Beyond E-911: Moneymaking Geolocation Services

Posted: 12/1999

Beyond E-911: Moneymaking Geolocation Services
By Gary Ritter

The Federal Communications Commission (FCC) unleashed tremendous potential when it
mandated wireless E-911. The commissioners wanted to assure that wireless phone users
received the same emergency service response that wireline callers did, and rightly so.
But could they have foreseen the geolocation commercial applications likely to result? Did
they realize that once wireless carriers deployed the infrastructure to support the FCC
mandate, those carriers also would be able to generate significant revenue streams?

The bottom line for service providers is that geolocation services beyond E-911 in the
intelligent network (IN) are going to be big. The IN, which has been around for at least
10 years, is gathering the momentum initially predicted. Wireless prepaid and short
message have been its two biggest draws. Now, geolocation services bring additional
promise.

Most of the attention has been focused on the ability to locate the mobile device.
However, once the location data is available, what can be done with it besides sending it
to the appropriate public safety answering point (PSAP) (i.e., the emergency call center)?
Commercial revenue-generating geolocation services lie in the answer.

Home-Based Zone Billing

One of the better-known location-related applications is home-based zone billing. Such
a service allows calls to be rated and billed based on the location of the caller. At the
GSM World Congress earlier this year, a European carrier made a presentation that
illustrated the dramatic potential for the service. In rolling out its version of
home-based zone service, the carrier experienced a 25 percent increase in mobile phone
subscribers using their wireless phones at home over the general population’s use of a
mobile phone at home. For those subscribers using the service, minutes of use (MOUs)
increased by 150 percent from a baseline of 100 MOUs to more than 250 MOUs per month. For
the carrier, the bottom line was that home-based zone service, when properly marketed and
priced, overcame the traditional objection of many subscribers that mobile is more
expensive than wireline. The service was a clear success. Having home-based zone service
is no different from having multiple handsets in the home, until a subscriber leaves the
house and begins billing at a higher mobility rate. Home-based zone billing allows
penetration of low- and medium-usage customers, such as the "glove box" users,
who buy a phone for safety and stick it in their car’s glove box, as well as other
price-conscious consumers. Once they discover the benefits of using a mobile phone as both
their home cordless and as a convenience outside the home, they’re no longer part of the
great, untapped wireless market. They’re hooked.

Typically home-based zone billing has been a database service, either on the switch or
implemented on a service control point (SCP). However, once carriers deploy services in
this manner, they often find a variety of problems as their penetrated subscriber
population grows. To provision the tables supporting the home-based zone database, cell
sites must be coordinated with the location of the subscriber’s home. This can become
quite complex, and the complexity usually extends to the customer-care department, which
is charged with assuring that the customer is assigned to the proper home-based zone.

Home-based zone service implemented through the billing system and via customer
premises equipment (CPE) also has been tried. These methods have encountered their share
of difficulty as well. As with table-based solutions, the billing system technique is tied
to the cell ID. To meet phase two of the FCC mandate, the mobile must be located within
125 meters and requires location-finding equipment (LFE). Adapting billing systems to
accept LFE input will be a daunting task, one unlikely to find many who will attempt it.

One of the primary issues with home-based zone service built through CPE architecture
is the required equipment that is located on the subscriber’s premises. How many people
want to spend more money associated with their mobile phone? In addition, deploying the
service in mass numbers with CPE might well challenge the resources of many wireless
carriers. Purveyors of this methodology also may find it difficult to meet the FCC’s phase
two location requirements.

Industry vendors attack this problem with varying degrees of success. One solution is
using geographic information system (GIS) technology and currently available mobile
phones. The difficulties of provisioning are overcome through the capability of enabling
the customer-care representative to simply type in the subscriber’s home address.

People often visit websites where they can obtain directions by entering address
information, which is translated into geographic coordinates–a latitude and
longitude–and calculated to provide the requested output. Provisioning using GIS is done
similarly except that it’s done in the IN and the call flow supports hundreds of
transactions per second. Maintaining home-based zones is accomplished by uploading new
radio frequency (RF) coverage data, also through the GIS workstation–a relatively simple
task that can take a fraction of the time of the aforementioned table-based solutions. As
carriers evolve their networks to include LFE to meet the wireless E-911 mandate, this
solution accepts the more granular location information made available to it.

Overall, the benefits of home-based zone service are compelling to wireless carriers.
The service provides a means of penetrating markets not normally accessible. Many people
purchase a second line in their home because they’ve found they need voice access while
they’re on the Internet. Why not purchase a mobile phone for that purpose, especially one
that provides comparable rates to those charged by the wireline carrier? Such a service,
besides gaining new users and increasing the average minutes of use, can reduce churn
because of the bonding effect subscribers experience, an effect of particular importance
to the competitive service providers interested in growing its market share and
consolidating the hold on the market it already has. Does it make sense for customers to
leave a wireless carrier that offers such value? Would a service provider offering both
wireline and wireless services cannibalize its wireline business? Possibly, but it could
be looked at as freeing valuable wireline resources.

