Great Location Expectations

After providers figure out the technology and what consumers want, wireless-location services will take off.

While many next-generation services are not expected to arrive until 2002 or later, wireless-location services will be here much sooner. The FCC has mandated that cellular systems must have the capability to pinpoint wireless E-911 callers within a range of 125 meters or less by Oct. 1, 2001, giving providers a giant push to implement wireless-location services and a great opportunity to create a new revenue stream.

The location-determination infrastructure that you must put in place for E-911 services also can be used to deliver to subscribers high-value services that can differentiate you in the market-place. Location provides the next level of wireless-content personalization, offering subscribers applications such as localized information services, phone directories, and real-time weather and traffic information.

Wireless-location technology will enable a suite of killer applications that will be deployed on wireless networks. Because people are mobile, the real value of information delivered through their wireless phones only can be realized when the information is tailored to their physical location. With real-time query and response applications, you immediately can increase your value proposition to subscribers and ultimately reduce churn.

Beyond the initial technology challenges that require you to choose between a network-or handset-based solution, you must determine what applications consumers want, what they are willing to pay for and, ultimately, how to use location to provide value to subscribers.

Location, Location, Location
A recent report by The Strategis Group suggests revenues for value-added location-based services could reach nearly $4 billion per annum by 2004. According to the study, 28% of respondents (500 cellular subscribers) were extremely or very interested in location services. Thirty percent of those polled were very or extremely interested in safety applications, and 20% expressed interest in convenience and information applications. Respondents said they were willing to pay up to $28 extra for a location capable handset and an extra monthly fee of up to $26 for bundled location services.

"This high-dollar amount indicates consumers see value in these services," said Elliot Hamilton, The Strategis Group director of global wireless. "Wireless users desire wireless-location services even more than wireless-Internet services."

The Strategis Group's latest survey found that 65% of wireless users are interested in turn-by-turn navigation assistance and are willing to pay more than $1 each time they use the service.

The main reason consumers are willing to pay a little more for location-based services is the security element they provide. Emergency notification, roadside assistance and directions drive consumers' desire for location-based services, according to a recent study conducted for wireless data and location services provider, Integrated Data Communications.

But you don't need surveys to tell you that location-based services show tremendous market potential. Rod Nelson, AT&T Wireless senior vice president & CTO, said the combination of location and other data applications will provide meaningful services to consumers. Applications that include elements of location, time-sensitivity, mapping and directions in a convenient format such as personal calendars, traffic information and airline schedules are what consumers want today.

"These services can make your life much more convenient," Nelson said. "People want to combine multiple data streams that are location-sensitive and time-sensitive; these are the things that are going to endear people to the wireless Web. This is what would make having the wireless Internet worthwhile."

"One of the key side effects of making the Internet mobile is that the location or position of user starts to bear relevance in the service they're using," said Lew Turnquist, Cell-Loc executive vice president & COO. "What wireless location represents is an underlying value that should be exploited."

Many other providers, including Verizon and Nextel, currently are trialing location services in their networks. Andrea Linskey, Verizon Wireless spokesperson, can't reveal which solution the provider will use, but said it's conducting two trials with U.S. Wireless and True Position. Both are testing infrastructure-based services, one using a GPS and the other a triangulation system.

"Both are working well," she said. "We're going to try them out in tougher propagation areas like Manhattan, where we're installing a True Position system as we speak."

When Verizon will begin offering location-based services, however, is "open-ended."

Selling Location Services
Location-based services can be a differentiator, a new revenue opportunity and a key element of wireless networks in the future. They will be especially important as voice prices and revenue continue to fall.

"With location technology, operators can really add tremendous value to the content or product or service somebody wants to sell over the Internet," said Aengus Linehan, Cyantel co-founder & vice president of sales and marketing. "Once you've got location, you genuinely offer value."

Location-based services won't be difficult to sell to consumers. To put it simply, if you want to boost your wireless-Internet subscription base, just add location.

"Based on the preliminary data we've seen so far, the likelihood of adoption on the part of a user for wireless-Internet services doubles when location is a component," Turnquist said. "People are twice as likely to adopt a wireless-Internet service if they know it can be personalized down to the level of their physical location."

According to a 1998 Ovum report, the success of consumer wireless-location services will depend largely on marketing and value. You must educate consumers about the benefits of location services and offer attractive packages or bundles for them to purchase. For location services to succeed as anticipated, they must be marketed as a personalized service package that adds reliability, as well as cost-saving, time-saving and even life-saving propositions to consumers. Emergency and safety services, potentially the easiest to sell, will be more powerful if packaged with complementary services such as tracking and information, and integrated with existing offers or bundles.

Location Solutions
Wireless-location-service sales could be stymied by the cost of the handsets. Putting a GPS chip in a handset is no small expense for providers. Robert Ewald, Nextel senior manager, data technology development, said that by 2001,location-enabled phones may cost $50 to $75 more, and "it's hard to sell consumers a new handset that costs more than the last one."

"I would be surprised if they're that cheap," said Cell-Loc's Turnquist. "Any estimate of the cost of new terminals that are able to calculate their own position is probably conservative today."

Providers beware when choosing your E-911 location solution: One that requires consumers to go out and buy a new handset is not a good idea.

"The minute you start requiring a user to pay for something new, its application, use and utility have to be greater than the cost to adopt it," Turnquist said.

Cell-Loc's Times Three network uses Cellocate, a network-based technology that is indifferent to the device and delivers location services (independent of existing wireless networks) to the handset consumers own now.

Televigation's Snap-to-Map real-time navigation system enables providers to offer turn-by-turn directions to subscribers via wireless handsets without installing GPS chipsets in the handsets.

"This technology opens up the navigation-services market to wireless operators," said Sammy Nassar, Televigation vice president of business development. "This application is one of the few with such a high market appeal that it can help operators recoup costs and increase airtime."

Snap-to-Map supplies automated, precise directions to a driver using a voice interface on a regular wireless phone and text on a WAP-enabled handset. For example, a subscriber calls the navigation server from his phone and speaks his destination address. The server returns turn-by-turn directions from his current location by voice. Directions are so specific they include street names, and the navigation host updates directions as the subscriber's position changes. The system can be personalized by storing frequently used locations such as office or home, and you also can ask questions such as, "Where is the nearest gas station?" and get directions from your exact location.

Televigation is currently trialing Snap-to-Map software with U.S. and international providers, and will launch the service soon in two U.S. metro areas.