Abstract
Maturing Mobile Markets Look toward Location-based Services (LBS) to
Maximize Commercial Success
Struggling to remain profitable amid price competition and falling average
revenue per user (ARPU) from traditional voice services, mobile operators are
actively searching for new strategies to build subscriber bases and reduce
customer churn. As competition intensifies in the mobile communications
marketplace, operators are evaluating a range of location-based applications as
a means of service differentiation. The advancement in location measurement
technologies and the associated development of sophisticated navigational aids,
targeted directories, and tracking services has stimulated demand for LBS.
Indeed, the ability to combine location sensitive services with content tailored
to user's individual interests has materialized as a progressive strategy for
mobile operators to attract new customers, reduce churn and create additional
revenue streams.
This new research by Frost & Sullivan provides in-depth analyses of the U.S.
mobile location-based service industry, with special attention to consumer and
enterprise applications. Readers can benefit from the appraisal of various
location measurement technologies and platforms as well as performance
requirements for a range of commercial LBS. By identifying key drivers and
restraints, and presenting detailed forecasts for each segment, this study gives
its users a privileged view of a market that has lacked in-depth, structured
analysis or business case.
Personalized Combination of Applications - The Key to Build Customer Loyalty
Unlike the passive and fixed Internet users, mobile users are demanding
personalized, localized, and timely access to content and services. With no
tangible return on investment from Enhanced 911 (E911), operators are evaluating
a range of commercial LBS in anticipation of leveraging these services to
attract new customers and generate additional revenue streams. According to the
analyst, "In the absence of a single 'killer application', service
providers will be challenged to offer a personalized combination of services in
a compelling and unique manner. With a host of well-supported applications set
to leverage improving location determination technologies, the essential
ingredients for compelling, value-added location-based services appear to be in
place."
Frost & Sullivan believes that due to high customer acquisition costs and
lengthy payback periods, operators are best off initially marketing customized
location-based services to their installed base of corporate customers. Only
when a strong foothold has been established in the enterprise market does Frost
& Sullivan recommend carrying forward broader consumer campaigns.
Flexible Platforms - A Must for Market Success
Return on investment for operators implementing a commercial location-based
services platform will be correlated with number of customers and the capacity
of the solution. Thus, in order to maximize the commercial, operational, and
marketing benefits of LBS, operators are expected to insist on a wide range of
platform prerequisites to efficiently manage and deliver a full range of
services that can target a variety of customer segments. As networks have
evolved to support sophisticated applications, the implementation of an
efficient, integrated billing mechanism will be critical to capture emerging
revenue streams and maximize profitability. Service providers are advised to
engage in strategic partnerships to ensure best-of-breed billing and customer
support systems that can seamlessly integrate with legacy infrastructure to
support the full spectrum of LBS.
The analyst concludes, "With the advancements in functionality,
compatibility, and availability of platforms, applications, and location-enabled
handsets, there will be a remarkable growth in the LBS subscribers' base from
2004 to 2008. Operators that fail to launch commercial location-based services
in coming years are likely to suffer the consequences in the form of increased
churn and ultimately significant revenue shortfalls." | 
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