How wireless providers are quietly cashing in on your location data

Smartphone location data will be a $79 billion business by 2020, says a researcher. Mobile operators are hoping this will make up the shortfall caused by a slowing smartphone market.

How wireless cellphone companies are selling users' location data

Mobile Network Operators (MNOs) are partnering with Big Data marketers and are actively selling, or at least getting ready to sell, data that connects consumer demographics with locations, according to an article in Advertising Age.

The data lists phone subscriber location along with websites visited on mobile browsers, neighborhoods where subscribers go, and so on.

Telco data-as-service

This kind of telco data-as-service (TDaaS) business is currently worth $24 billion a year and will be a $79 billion business by 2020, according to 451 Research, whose numbers are quoted in the Ad Age article.

Clearly, consumers don't hear much about it, particularly when signing up for service.

But it is taking place.

Location data and behavior mix

The service combines (sometimes) anonymized location data from MNOs with other information, "telling businesses whether shoppers are checking out competitor prices on their phones" while in the location, among other things, the article says.

Software provider SAP is one such marketer of the data.

"When people arrive or leave," and "how long they stay," measured in what is called "dwell time," is available through SAP's anonymized telco product called Consumer Insights 365, according to a document (PDF) on SAP's website.

How valuable is the data? 

Available in its service are "demographics based on the town or city" where the subscribers live; how many are "present at a destination" or nearby; and "what they were doing," i.e. making calls, sending texts, or browsing the web.

Because the MNO knows the locations of subscribers, along with, say, the subscribers' purchasing habits, its data can help retailers make long-term business plans, like where to open a new store, for example.

But it's in the aggregation of footfall traffic that the data should be really useful.

SAP says data from its TDaaS service shows "how often people visit or return to a location," if "marketing initiatives deliver more traffic to a location," and how retailers compare to local competitors.

Anonymized data

And the data can be anonymized -- the retailer doesn't need to be told exactly who the user is to gain from the intelligence.

SAP's Consumer Insights 365 is anonymized. It sells data consisting of up to 300 mobile phone 'events' per day for each of the 20 million to 25 million mobile subscribers in its data set, according to the Advertising Age article.

"Data that could identify an individual mobile subscriber never leaves the mobile operators' systems," SAP says in its document. That should appease potential privacy questions. Or not.

How anonymized?

Web publication ExtremeTech is not quite as gentle in its analysis of TDaaS as even Advertising Age. A recent article on the site highlighted some concerns about anonymity.

"Pick the two locations where a device spends most of its time, and you've almost certainly found the owner's home address and workplace," the article explains.

But whatever side you're on, it's here to say—if quietly. Telcos are seeing saturation in developed-market smartphone sales. Their build outs of 3G and 4G have been expensive. This is one way they plan to bring in some quick revenue.

Join the Network World communities on Facebook and LinkedIn to comment on topics that are top of mind.

Copyright © 2015 IDG Communications, Inc.