How important are location-based services to wireless carriers?

How important are location-based services to wireless carriers?

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Wireless revenues have generally followed the commodity-revenue death spiral, where wholesale pricing is the end game and where price chases cost. This is not a very good place to be if you are a carrier.

The only way out is to constantly develop new service offerings that either can be offered as a premium service or to drive up demand. One possible type of service offering that could do both is location-based services, where applications can be made location-aware.

With the advent of GPS-enabled mobile devices and downloadable applications, location-based applications (such as location-enabled directory services and sponsored navigation services) are easy to deploy. Both allow the carrier to charge businesses to enable such search capabilities (think Yellow Pages with the added virtue of location awareness.)

The problem, of course, is that with a smartphone that can determine its own position using a built-in GPS transceiver, application developers don't really need the cooperation of the carrier to offer competing services … some of which are free. The challenge for carriers is to build location-based services that integrate with other carrier services in such a way that the premium can be maintained.

Stratecast covers the integrated service and connected home spaces, and believes that the pursuit of location based-services that leverage an integrated environment represents a substantial opportunity for carriers that they would be wise to develop.

This was first published in April 2011

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