While mobile operators have not be particularly successful in monetizing location-based services, JDSU released a new report that looks at the possibility of carriers mining their own network -centric big data for demographic and location insight that could provide new revenue streams.
JDSU is calling the information “location insight services,” or LIS. While LBS use cases are usually seen as very personal and specific to a mobile user — such as offering a coupon based on one person’s proximity to a retailer — LIS is more aggregated and anonymous, while still providing information that is useful to enterprises for purposes such as retail planning, and information about the habits of desirable demographics.
This is information that operators are often already using for their own network planning purposes, noted Michael Flanagan, CTO of LIS company Arieso — which was purchased for $85 million by JDSU in March.
“Mobile network operators were having to move away from a network-centric view of what was going on, to a subscriber-centric view of what was happening within the network,” Flanagan said.
Operators must take that view, he said, because customers who experience dropped calls or slow data rates often won’t call to complain — they just become dissatisfied and more likely to churn. Arieso’s platform is used to draw information from the network and aggregate it to inform operators themselves about their customers and network traffic, but the company sees a big opportunity in offering some of that information to other businesses which could make use of it.
The move toward Wi-Fi and small cell coverage also makes mobile operators’ network information even more valuable, Flanagan said, because those technologies cover much smaller and more specific areas than macro cells and can provide even more specific location information.
“It’s not an about an individual — it’s about a large group of interest,” said Flanagan. He cited several examples of information that would be useful:
- retailers and retail planners could access information about how many subscribers in a target demographic frequent an area — perhaps men between the ages of 18-44, or women between the ages of 15-25 — in order to choose the most valuable retail locations.
- traffic planners and public transportation agencies could make use of network information about the migration of populations during the course of the day.
- Retailers might also want to know information about stores that were visited before or after one of their locations.
JDSU is predicting that the market for location insight information will hit $11 billion by 2016.
“This revenue stream is a very important opportunity, as the traditional revenue streams from the delivery of voice and data are not really growing at the rate they were during the more heady days of the wireless industry,” Flanagan said.
Flanagan said some carriers are already grasping the importance of this data, such as Telefonica and its Telefonica Dynamic Insights division, and Verizon Wireless’ Precision Market Insights.
JDSU released the report, compiled by STL Partners. Read the full report here.
