Lost In Translation

Imagine using a phone to find your position on a map, discover the whereabouts of a friend and be told where the nearest restaurant is. These are just some of the location-based services that have been touted for over half a decade by developers. But the rush to market has not occurred.

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By  Alex Ritman Published  March 5, 2006

|~||~||~|When they first burst on the mobile telecoms scene around 1999, location-based services (LBS) were another 'killer application', another offering that was set to help inflect service providers' falling revenues from traditional voices services. This has not quite happened. Uptake of LBS has been slow, and user interest is marginal. Instead, the average subscriber appears inclined to turn to more trusted practices, such as the internet, physical maps, or even using the phone to simply ring up someone for directions. Back in 2004, research from Frost & Sullivan in the US blamed the lacklustre performance of LBS at that point on poor technology and the lack of network infrastructure. Inaccurate location positioning information, substandard performance, and interface limitations on handsets also limited the appeal to end-users. Across the Middle East region, Ericsson customers for its LBS solution include the UAE's Etisalat, and Al Jawal and Mobily in Saudi Arabia, none of which is yet to launch any actual service commercially. Al Jawal appears nearest to commercialising the service. “We are intending to launch three services at the same time,” claims Fahad Alissa, Al Jawal's mobile strategic marketing planning and CRM director. “Yellow Pages, Find Your Friend and a third one unique to us, which we call Traveller.” Using the Traveller service, users will be able to find the nearest petrol station or hospital for example, relevant to their location. Alissa says that these services should not be launched later than March 2006. “But we're hoping to get it out before then,” he adds. Revenue generation is not, Alissa claims, at the forefront of Al Jawal's agenda for LBS. “What we want to generate is the satisfaction of our customer. In demand, we may collect some things. You don't know exactly, sometimes you think one thing will apply very well, then you find out that the customers aren't interested that much.” Alissa says that the research conducted across various regions indicates that LBS could still be a killer application. “But you don't know. All the studies say yes, but it depends on what kind of content you provide.” He believes that in the beginning, take-up will not be as high as projected, with people not knowing the service very well. “It's not a basic service like SMS, you have to tell customers how to use it.” The service from Al Jawal will come in different formats, as a text, as a map and also over GPRS, and the complexity of using the service will probably reduce the initial interest. “By the time people get used to it, they will start to depend on it,” claims Alissa, using it to find shops, and locate their friends, among other applications. ||**|||~|Fadi-Pharaon200.jpg|~|Ericsson's Fadi Pharaon believes that it is important that operators do not solely focus on consumer LBS, but also corporate services such as fleet management.|~|The friend finding facility is one that Alissa believes will take off first. “Then Yellow Pages will catch up, that's my expectation from the study we conducted.” Friend finding will be something he thinks will be more popular among the younger generations. But with the friend finder service comes issues of privacy, one that Zaim Azrak of Dubai-based Mapsolute Middle East, says may have slowed the uptake among operators. “I think internally, some of the people are concerned that people might abuse it, or don't know how to use it. But I think this is a small issue and they will get over it quickly.” The issue lies in the fact that when someone is using LBS to locate another mobile, the person being sought has to either accept or reject the search. However, rather than simply having to press 'yes' or 'no' to each approach, the sought person can accept all location-finding requests from one number. “If you say yes to 'all the time' then people might abuse this,” says Azrak. Should a person get to someone else's handset and activate the service without the owner knowing, then their location can be found. “This is one small thing, but it can be fixed by limiting the 'all the time' feature.” Alissa in Saudi thinks that users need to protect their own phones with a password, but says Al Jawal is still looking to shield its customers from any improper use. “If you do not agree, you will not be able to be located.” Al Jawal friend finder users will also have to subscribe in order for people to locate them. Another security feature is that users will be able to say who can position them and at which times of the day, whether they want a friend to find them at all hours, or just specific times. “If the name is not on your list, nobody will be able to know your location.” Finally, and perhaps most crucially, is that anyone whose location is being sought will be sent information telling them who it is looking for them. Mapsolute has a LBS that it has been showcasing to mobile operators, which provides accurate maps of countries, allowing users to accurately find where they are, find others and locate nearby resources. “I'm talking to about 30% of the telcos in the GCC,” says Azrak. Etisalat, Azrak