Location services move into prime time

Location-aware services – providing information, applications and services to wireless customers based upon their physical location – have been a long promised part of the next-gen wireless data services that seem to be finally getting off the ground around the world. We recently spent some time at the Cellular Telephone Industry Association (CTIA) conference in New Orleans, and saw location-based services in action. We walked away impressed from what we saw – location-aware services for 2.5 and 3G handsets (and in some cases, for short message service-capable 2G handsets).

Taking advantage of the New Orleans location, TeleCommunications Systems (TCS) showed an interesting application – location-aware wireless restaurant reservations using TCS’s Xypoint Location Platform and services from partner GlobalDining. Hungry conference goers were able to use wireless devices to browse local restaurants and receive SMS messages on their mobile handsets confirming their reservations.

Now getting dinner reservations online is a cool application – one we’d use, if our mobile phone providers offered it – but dinner is far from the only application for location services. An obvious application, and one that is driving part of the infrastructure for more generalized location-based services, is Enhanced 911. Regulatory requirements are driving mobile service providers to add this functionality to their networks, which provides not only some of the infrastructure needed, but also experience deploying and managing location services for carriers.

Besides a location-aware infrastructure, location services have been waiting for another piece of the puzzle to be put into place: messaging services that are nearly ubiquitously available and actually used by customers.  In this area, U.S. mobile users have long lagged behind the rest of the world, mostly due to differences in price structures (like the huge included voice minutes in many U.S. cell phone plans). But usage has been increasing in the last year. We’ve seen studies by the research group Telephia that indicate up to 20% of all mobile customers use messaging services. Among younger, college-aged users, that number more than doubles.

What kind of services can carriers create with such systems? There’s really a wide range, actually, but we’ll discuss a few that make sense to us.  One good example is merchant-to-customer services like the dinner reservations service shown at CTIA. Location services allow merchants to take another stab at that much-maligned phenomenon of the late ’90s: push services. But this time, merchant content pushed to customers is timelier and more personalized.

Other services that seem interesting, particularly when looked at through the filter of the younger users who are the biggest users of messaging, are “buddy finder” services. Using an opt-in system (which is absolutely essential for privacy and safety in such a system), mobile users can subscribe to a service that lets their friends know when they’re in physical proximity to each other. Combine this with merchant services, and it’s easier than ever to meet your friends at the local café or restaurant or club.

Location-aware services aren’t just good for young urban hipsters – there are definitely enterprise applications. For example, we also saw TCS’s fleet management system demonstrated in New Orleans. Using 3G handsets and location services, this system provides monitoring and dispatch of vehicles similar to that provided by Qualcomm’s OmniTRACS system. But it uses the installed mobile infrastructure instead of satellites, which gives local mobile service providers a chance to get into this lucrative field. And the enhanced capabilities of 3G handsets entering the market may enable enterprises themselves to abandon their costly legacy platforms for fleet management, and instead use off-the-shelf devices like PocketPC phones.

While these services (and the dozens of others we saw demonstrated) are undoubtedly cool, the bottom line is, as ever, the bottom line. The vendors we spoke with have all created return on investment analyses and business cases to demonstrate the profitability of location-based services. Better than any model is real world experience, and we should soon see the results of location-aware services in action. TCS and its partners have launched their location-aware services in Hutchinson’s 3G “3” network in the U.K. and in other European and Asian markets. The “3” brand was quite a bellwether at CTIA; many of the companies we spoke with featured their participation in the service roll out. We’ll be watching the results closely to see how Hutchinson’s location services are succeeding.