Presence is Everything
By Dave Mock, Thu Nov 08 00:00:00 GMT 2001

Do location-based services - based on presence detection -have a better chance of defining the next-generation services than high-bandwidth applications?

Many of the arguments forecasting the slow acceptance of 3G wireless services hinges on the statement that broadband applications simply provide little value to most mobile users today. Especially with initially high user costs for these data-intensive connections, many wireless customers will balk at the service due to the lack of perceived value compared to the price paid.

So while broadband data speeds can enable some pretty cool applications, most will likely only find use with a small fraction of the mobile world - those willing to pay handsomely for video streams or high-priority data.

If this assumption proves correct, what then will 3G offer the other 95% of the wireless world? Many people rightfully argue that 3G is about a lot more than just high data rates on phones and PDAs.

Some believe that the next generation of wireless technology will be characterized more by location-based technologies - those tools that provide unique information to mobile users based upon their physical location. Even with concerns about privacy and "opt-in" requirements for fear of big brother watching our every move, location services can be a powerful tool.

While the initial excitement about the capabilities centered solely on receiving location-sensitive coupons, this was largely an aberration from days when Internet advertising was big business. Beyond the debated merits of this application there are a whole slew of creative services to come.

What's developing lately is a new mentality about what location services can do for mobile users and what would actually create value. Unique services, such as those for real-time traffic navigation for instance, rank high on the list of applications that millions of weary motorists would embrace.

Have you ever arrived at a meeting place only to find your friend not there? Are you in the right place or is he or she just running late? A simple location ping could help you meet up without the complexity of dialing up each other and coordinating turn-by-turn directions.

Mobile location capabilities have the potential to add a new twist to old problems - leading to solutions for which consumers may be willing to pay.

First thing's first

Of course, before many of these location-based services can be launched, we actually need the ability to automatically locate wireless subscriber units. This ability to automatically locate a mobile unit is sometimes referred to as presence detection. Unfortunately, the efforts to get adequate technology in place have been stalled beyond the timeframe that most would have liked to see.

While some networks designed specifically for fleet tracking have the ability to locate mobile users, the cellular networks in the US sorely lack this capability. Many watching the industry develop in the US were encouraged by the fact that government requirements for E911 services in the US would hasten the process along.

But with all the major wireless service providers missing the FCC mandated deadline for E911 services, the regulatory motivation behind deploying location technology has failed to force this evolution.

Without the widespread deployment of infrastructure for automatic location information (ALI), the only markets currently being addressed are those in the area of transportation. In these business applications, locating a wireless unit is more about managing the flow of goods.

"We need the capability for presence detection in the networks before the value of location based services can be fully realized", insists Michael Rolnick, a partner with venture capital firm ComVentures. Without it, LBS is relegated to niche markets.

The cost of integrating GPS capabilities (or similar technologies) into cellular handsets and networks is one of the main reasons why automatic location capabilities are a concept for the future. If visions of financial returns on their investment were more firm, carriers have more motivation to move quickly.

All is not lost

Even without the infrastructure to provide automatic location information in place, some companies are already making headway with LBS in the United States. A small private company, Go2Systems, has been working for years in an industry that has barely begun; yet they have shown surprising progress.

Go2Systems provides location-based directory services to almost any Web-enabled device, be it fixed or mobile. Acting as a virtual "Yellow Pages", their application is on the front deck of every major cellular service provider in the US.

The Go2 service provides easy access to a comprehensive database of local businesses and points of interest. To be effective though, a point of reference for the retrieved location information must be established. While some think this process is unmanageable for users of mobile terminals, Go2 sees it differently.

"We allow them to save locations, use our abbreviated location designators, and easily designate any business as a location to search from or for - all without having to enter or re-enter long and cumbersome street addresses" says Lee Hancock, CEO and founder of Go2Systems.

Go2Systems has developed a proprietary mapping system that takes cryptic latitude and longitude coordinates and translates them into more readable regional code. With a resolution of 10 meters, their system provides a reliable way of navigating your way to restaurants, movie theatres, or other businesses.

The number of users for Go2's service seem to support the idea that a significant base finds the service useful in spite of the absence of automatic location abilities. Sporting over 1 million unique users, Go2Systems' monthly traffic is growing at a rate of 10% - 15%.

While this is only a drop in the bucket of US wireless users, it's significant considering the early stage of the industry and the wireless Internet in general. With ALI technologies currently being tested with Go2's database portal, indications point to their popularity surging once the capabilities are commercially launched.

Without automatic location of a user wishing to use a location-sensitive service though, applications beyond directory assistance are stalled. After all, the whole concept of E911 is to positively locate people who essentially don't know where they are.

So while Go2's success is encouraging, there's a whole pile of applications waiting in the wings that hinge upon automatic location capabilities.

Great anticipation

While many people think widespread availability of 300kbps video streaming will mark the arrival of 3G in the history books, more progress may come in the form of location applications.

Like SMS, location based services do not require high-bandwidth. If presence detection makes LBS as easy to use as texting (or hopefully easier), there's a good chance it will be the surprise success of 3G just as SMS was for 2G.

Hancock agrees. "Our experience shows that users are typically seeking more utilitarian information which generally doesn't require high bandwidth data transfers" he states.

Certainly, value can be seen in both high-bandwidth services and LBS. But when looking for killer applications in 3G, one has to defer to the lower-cost, high utility capabilities supported by location services.

For the hundreds of millions of wireless users that signed up on low cost plans with inexpensive phones, utility is king. So while high-bandwidth is important to a few, location is key for the masses.

Dave Mock is a freelance writer covering mobile technologies and markets. His published papers help educate investors in wireless markets and are available through and other affiliates. His first hardcover book on investing in wireless will be available from McGraw-Hill in April 2002.