Location-Based Services Offer High Revenue Potential in Competitive Mobile Communications Market

Location-Based Services Offer High Revenue Potential in Competitive Mobile Communications Market

PALO ALTO, Calif., Jan. 16 -- Location-based services (LBS) have been increasingly on the radar screen for a wide variety of carriers. There has been intense scrutiny on how LBS initiatives can enhance average revenue per user (ARPU) and reduce churn.

Frost & Sullivan (http://www.wireless.frost.com ) reveals that revenue in this industry totaled just $91.2 million in 2004 and can reach over $600 million by 2008.

"The variety and breadth of possible applications and services in LBS, from pure content and advertising, to emergency 911 (E911), navigational aids, social networking, and tracking services highlight its adaptability," explains Frost & Sullivan Industry Research Manager Brent Iadarola. "Research on trends in LBS adoption indicates that companies regard location as a 'killer- enabler' to existing services, rather than chase the elusive next 'killer application'."

Middleware platforms leveraging advancements in location determination technologies and the proliferation of assisted global positioning system (A-GPS) handsets comprise the essential ingredients for a compelling, commercial LBS suite moving into place.

With high overall performance and widespread location coverage even in areas of low-cell density, A-GPS is likely to emerge as the long-term technology of choice for operators in North America. Carriers' decision whether to spread capital expenditures over a greater period of time and provide incremental services to customers will affect their future. By delaying services, the carriers may be able to save costs on intermediate infrastructure; however, they risk losing customers to competitors with first mover advantages.

"In contrast to fixed Internet, users in the mobile environment are demanding personalized, localized, and timely access to content and services," explains Iadarola. "LBS with user-friendly application categories such as mobile resource management (MRM), entertainment, information services, and security services are likely to be successful commercially."

The aggressive marketing of commercial LBS, growing traction of LBS offerings, as well as sophisticated and integrated LBS are some of the main factors that are likely to heighten the growth and revenue potential of these services in the future.

Watch this very, very carefully. The LBS market will morph into the AR market as network bandwidth widens and richer services can be deployed. Truly killer apps such as AR mapping ("follow the virtual arrow to your destination") require a see-through head-up display ala the eyeglass Nomad that Gates is looking for.