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LBS for MNOs - June 2010
MNO MARKET FOCUS:
LBS applications vs LBS services: why mobile network operators are in a better position to serve the market than Nokia or Google.
Mobile network operators (MNOs) have a clear advantage when it comes to deploying location-based services (LBS) particularly in emerging markets. They must not under-estimate the unique position they are in, nor delay in taking advantage of the limited window of opportunity available to them. The global brands are already making enormous investments to enable them to dominate the provision of location-based advertising, social networking, asset tracking and the other key slices of the location-enabled pie.
So WHY are MNOs in such a strong position to extract value and generate greater profits?
There are six fundamental reasons:
- Knowledge of universal location - at the heart of the LBS case for MNOs is their knowledge of universal location data. Location data is not an “add-on” but a core asset which operators inherently have in their network. It is this knowledge which gives MNOs the advantage and differentiates them from giants such as Google and Apple who have to rely on a gradual build up of awareness of location. MNOs are in a unique position – they are the ONLY party in the LBS ecosystem to have this valuable commodity, therefore the ONLY party who know the exact location of all subscribers.
The revenue generating opportunities this provides mobile operators with are colossal and what's more, they are available to be monetised right now. Location-based advertising is an example of a commercial VAS which is ramping up considerably and predicted to account for 11.7% of the total digital advertising market by 2014 (Berg Insight Mobile Advertising and Marketing Feb 2010). An impressive figure, considering the internet has a 10 year head start. Operators should consider location-based services as low hanging fruit which can create sticky services providing potential long term revenues.
Another network advantage that the operators possess is the ability to use Enhanced Cell-ID for location positioning where appropriate. This is something which application providers are not able to use, limiting their choice of deployment options. When cost is a key factor, particularly in emerging markets, Enhanced Cell-ID can be the difference that makes an LBS deployment viable for the operator. This positioning technology also has additional benefits over other technologies such as GPS which are covered under point 5.
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Penetration and reach - not only do MNOs possess the valuable location data, they are also in a position to use the data themselves or mine the data for enterprise customers right now. It is this universal location information which is essential for advertising, zone billing, social networking and lawful intercept. Combined with the reach the operators have, this creates a very powerful tool for the mass deployment of LBS.
Contact us to understand how we can help you use LBS to achieve your ARPU goals.
- Using LBS to enhance value-added services - location-enabled services such as zone billing are another key resource for operators to tap into. Location can enhance a number of existing services and for that reason should not be regarded as a standalone idea or set of applications. In the case of Zone Billing, location enables flexible tariffs that give competitive advantage against fixed line providers and other mobile operators. Location-enabled applications can also provide a key driver for stickiness.
Contact us to understand how we can help you use LBS to achieve your ARPU goals.
- Brand recognition - operator brand power is significant, particularly in emerging markets. MNOs have a strong, reputable and sustainable brand presence in these regions which application providers such as Google, Apple and Nokia do not, nor is it something which they can establish in the short-term. The familiarity of an operator's brand can give subscribers confidence and assurance in the LBS service being promoted.
Contact us to understand how we can help you harness the power of your brand for the deployment of LBS.
- The limitations of GPS - whilst we recognise the role of GPS in certain situations, we also recognise that it does have some considerable limitations. GPS is appropriate for individual users as it tells them their exact location and can provide them with turn-by-turn navigation. Within the enterprise market, GPS is also relevant to applications such as Fleet Management (Creativity Software use GPS for their Fleet Tracking service) and Personal/Workforce Emergency alerts. There are also some cases where GPS handsets will compliment LBS where A-GPS can be employed.
However there is a misconception that GPS is always the most suitable location method, when in reality this is not the case. For example, applications such as Zone Billing and Location Based Advertising are better served via the network. Network based solutions exploit the universal location database and enable services that require knowledge of others' whereabouts such as workforce management. When properly scoped out, the conclusion is that these applications do not benefit from the high level of accuracy provided by GPS, making GPS an unnecessarily expensive (and limited) deployment choice. Does an end user want to receive a location-based advert when they are just three meters away from the restaurant? Probably not. It is likely that they will have preferred a little more notice than this! From the advertiser side, end users using GPS handset devices have to actively subscribe/agree to their location being used for advertising purposes. This provides an instant barrier to deployment. However, operators who can deploy location-based advertising via the network, already have knowledge of each and every subscriber and in many countries no opt in will be required. This provides the advertiser using the services with an instant, targeted audience.
Contact us to understand how we can help you rollout network based LBS solutions to achieve your ARPU goals.
- Service channels - with the ability to deploy LBS via a variety of service channels including USSD, MMS, SMS, Web and WAP, no subscriber is out of bounds and no segment is unobtainable. This gives operators the ability to directly target all subscribers and empowers their enterprise customers to do the same. The most appropriate service channel can be selected, often dictated by the most common handset device functionality in the market, e.g. if feature phones are most prevalent then an operator could select USSD as the service channel of choice to ensure mass market customer needs are met.