Real-Time Internet

Another highly visible geolocation application focuses on delivering real-time Internet
content to mobile subscribers. The report by the Strategis Group, Washington, shows an
interest by 23 percent of current wireless users in information services that have a
location component, with localized traffic conditions, driving instructions and
restaurants among the most popular attractions.

Consider a restaurant locator service. A mobile phone user in a strange area could call
the service for an interactive menu of nearby restaurants. The service could provide the
three nearest restaurants with his choice of cuisine to the user’s location, provide the
address via short message, and optionally route his call to the restaurant he chooses. As
technology rapidly moves forward with wireless application protocol (WAP), a map with
instructions to the restaurant from the user’s current location might be downloaded to the
mobile device.

The range of location-sensitive information content services is broad. They can be
categorized into data and voice, attended and unattended services. The concept of a 411
concierge service is popular and an example of a voice/attended application. Despite the
price of directory assistance, millions of people dial 411 every day, paying upwards of 75
cents per call simply to obtain a telephone number. Directory assistance is information,
pure and simple. People are hungry for information and prove it by making those calls and
by spending their valuable time each time on the Internet searching electronic yellow
pages or other sources. Guess who is among the most information-starved? Wireless phone
users. They’re on the go with minimal access to information.

The wireless carrier that solves this problem has a winner. In fact, anecdotal evidence
through focus group research by SignalSoft Corp., Pittsburgh, indicates that 100 percent
of mobile subscribers would use a location-based information service if the price per call
were 50 cents, while 85 percent of them would use it if it were priced at 75 cents per
call. Concierge service, which might include driving directions or other such functions
and could enhance existing 411 call centers, could provide a profitable sideline for
wireless carriers in that business.

Collecting fees through subscriber calls is only one of several revenue models
associated with geolocation information. The Internet provides a useful analog for
advertising charges. When users go to a web page and see an advertisement on the screen,
the action is considered an impression. If the user actually goes to that particular web
page, the action is considered a click-through. Rates vary, but an impression may be worth
as much as a nickel apiece and a click-through up to a quarter apiece. In the restaurant
example cited before, being listed among the choices might be equivalent to an impression.
If the user actually completes the call to the restaurant, that might be similar to a
click-through. Presumably the charges to advertisers in a wireless phone model would be
commensurate with the volumes generated and the expected audience.

Other illustrations of how the service might evolve to one that attracts a significant
piece of advertiser dollars can be found in yellow pages or billboards. Each of these
medium brings in millions of dollars every year, despite the fact that they are static
methods of advertising. However, what does each form attempt to do? Lure people into the
front door to spend money with the advertiser. What if the form of advertising was more
dynamic? It is the considered opinion of many in the industry that branded services such
as "FedEx" or "Hyatt" would command top dollar because they appeal to
wireless users specifically looking for a particular service. The intent of these services
is to bring people into the bricks-and-mortar establishment. Once they’re inside, such as
at the drop box or in the lobby, chances are money will change hands.

Tracking

Another geolocation service that has received the attention of many carriers is one
that centers on tracking the mobile phone. It’s gathered its share of opponents as well as
proponents. Privacy advocates urge caution, but the range of possible applications again
is large, with many services beyond their concern. Services cover the gamut from fleet
tracking of trucks or taxis, to packages, children, prisoners and Alzheimer’s patients.
Simply by using a mobile device–a phone or even a chip in the future–and by using
location-finding equipment rather than conventional global positioning system (GPS)
equipment that can run into the thousands of dollars per unit, tracking suddenly becomes
affordable. It becomes something that can be marketed and deployed on a large-scale basis.

We certainly don’t want to forget the FCC mandate is the catalyst for deploying the
additional services discussed here. That’s one of the beauties of geolocation services
deployed in the IN. Once the infrastructure is in place to meet the mandate, adding new
applications is a natural evolution. The service meeting the wireless E-911 requirements
uses the same base components as the commercial services discussed above. Based on
standard non-call-associated signaling architecture and deployed on a SCP, it doesn’t
require major circuit or equipment changes by the wireless carrier or the PSAP. It’s
immaterial which LFE technology the wireless carrier implements. Its inherent flexible
architecture accepts many LFE types today and can be adapted easily to new ones in the
future.

Geolocation services in the IN are a soon-to-be-exploding market. They can be deployed
using switch cell/sector location information and will accept more granular data from
location-finding equipment readily. The revenue potential is huge since location soon will
be a core resource at the heart of every network. Location is one of the keys to the
profitable future of wireless. Carriers that see this potential and act sooner rather than
later are the ones that will reap the greatest rewards.

Gary Ritter is product marketing manager for Lucent Technologies Inc., Murray Hill,
N.J. He can be reached at gritter@lucent.com.