Location, location, location

The next big step in m-commerce is not 3G but services that exploit the user's whereabouts, says Philip Hunter

The next big step in m-commerce is not 3G but services that exploit the user's whereabouts, says Philip Hunter

The last big idea in mobile telecoms - prepaid services coupled with cheap or free handsets - was largely a commercial one, albeit hugely successful in bringing the market quickly to saturation point. The next big leap is not 3G, which is just an iteration, but the arrival of services that exploit the user's location.
These services hinge partly on the accuracy with which a handset's location can be identified, but chiefly in developing services that are genuinely useful or desirable and that allay users' fears. The greatest worries concern the potential for breaches of privacy, given that continuous knowledge of location could be exploited. There is also the risk of being bombarded by unsolicited advertisements from retailers and service providers in whose locality the user happens to be.
According to Amit Rahav, vice-president of international operations at Message Vine, which supplies software to mobile service providers, location-based services will only be successful when the privacy question has been addressed. But then they will take off quickly. "When we address rights to privacy, we will create the motivation to start using location services," says Rahav.

Subscribers must be given ownership and control of their location details on an opt-in basis, so that information is not divulged unless permission is given. This should take care of the immediate location, but there is still the issue of exploiting historical data that could be useful for online marketing purposes. This could be covered by the same legislation that governs personal data and similar technologies.
Evidence from trials conducted so far suggests that Rahav is right to be optimistic that location-based services will be popular. The UK's first major location-sensitive mobile phone advertising service called ZagMe completed a three-month trial run in two home counties shopping centres in March this year. This involved 150 retailers and 33,000 consumers opted-in to receive alerts about exclusive offers from stores within the centres, relayed as SMS messages that could be redeemed as vouchers.
During the trial, 30% of subscribers reactivated the service by opting-in again after trying it and 12% did so more than four times. It also proved cost-effective for retailers, with typical cost per response for a shop being £3 compared with £55 for direct mail. It remains to be seen whether the enthusiasm will last.
ZagMe is an example of pushed online advertising, which is one of six categories of location-based service, although this list is constantly growing. The other categories are:
  • User-solicited information, such as traffic news, local weather, and what's on in the area

  • Instant messaging, for communication between people within a locality
    Real-time tracking, which can have various applications such as following a package in transit via a stripped-down wireless device

  • Mapping/route guidance for helping people reach their destination

  • Emergency services not continuous - specifically for locating an emergency, such as a vehicle that has broken down

  • Location-based tariffs that allow mobile operators to charge according to the user's location.

All these services are being developed and some are commercially available and have potential interest for businesses.

There are significant IT challenges to overcome, but this will not deter mobile operators who will invest heavily in the hope of opening new revenue streams.

Location methods

There are three main options for locating a mobile phone:
Cell of origin - This specifies the cell area of the mobile network base station through which the caller is communicating. This is the least precise option, with accuracy ranging from a few hundred metres in urban areas to 10km or more in rural districts. It scores by being quick, taking a second or two to obtain the location details and feeding them to a content database. It is also the cheapest to implement, requiring no upgrade to either handsets or the network. It is used for most current traffic and "what's on" services, including BT Cellnet and Vodafone
Time of signal arrival - More accurate than cell of origin, this method works by comparing the time taken for radio signals to be transmitted between the handset and each of at least three nearby base stations. However, the accuracy of the method as it is implemented over existing GSM networks is limited by the fact that when handsets are not in line of sight with any of the nearby base stations, the signal takes longer in transit because it bounces off objects such as buildings en route. An enhanced method has been developed to cope with these timing errors, but this requires the bandwidth of 3G networks. With the basic method, accuracy is about 60m, but it will improve to about 6m with 3G. It can be used with existing handsets, but requires extensive network upgrades, making it the most expensive option for operators

Global Positioning System (GPS) - This works by incorporating a satellite navigation receiver in the handset. Potentially, it is the most accurate option, already achieving levels of 10m. Relatively low cost navigation systems and further improvements are likely to bring this down to about 2m. The drawbacks are that it requires line of sight to a satellite, so that it cannot operate in a building and the signal decoding is computationally intensive, taking 20 to 40 seconds in a mobile handset device. To bring this down, fixed GPS receivers could be installed at regular 200km to 400km intervals to assist with the signal decoding. This would bring the time down to one to 10 seconds.

In future, it is likely that GPS and time of signal will be used in conjunction, because there will be times when a handset is out of range of one but not the other. GPS is always available outdoors, when there may not be enough base stations in range, but is no use indoors except via a satellite receiver on the roof.

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