By 5 February 2013 | Categories: news


One of the 'hot' areas for mobile applications and telecommunications industries to watch apparently comes from location based services (LBS).

Indeed, LBS is emerging as a lucrative arena for growth, with market researcher ABI predicting that the global LBS market will grow to a total not-so-shabby value of $17 billion by 2016.

This, ABI elaborated, was due to the growth in retail applications, advertising, and emerging markets, while LBS is further expected to receive a significant boost from growing competition and “massive innovation.”

According to Quentin Joubert, the product manager at mobile technology solutions and applications company Cellfind, a subsidiary of Blue Label Telecoms, there are several distinct trends which he believes will play a part in shaping the LBS market over the next five years.

Show me the money
The first, and perhaps most obvious of these, is that the focus for LBS is on monetisation. While he noted that LBS are widely available for a range of navigation, personal safety and entertainment applications, and the user base is growing at a rapid rate, the monetisation of this user base has not yet happened.
Joubert elaborated that the major challenge all players in the value chain face over the next couple of years, is turning the traffic LBS generates into a revenue stream and into a viable business. With this in mind, users can expect to see a range of freemium, subscription and advertising supported models emerge around LBS.
Further helping matters is that there are several valuable uses for the technology that could prove both profitable from a business point of view, and useful for users. For example, Joubert noted that call to action services such as roadside and home assist as well as panic-button activated emergency medical services are examples of services that users may see enough value in to be willing to pay for them.

Stick around

Another trend that could influence LBS in the years ahead comes from operators themselves, who may be inclined to promote location based services as they respond to the need for “subscriber stickiness.” Joubert elaborated that the mobile market is changing rapidly as a result of general users shifting from voice to data services, lower interconnection rates, and growing price competition.

He added that for South African mobile operators seeking new ways to bolster their revenues, LBS could offer a way to take advantage of a revenue-boosting class of subscription services. No less importantly, it could alternatively be used as a way to enhance subscriber loyalty, particular if LBS are used as a valued added service to subscribers.

Business bounty
The third trend that could shape the LBS landscape is its use by businesses, with mobile operators and application providers apparently eyeing the lucrative enterprise market. Joubert pointed out that from mobile advertising to asset tracking as well as transport and logistics, there are a wealth of business applications that can benefit from LBS.
“It’s an especially attractive market since corporate users will be willing to pay a premium for reliability and accuracy when it comes to apps that allow them to, for example, track assets such as vehicles and equipment, or to manage and deploy field service technicians in the most efficient manner,” he continued.
Additionally, LBS could have relevance in particular vertical industries; for example, LBS could be used to add another layer of authentication in credit card payments – something which could offer significant benefit to the financial services sector.

To the point

In short, it is clear that estate agents are not the only ones with reason to fawn over the ‘location, location, location’ cliché, as mobile operators, businesses and application developers may well see this become their mantra over the next few years as well.

Indeed, from an information point of view, determining user’s location, and making this information useful and profitable, might just be the next ‘holy grail’ of sorts as we move into this current decade. 


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