Contact us to understand how we can help you use LBS to achieve your ARPU goals.
In summary, LBS opportunities for operators in emerging markets are very real. The fundamental location knowledge they possess, combined with the factors outlined above, put operators in a pivotal position. However, the window of opportunity is limited and technology providers are already trying to move into the LBS ecosystem as demonstrated by the sizable investments made by some of the big brands over recent months and years. The potential to monetise LBS is considerable, providing operators empower themselves quickly to ensure they remain more than just a dumb pipe.
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TECHNOLOGY FOCUS:
Unstructured Supplementary Services Data (USSD)
USSD enables a fast, intuitive service based on a simple, menu driven structure. The simplicity of the system generates high participation rates and can be particularly effective in areas where literacy rates are lower.
BuddyWise, the mobile social networking application from Creativity Software, and FamilyWise, the Friend and Family finder, are both frequently deployed via USSD as they are interactive services which require easy to use interfaces and fast response times.
This service channel is also supported by all GSM handsets, thus making it a powerful, universally available application which operators can use to target their entire subscriber base.
Benefits of USSD:
- Increased ARPU - stimulates LBS usage leading to increased ARPU and revenues (further supporting the business case for LBS).
- Availability - supported by all GSM handsets.
- Ease of use - subscribers find the menu-based system convenient and easy to use.
- Literacy issues - simple wording overcomes many of the literacy obstacles that handicap the deployment of web and WAP channels.
- Excellent customer experience - USSD provides an interactive interface which provides instant communication. This bypasses the delay encountered with "store and forward" technologies such as SMS which is intrinsically slower.
- Inexpensive - if there is no USSD gateway already in place, then it is relatively inexpensive to install.
- Complimentary - USSD can be complimented by SMS (to keep trace of the location) or MMS (to view a map).
- Faster time to market - enables operators to launch new LBS solutions quickly and facilitates the rapid update of new LBS applications if subscribers are already familiar with the service channel.
- Information services - USSD is already used for account top ups and other information services by many operators.
In summary, USSD is a mature, inexpensive technology that can be easily and quickly deployed. It is universally available and supported on all handsets, enabling mass market access and deployment. USSD removes potential barriers to adoption that other service channels might experience.
Contact us to find out how we can help you use USSD for the effective deployment of LBS solutions to achieve your ARPU goals.
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CASE STUDY FOCUS:
Starcomms deploys first location-based family and friend finder service in Nigeria
Nigerian mobile operator, Starcomms, is pioneering the way for location-based services in West Africa. The CDMA operator, which listed on the Nigerian stock exchange in July 2009, is a key player in one of the most rapidly expanding mobile markets in Africa - 75 million mobile users and rising. Starcomms is ideally positioned to deploy innovative location-based service solutions and leverage the benefits of being first to market - differentiating it from the competition and helping to attract new subscribers.
Creativity Software helped Starcomms by first installing a Mobile Positioning Centre (MPC) into their CDMA network to enable location positioning information to be obtained. Then, helped roll out the FamilyWise application which the Starcomms service is based on.
Starcomms is already seeing increased revenues as a result of boosted premium SMS traffic generated by their new cost effective service and are now preparing for the deployment of a Personal Emergency Alert service (based on EmergencyWise from Creativity Software).
Read the Starcomms case study to understand how LBS solutions from an end-to-end supplier could help you achieve your own ARPU goals.
Contact us to understand how we can help you use LBS to achieve your ARPU goals like Starcomms are already doing.
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PRODUCT FOCUS:
Service delivery platforms
In order for operators to provide an end-to-end LBS service to their subscribers (including billing, provisioning, privacy etc.), a robust and flexible service delivery platform is needed.
When selecting a service delivery platform, operators need to ask the following:
- Is the platform scalable?
- Does the platform offer high availability?
- Does the platform offer interoperability? Can it interconnect to any OMA MPL (3.1 or 3.2) compliant GMLC? It is easy to use and does it expose open APIs?
- Can the delivery platform be integrated into the network with minimal disruption?
- Does the platform securely integrate with your billing and operations systems to enable real time billing, online reporting and off the shelf connectors to provisioning, messaging, billing etc.?
- Security and privacy - does the platform provide the capability to configure emergency requests, priorities, black/white lists and access rights to each LCS client application?
- Does the middleware use open standards-based interfaces to the applications?
- Can interfaces for emergency (E.911/E.112) and security (Lawful Intercept) services be provisioned should you require this facility?
MiddleWise, the robust and flexible service delivery platform from Creativity Software addresses all of the above operator needs and enables the deployment of end-to-end LBS solutions to subscribers whilst providing them with excellent customer service.
For more information on any of the location-based services from Creativity Software or to speak to someone about how LBS could help increase your ARPU please email us or telephone +44 208 408 5227.
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