Location services still to find themselves

26 Feb 2004

There’s little doubt that the mobile phone market has reached saturation point in Europe and, in particular, Ireland where penetration is estimated to be as high as 82pc of the population. But the challenge has always been what next? One solution was to provide useful information to your phone based on where you were – location-based services (LBS).

By 2005, the Yankee Group believes that LBS will generate US$6.37bn in mobile operator traffic revenues across Western Europe. It also believes that the most successful services will be directories, listings and push messages.

LBS works using the basic cell ID that is already in your phone as a tracking device. It operates by identifying the base station that is supplying the best signal at a particular time and assumes you are somewhere in that cell. Even though the accuracy depends on the cell size, it’s cheap and you don’t need to upgrade your handset. So if you want to know where the nearest cinema is the information can be sent to you right after your phone has been located.

But it’s becoming clear that LBS has different attractions for the consumer and business markets.

Campbell Scott, product director O2 Ireland, says that consumer-side applications have been the most successful for O2. “We have facilitated the use of LBS for Myhome.ie where the consumer can text Myhome.ie which in turn can interrogate our network to locate the customer and will send back a text with the houses in that area. The consumer can further refine the search by putting in a price bracket.”

O2 Ireland has improved other LBS services such as ATM and restaurant finders to make them easier to use with fewer commands to get to the information. O2 is also working with the AA for a LBS offering that will enable a car driver to get updates on traffic jams along a route. Scott says that this service is due to be launched within a number of weeks.

Similarly Vodafone repackage external content as part of their Vodafone Live product. This content can be downloaded via a menu interface on special handsets and LBS is an element of this package. Michael Creaven from Vodafone says that the LBS offering includes locating the nearest services ranging from go karting, pubs, cafes to pharmacies, ATM, cinemas and petrol stations. Creaven says in the future he sees the functionality of this service being extended. “We would see that customers would be able to go beyond just finding the nearest cinema, they would be able to see what films are showing and book a seat.”

Although this is looking towards the future one company that does seem to have taken LBS to the next level is Cyantel. Founded in 1999 this Cork-based company has around 18 staff and focuses on developing LBS for mobile operators, particularly based around business applications. Cyantel’s flagship product is called e-z-manage and is aimed at businesses that want to locate and manage their mobile workforce using LBS. Padraig Murphy, CEO of Cyantel, says that the application has been particularly useful in the services industry. “We have found the product has been successful in the transportation and logistics sectors of industry,” explains Murphy. “Particularly where companies are getting paid by the hour or by the job, so from the businesses point of view the more jobs get done the more revenue gets earned.”

Murphy says that LBS is also useful for lone workers in the healthcare and social services sector where the driving factor is not so much productivity but safety. “There is a higher degree of peace of mind if you can see where the last location of a social worker has been,” says Murphy.

Murphy also has plans to extend the product range into the consumer section with the launch of e-z-mall, due out next year. E-z-mall would enable shoppers in a mall to be alerted about promotions in shops within that mall, based on an opt-in model where customers would signify their preferences.

So what does the future hold for LBS? It’s acknowledged that the technology will have to improve. “While the location can be accurate in cities, it’s not so good in rural areas,” says Scott from O2. This is due to fewer base stations with which to pinpoint cell locations but Scott believes that greater accuracy can be achieved without resorting to GPS navigation, which is more expensive. “Chipset costs will come down so we won’t have to use GPS technology,” he adds.

Murphy shares the view that the technology of the handset will improve but believes “operators will have to launch applications around 3G that will lead to better interfaces on mobile phones”.

Whatever the technology LBS will come into its own when it goes beyond the tepid offering that has been made to the consumer market so far. LBS needs to actually save businesses money or improve their productivity. When a truck driver can find the cheapest diesel in the area and save e50 or when sales reps can co-ordinate customer visits better through up-to-date information, then people will embrace LBS.

By Gillian Cope