because there is a clearer business case for corporate applications than for consumer applications and the corporate sector will pay for services that are seen to improve operational efficiency.

“There are still significant challenges for all participants in MLBS, but in the first half of 2005 the future for MLBS is looking much better than it did 12 months ago,” says Bruce Gibson, senior analyst at Juniper Research.

“2.5G and 3G network rollout is gathering pace all over the world. Positioning technology is rapidly maturing, business models are evolving and most crucially the user experience of MLBS is improving rapidly. More and more mobile operators are finding that MLBS is a group of services that their customers expect to be available. This will introduce strong competitive pressure for operators to follow suit in markets where MLBS have already been launched.”

By the end of the current decade Juniper believes that MLBS will be well established in all major geographic regions. Location will have become a parameter of subscriber usage, in the same way as availability and presence.

However, challenges that still exist for the fledgling industry include managing complex delivery chains, strengthening business cases and converting capability into revenue, network interoperability and international roaming, continuing concerns over privacy and the onset of competing technologies.

Juniper interviewed operators from different geographic regions and with different operating environments. Almost without exception they saw MLBS as a means to an end rather than an end in itself. The ultimate goal being to boost mobile data revenues though the provision of compelling and well differentiated services.

“This new reality should ensure that the market for MLBS shows a steady development path to maturity rather than taking the mobile data market by storm as was being predicted five years ago,” Gibson concludes.

By John Kennedy