Mobile location services could be 3G sweet point
By Anne Young, Total Telecom
31 January 2001
A new survey released Wednesday claims that location-based mobile services could be the holy grail for operators looking to make money from third-generation networks, while hanging on to their hard-won customers.
The survey concluded that current mobile phone users would be interested in location-based services, and that the availability of such services would affect which mobile operator they choose. The survey was conducted by leading market research firm MORI in the United Kingdom, and its partners Demoscopie in France and INRA in Germany.
Almost inevitably the survey was carried out on behalf of a company that offers exactly these kinds of services. U.S.-based AirFlash sells a software platform to mobile operators that allows them to provide targeted services to their subscribers. The technology enables the provision of such services once the location of the phone is known: other firms, such as Cambridge Positioning Systems (CPS), provide the technology that tracks the phone's position.
According to AirFlash chief executive Rama Aysola, "the survey confirms our suspicions that there is a market opportunity for mobile location services."
In his view, the services would provide two key benefits to mobile operators. Firstly they would generate additional revenue, a crucial factor as operators wonder how on earth they are going to recoup their massive investment in UMTS networks.
Secondly, said Aysola, the services will be "a key weapon in the battle for customer loyalty." As saturation points are reached in mobile markets, operators will be looking at ways to hang on to their customers, and issues such as cost, quality, and service differentiation will become of paramount importance.
Aysola stressed that the idea is to send targeted information to users: "It's not spam!" he asserted. "The customers says what they are interested in, and ask for information about those things."
The survey was carried out in the U.K., France and Germany in December 2000. In the U.K., around 2,041 interviews were carried out with a cross-section of 'ordinary' mobile phone users (not particularly Internet savvy, not necessarily WAP phone owners). Around 1,000 interviews were conducted in France, and 1,041 in Germany.
The goal was to discover general consumer attitudes towards location-based services. And according to Aysola, there were some surprises in the results.
"We were particularly surprised by the fact that users were interested in sharing information they received, which is not normally a feature of mobile location-based services. It was also notable that users saw using such services as a lifestyle choice."
One key finding that operators should, perhaps, take note of is that in the U.K., 65% of users surveyed said they would consider changing operator to gain access to mobile location services. Around 54% of German and 44% of French respondents said the same.
Around 59% of French users said they considered the services to be valuable, compared with 52% in the United Kingdom and 42% in Germany.
German users were more interested in the cost of services when choosing a mobile operator. Around 78% said cost would be the key factor, compared with 67% in the U.K. and 64% in France.
Aysola estimates that such services will on the whole add around £5 a month to a mobile bill.
According to Aysola, there is a US$1.46 billion to $1.92 billion market opportunity for mobile location services today, and the market will grow as technologies such as GPRS and 3G come to market and evolve.
"We help the operators make money today," he claimed. "You gotta crawl before you can run, but at least we are crawling."
"The message to operators is: don't panic about 3G - there are ways to make money!" added Aysola.
AirFlash was formed in late 1998, and first deployed its technology at Mobile Excite - part of AT&T Wireless - in March 2000 in the United States. U.K. operator Orange, now part of France Telecom, started to deploy the technology about six weeks ago, and is now marketing the services to its subscribers.
Aysola said AirFlash has five customers in total, one of which is based in the Asia-Pacific, but could not reveal any further details. The initial target market is Europe, followed by Japan, the Asia-Pacific region as a whole, and the United States.
The company's target is to have 20 mobile operators as customers worldwide by the end of 2001.
Aysola thinks it may be possible to go for an IPO this year, although that will depend very much on the markets. The company is currently closing its third round of funding, which should take to it profitability "within the next 18 months."
AirFlash is also about to roll out a new range of products, which will take into account issues raised in the survey, added Aysola.
totaltele.com
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