Better handsets drive location based services — MobileMonday Global: Industry News

^{European market to reach EUR400 million in 2012} Better handsets drive location based services

19 Apr 2008 at 10:55 GMT Timo Poropudas

European LBS revenues will grow to about EUR 421 million in 2012 from last years EUR 157 million. It took about seven years since the launch of the first services, says Berg Insight.

Including location-based tariffs for data and voice calls, total revenues are estimated to reach EUR 1,816 million. The best opportunity for this is in markets were fixed to mobile substitution has not progressed far yet.

The most successful European location based services, in terms of revenues, are turn-by-turn navigation services, corporate fleet management and tracking solutions, in addition to location-based voice and data tariffs.

Several important drivers are finally about to bring a breakthrough for LBS in Europe.

With mobile penetration reaching saturation, intensified competition and regulations driving call prices down, mobile network operators increasingly seek new ways of maintaining revenue growth. Increased focus on delivering value added services, including various location-based services, is one means of achieving this. The performance of new handsets is gradually improving, with a growing share of handsets featuring larger displays with higher resolution.

Moreover, because of improving coverage of high speed 3G networks, increased availability of reasonably priced flat rate data plans, as well as better browsers in handsets, usage of mobile internet services are increasing at a fast rate in Europe.

Meanwhile, new possibilities to access suitable location data is emerging for service providers. EU E112 regulations – mandating location of emergency callers – have prompted operators to install positioning technology in their networks.

To leverage the investments, more and more operators open their platforms to third party developers and location aggregators to enable deployment of commercial services. Some service providers, such as Google, even compile their own databases of cell tower locations that can be used as free alternatives, albeit with lower initial availability in some regions.

2008 is well set to become the breakthrough year for GPS-enabled handsets in Europe as more manufacturers are finally launching a growing number of models. These new handsets feature user plane assisted GPS, enabling deployment of assistance services with lower network impact and lower cost compared to control plane implementations in the past.

Greater availability of GPS handsets has proven especially important for turn-by-turn navigation services that require high accuracy location data, but are less sensitive to availability of position data indoors. In contrast to early adopters, mass-market users have not been willing to use external GPS receivers. Current navigation services are centred on in-car navigation, but most service providers are introducing new features to drive usage and add value in every-day situations, for instance pedestrian and multimodal navigation, local search, social networking and location sharing.

Many new services being launched, including location-enhanced social networking, search and information services, in addition to turn-by-turn navigation services, are intended to be funded primarily through advertisements. The number of users is still low but grows fast. At the moment, most ads are in the form of banners and interstitials that are not served based on the users’ location.

However, many actors in the value chain show great interest in providing targeted ads based on user’s current location. Nevertheless, several issues, such as user privacy, pricing of location data, along with scalability of the location technology need to be resolved before location-based advertisement campaigns can leave the trial stage and contribute significantly to overall LBS industry revenues.