claims, has been looking at Mapsolute's services, which now include a full 3D map, but is yet to make a decision. “They have not deployed because they have not developed their own SMS-based LBS yet.” Once this is launched, Azrak says Etisalat will consider phase two, improving the service using an interactive map such as Mapsolute's offering. In Saudi, Al Jawal has signed an agreement with King Abdulaziz City for Science & Technology (KACST), the independent scientific organisation of the kingdom's government, which will provide data to be used in its LBS. “And I believe it will be the third party providing the content for the Yellow Pages and Traveller services,” says Alissa. For the friend finding, the same data is not needed, just the continually updated maps, which Alissa says will also come from KACST. Al Jawal has resolved issues of billing, and the regulator has approved a pricing structure. “For the network itself, everything is going to be provided by the third party, KACST. It will provide us with all this information.” Once launched, Al Jawal will charge for each SMS and for each map, as well for the GPRS connection. ||**|||~||~||~|Fadi Pharaon, Ericsson's UAE-based VP marketing, is more straightforward in his reasoning. “LBS as an area is quite complex in general, installing the platform is quite a feat, packaging a service around LBS is not as straightforward as maybe offering a ringtone or anything similar.” On the end-user side of things, Pharaon says that the service providers have perhaps been marketing the wrong features. “They've maybe been too much centred towards 'where am I?' which is perhaps not quite what the user is looking for. Also I think there is a lack of awareness among the users.” While actual pricing may not be high, perceived costs for LBS is often expensive. Ericsson holds 40% of the world market for mobile LBS, providing an end-to-end solution that it offers operators. “The cornerstone of this is the platform itself, the mobile positioning system. This is what enables the network to produce the coordinates of the handsets,” says Pharaon. The Ericsson solution also includes middleware for the application providers to interface with, a Geographic Information Systems engine, which allows for digital maps, and finally the applications themselves. “This (the applications) is where the money will be generated,” says Pharaon. “We have a lot of partners who provide us with applications that are related to positioning.” These applications include a wide variety of services, including gaming, dating, navigation and fleet management. “We try to cover all the different segments.” One of the most important factors for operators is what Ericsson calls its 'Booster' service, the business consultancy side of things. “We send a team of business developers who sit down with the operators and review and rate the different services that could be implemented.” These teams look at the different targets, the segment size, the time to market, the willingness of the end user to pay for it, frequency of usage, and the accuracy of positioning. Using the results they create a matrix showing the top three LBS that could be launched in that specific market. “We also help the best practices for the marketing segmentation.” Pharaon claims that Ericsson's research has shown that for LBS you need to work much more on the segmentation and the packaging of the services compared to others, in order for it to see financial reward. “In the beginning of LBS everyone was going for consumer applications, such as 'let's find the closest Pizza Hut',” says Ericsson's Pharaon. “But nowadays, the industry is realising that we need to be a bit more focused on enterprises, maybe we need to ride the wave of the need for further security.” A service such as fleet management makes a lot of sense for business, improving efficiency and reducing cost. When it comes to consumer applications, Pharaon believes that more unusual applications that cannot easily be used elsewhere will take off. He describes a mobile game where users have to fire SMS missiles to each other, depending on their location. “Essentially you have to send a missile or a bomb towards a friend of yours, and guess where they are.” What makes the difference is not showing that you can find someone's position, but using it, like in a game. “This is where it is most favourable,” says Pharaon. “I think it's very important for operators to launch LBS in order to learn their own subscriber base,” says Pharaon. “Whatever they do is very positive, so long as they have a good follow up, which I'm sure they have.” Nobody has found the optimum use for LBS yet, so maybe this learning curve is an essential part of the technology's growth. And as far as a 'killer application' goes, Pharaon rejects the notion. “We do not believe in the killer application, we believe in a good service package that can be personalised. We all have our different needs and interests, and that's why when it comes to segmentation of services, this is much more complex than when it comes to basic voice.” Frost & Sullivan research released in January claimed that the total LBS market took just US$91.2 million in 2004, but could reach over US$600 million by 2008. Industry research manager at the company, Brent Iadarola, takes a similar view to Ericsson's Pharaon regarding LBS usage. “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'.” ||**||

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