Pinpointing
Location services put mobile users in the crosshairs.
Margot Suydam, Technology Editor

Then, magic. As you're pondering the reviews, a coupon from a nearby restaurant flashes across your screen: "10 percent off on dinner and margaritas—right around the corner!" Your decision becomes a cinch.

With all the hype surrounding the benefits of mobile devices, the first part of that scenario—which could apply just as easily to lodging, shopping, or professional services—probably doesn't seem farfetched. After all, if you've got a Web-enabled cell phone, you can use Yahoo, for example, to find local restaurants, events, or services. And if you plan ahead, you can use software from the likes of Avantgo and Vindigo to load your PDA with intelligence on the cities you intend to visit before you leave the confines of your desktop computer.

What's intriguing in this hypothetical is the second part, in which information (in this case a coupon and a set of directions) comes to you based on your location. It's called auto-location technology, and it's got cellular carriers, startups, and would-be marketers tripping over each other in excitement over the lucrative possibilities. The benefits of discount coupons not withstanding, however, one can't help but note the privacy infringement implications of receiving unsolicited sales pitches as you stroll past one retailer or another.

Lew Turnquist

While a lot of activity has sprung up around location-based services on the Internet in general, this emerging opportunity seems to have captured the imagination of entrepreneurs on both the services and enabling-technology sides of the fence. Everyone from Yahoo to Go2Networks already provides location-based information to Web-enabled cell phones and PDAs, with growing numbers of companies entering the fray every day. Recent entrants include, among others, Junglesoft, which provides maps of metropolitan areas along with local restaurant and yellow-pages listings, NearMe, a spin off of carrier-class, mapping-technology provider MapInfo, and BeVocal, a voice portal that provides access to local listings from cell phones. All of these companies have set their sights on the auto-location jackpot.

And it's no wonder, at least if some forecasts end up being anywhere near accurate. Strategy Analytics reports that location-based services on mobile devices will represent an annual $7 billion revenue opportunity in North America by 2005, while Europe can expect more than $9 billion in annual revenues at that time. Moreover, the market research firm expects that proximity-sensitive notifications and alerts to mobile phones will be the most popular services in the next five years, achieving North American and European penetration rates of 35 and 27 percent, respectively. Pull-oriented services, including mobile yellow pages, will resonate with 30 percent of North American and 21 percent of European cellular users, while tracking applications will remain a niche over the horizon.

"Successful plays in mobile data will ultimately exploit that which makes wireless unique," says Cliff Raskind, senior industry analyst with Strategy Analytics. "There is an element inherent to wireless that wired networks, by definition, will never possess—untethered mobility. Mobility, and hence location, is therefore a critical attribute to be exploited by all involved in the wireless value chain."

Meet the mandate

In the US, the government provided the powerful initial push that got the ball rolling for auto-location services, or what is sometimes termed "l-commerce" (location commerce). In 1996, the FCC issued its enhanced 911 (E911) rules, which mandate that by October 2001 wireless carriers must provide a method for locating mobile 911 calls. More than 100,000 wireless users dial 911 every day in North America, and authorities need to be able to locate those callers.

The burden to provide that location information rests squarely on the wireless carriers. Carriers today can locate users only approximately, by identifying the cell their call originates in. Technologies the carriers can employ to comply with the FCC mandate fall into two general categories. Network-based technologies, sometimes called network-overlay systems, rely on triangulation techniques to pinpoint mobile devices. With the second category, GPS, the handset itself accesses the worldwide network of global-positioning satellites to calculate its position (for more on GPS systems, see this month's cover story, "Know where"). Finally, some vendors are combining elements of both technologies in their offerings.

A number of large and small manufacturers are vying for this business, with no clear leader emerging from the pack. These technology providers, which include Cell-Loc, TruePosition, and SnapTrack, among others, have set their sights on helping wireless carriers meet the FCC requirements. In addition, they also have their eye on a piece of the commercial location-services pie.

The Strategis Group projects that wireless carriers will spend more than $2 billion on location technologies over the next five years. The reasons extend beyond the FCC mandate. Wireless location systems offer carriers the opportunity to enhance revenues and offset the costs of meeting the public-safety requirements. The primary applications include not only support for emergency 911 systems, but also vehicle and fleet management and location-sensitive billing. Carriers realize that once they've built a wireless location system for one major application, they can add many incremental applications inexpensively, potentially creating more revenue streams.

Cell sale

In a survey of more than 600 wireless users and nonusers, Strategis Group found that consumers were "not only interested in location-based wireless services, but were also willing to pay for these services," according to Stephan Beckert, senior consultant. Strategis Group quantifies the demand for location-based services, finding that nearly 40 percent of all wireless communications users expressed an interest in such services. More specifically, half of cellular users (54 percent) expressed an interest in having a location capability integrated with their cellular telephone, and 42 percent indicated an interest in a vehicle tracking and recovery system. The willingness to pay for these services varied considerably by application and by user group, but many subscribers expressed a willingness to pay an average of $10 per month for these value-added services.

Eric McCabe

According to Turnquist, widespread availability will be important in ensuring success. "What's critical in providing service is assurance on the part of the user that he or she can access that service when they want with the same level of quality as the last time they accessed it," Turnquist says. "Availability is critical and has driven a lot of the decisions that we've made over time, not only as a technology provider but also as a service provider and network operator."

