Mobile operators will slow the uptake of location-based services by asking too much for the pure data and implementing different technologies at different times, according to a recent Report by Forrester Research B.V. (Nasdaq: FORR). Through 2005, Forrester advises that marketers hedge their bets by building location-sensitive services that seek alternative location information and don’t require operator involvement.
“Third-party marketers will use location-based services to deliver unprecedented value to customers — eventually,” said Forrester Analyst Carsten Schmidt. “Once precise location information is available in a standardized form from all operators, mobile services will spring forth with new life as door-to-door directions replace city guides and paper maps, queues disappear, and mobile entertainment takes a new form. But these scenarios will take years to materialize. Slow, spotty implementations and operator shortcomings will delay the use of location data by third-party marketers with mobile services, and mass-market services will not routinely tap location information for five years.”
Currently, one or two operators in each country offer their own location-based services like driving directions. But ubiquitous location information from all operators will take years to appear because operators’ pace in deploying location-sensing gear will vary, as loads of debt will cause operators to think twice and staggered rollouts will yield technology mishmash. In this environment, location information will only gradually become attractive to third parties over the next several years because value will rise as availability increases and precision improves. Staggered operator implementations mean that location information won’t be available for more than 50% of Europe’s mobile users until 2005. Most operators won’t offer Enhanced-Observed Time Difference (E-OTD) technology, which will deliver better precision, until UMTS goes live starting in 2003. Finally prices will take time to fall — with only a few users, operators will maximize revenues with premium pricing. “Companies need location information to add value to their mobile services, but they can’t depend on operators to deliver it,” Schmidt added. “To cope, Forrester believes that companies should avoid creating location-based services that require location information in a specific format to work. Instead, firms should take a shortcut around these roadblocks by building location-sensitive services that act independently of location-sensing technology offered by operators. Indeed, location-sensitive services treat location as an optional input, they can be implemented today, and they flex to accommodate new technologies. To deploy location-sensitive services, companies must build services that don’t require X-Y coordinates, obtain alternative location information from many sources, and integrate real-time location information as it becomes available.”