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Operators forecast $12bn LBS revenues - but demand low cost enabling technology

October 14, 2003

Mobile operators are forecasting major growth in revenues from high accuracy location-based services to almost $12bn by 2005 – but only if low cost mass market enabling technologies are in place to drive the market.

Overall, operators forecast average annual revenues of $12 per subscriber from location-based services in 2005 – growing to $35 by 2008 - according to an in-depth operator survey by Cambridge Positioning Systems (CPS).

The company recently completed a series of workshops with leading operators from all over the world to explore current and future location-based service strategies. Collectively, the operators served over 30 per cent of the global GSM subscriber market – in both established and emerging GSM markets.

As a result of the workshop programme, 10 operators are now planning trials of CPS’s Matrix location solution, which offers high accuracy for under $1 per subscriber.

The main research findings were:
- demand for sub-100m high accuracy solutions is growing as operators seek to differentiate their service offerings in saturating markets – with operators now pushing for trials of new location technologies
- likewise, new market entrants are looking to high accuracy LBS as an immediate marketing advantage in the fight for customers
- however, while high accuracy location solutions will be the catalyst for location-based services, deployment costs must be extremely cost-effective if they are to kick-start mass-market LBS adoption
- Cell-ID based services have proved disappointing in terms of application innovation and consumer take-up
- corporate vehicle, fleet and workforce management will help drive early usage of high accuracy services in the corporate and SME market
- the major consumer market driver will be information services, with rapid growth predicted for personal and child safety services
- mobile gaming and m-coupons, cited as a strong growth areas in industry reports, will remain niche markets with slower than expected growth

CPS Chief Executive Chris Wade said: “We wanted to find out exactly what people are thinking right now about location based services. Through our business modelling workshops, we explored a range of scenarios for current and future services and all-important revenues.

“The results were very encouraging in terms of operators growth strategies but underline how the business model only works if enabling technologies are low cost.”

 


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