Snap to it

To be successful, the technology that underlies location-based services needs to be able to do a number of things at the same time, notes Ellen Kirk, vice president of marketing and strategic planning at SnapTrack, which provides a GPS-based location technology. "It has to be highly available, which means it needs to work in a dense urban area where is a lot of multipath," she says, referring to a type of interference caused by signal reflection. "If not, subscribers will not be able to rely on it and so won't use it. Second, the technology must have an efficient economic model. Upfront costs, for either the handset or the infrastructure, or the combination, can't necessitate high service prices right at the outset, Kirk says. Third, the technology must be easy for operators to integrate into their network and maintain. "Operators are in the business of providing services and they aren't going to turn themselves inside out just to deliver location," Kirk says. "Finally, it needs to be at least street-level accurate. Precision is critical in deploying location-based services."

SnapTrack claims its technology overcomes the problems that conventional GPS has indoors. "Wireless-assisted GPS will work where regular GPS and network-based location technology won't work," Kirk says. "This is basically where people use phones—inside your house, your car, an office, or the mall. On average, the system gives an accuracy range of 20 meters. This is accurate enough to provide turn-by-turn pedestrian or driving instructions."

Four-prong approach

Meanwhile, Eric McCabe, vice president of marketing at SignalSoft, points to four components that wireless carriers need to in order to make mobile location services happen. The first, of course, is the technology used to locate mobile phones. The second component is the location gateway or middleware that is installed in a carrier's network to interface to all the different types of location technology. "Not just one type of location technology will prevail," McCabe says. "The network will always have cell ID, but some handsets will have GPS or maybe in some parts of the network, they'll use network-based location. This component figures out what's the most appropriate method."

The gateway also interfaces to a third component: the information, billing, safety, and tracking applications. "Applications don't have to be concerned with what kind of location technology is used," McCabe says. "The fourth area is location provisioning. You have to have a way of getting the map data, the content and subscriber info on what kind of service they want. This is server based or has some sort of customer service or subscriber interface to enable users to load data and view maps on the screen."

SignalSoft provides all of these components except the location technology. Moreover, its product line supports cell ID as a location technology, something that other application platform providers do not, McCabe asserts. Cell ID locates a mobile device based on the location of the base station that's handling the call; it provides an approximate location, but isn't sufficient for E911.

"Operators are currently using it to get started," he says. "It's not the most accurate, but it is the most widely available. Sometimes in an urban environment accuracy gets down to 100 meters, while in a rural environment, the area is much larger. But it gives you an idea of the proximity. Today we are supplying systems based on cell ID. That's what's available."

SignalSoft has the claim to fame as being the first member of the Location Interoperability Forum (LIF), an organization founded in September by Ericsson, Motorola, and Nokia. The LIF aims to define, develop, and promote, through global standards bodies and specification organizations, a common and ubiquitous location-services technology. SignalSoft will work with the LIF to develop global interoperability among mobile positioning systems, which are software products that get incorporated into wireless networks to enable mobile location services. SignalSoft's mobile positioning system, Location Manager, allows wireless carriers to manage multiple location technologies, including cell ID, GPS, and others.

The company provides information, billing, safety and tracking applications, along with a provisioning system. SignalSoft's local.info application allows carriers to deliver location content via voice or data to mobile devices. "Whether it's WAP, SMS, or voice-based, we make it so any type of content can be delivered," McCabe says. "Today, we use cell ID to give us the first part of location, but we're ready to move into auto-location when it happens."

Push or pull

McCabe asserts that location services will start with cell-ID technology and a pull-based usage model. The pull model lets users make the choice of when they want location-based information. "Today, that is the way we can get location—when someone requests a service," he says. "This activates a connection to the network, which we can then locate." People see value in such transactions, McCabe argues, and will get used to the idea that allowing the network to know their location can provide benefits. "Maybe that gets to the point sometime where they say, 'I'm willing to tell the network at certain times and certain places, I'm willing to get information pushed to me,'" he says.

While the E911 mandate has driven the development of location services in the US, it's not an issue in Europe. "In Europe, 911 doesn't even come up," McCabe says. "They've done this without that type of impetus. Moreover, they've started with cell ID because they don't want somebody telling them how accurate it needs to be. They want to do it with the technology they have today."

Public or private

Also central to the pull versus push debate is how to provide personalized services without infringing on user privacy. "We want to be about when subscribers actually ask for this, and give them a way to turn it off if they don't want to receive it," McCabe says.

Consumer privacy is a key issue, agrees Dylan Bromby, director of wireless strategy at Go2 Systems, a provider of location-based directory and information services. "Currently Go2 users create a list of their favorite locations and assign a nickname to each, which is an active process," he explains. "When devices are location aware, this will become a passive process. Consequently, it's important that companies focus on the privacy and security issues for consumers. We believe that location is a user-controlled feature, whether at the hardware or software level. Users always need to be informed and in control."

The FCC also sees privacy issues on its radar screen. Mike Altschul, vice president and general counsel of the Cellular Telecommunications Industry Association (CTIA) reports that, in addition to timing and accuracy requirements for E911, there are legal and regulatory issues related to the use of location information associated with customer use of wireless phones.

Privacy is addressed in last year's 911 bill, a statute called the Wireless Communications and Public Safety Act. This tagged location information derived from a telecommunication service as CPNI (customer proprietary network information). "The statute requires the express prior authorization of the customer to use, disclose, or access call-location information concerning the user of a commercial mobile service," Altschul says. However, the statute doe not specify how that authorization has to be provided. The FCC is expected to commence rulemaking regarding these requirements in the immediate future.

US wireless carriers are less than enthusiastic about the FCC mandate, Altschul says, as well as a bit overwhelmed by the whole concept of location-based services. "There is such a high hurdle for an emerging technology, that it has prevented early adopters from deploying systems that will meet the 911 requirements," he says. "There are so many choices and so much interest, that carriers are interested, but they're delaying their deployment because more and more opportunities keep on turning up every week."

Author information

Margot Suydam is CommVerge’s Technology Editor.