Cellular carriers spent millions deploying positioning technology to satisfy FCC requirements for providing e911 services. Now, having toed the government line, they appear set to reap unexpected rewards.

FCC regulations stipulate that when a mobile subscriber dials 911 in an emergency, the carrier must be able to transmit the subscriber's geographic position to the Public Safety Answering Point (PSAP) where the call is received. Most can now perform this function because of the installation of satellite or cellular network-based positioning systems.

As we saw in the first in this multi-part series on handset GPS and location-based services (see Mobile GPS: Part 1 - Behind the Rise of Location Services), the carriers originally viewed the investment simply as a necessary cost of doing business but have now come to realize they can use the technology to offer a variety of location-based services for consumers and businesses that could generate significant new revenues. Services include turn-by-turn navigation, people and asset tracking and location-based dispatch.

"Once they'd paid for it, they started saying, 'Well, we've got this infrastructure now. Why not take advantage of it,'" says Ken Hyers, principal analyst in the wireless group at ABI Research..

That's what U.S. carriers are starting to do now, though they lag well behind Japan and other Asia-Pacific markets and, according to ABI, will not catch up for several years. The market research firm says that by 2010, 15 million North American handset owners will be paying for location-based services. In the Asia-Pacific market, where 10 million users already subscribe to LBS, the total number of subscribers by 2010 will top 67 million.

Pioneers
Some U.S. carriers began offering services a few years ago, but the market failed to develop as anticipated. This was at least partly because of concerns about privacy and security. One idea at the time was to offer retailers a way to send ads or special offers to subscribers when they were close to their business. A message would pop up on the user's phone offering a time-limited discount on merchandise. Privacy advocates raised the alarm.

While little is heard these days of electronic coupon applications, privacy concerns are still prevalent. Some of the proposed consumer services today, while far more useful, are even more open to privacy and security abuses. All in one way or another involve tracking the location of subscribers' handsets—to provide parents of young (or teenaged) children and Alzheimer patient care givers with a way to check on their whereabouts, or to track a vehicle so roadside assistance services can find drivers in trouble. It's not hard to see the potential abuses of that kind information falling into the wrong hands.

"It would take just one stalker getting a child's location in this way and the service provider would go in the tank," says Hyers. "They would lose two million customers just like that."

The people tracking applications, while they may be coming, have yet to appear, except, as we'll see, in the business market, where employers are presumably within their rights to track employees. More common are the asset tracking and navigation services.

In 2002, AT&T Wireless introduced handset-based navigation tools using not-very-precise first-generation cellular positioning technology with an accuracy range of 300 feet to two miles. Cingular Wireless, which acquired AT&T last year, continues to offer those services to AT&T subscribers, but has neither developed nor offered anything new. It is reportedly researching LBS suppliers now with a view to offering more advanced services.

Trail Blazer
Also in 2002, Nextel began offering location-based services. Unlike AT&T, Nextel stayed the course and continued to introduce new services. It now offers more than ten from a variety of suppliers. "Nextel has really blazed a trail," says Hyers.

Nextel, recently acquired by Sprint , is unique among wireless carriers in using iDEN (Integrated Digital Enhanced Network), a proprietary wireless communications technology from Motorola that provides support for voice, data, short messages (SMS) and dispatch radio (two-way radio) in one phone. In the LBS arena, Nextel had the advantage of having deployed A-GPS (Advanced Global Positioning System), a much more accurate satellite-based positioning system than the one used by AT&T in 2002. The first GPS phones for the Nextel network appeared two-and-a-half years ago.

There was also a conscious decision at Nextel to pioneer the market for location-based services. "We saw this technology really being a major differentiator and offering us a competitive advantage," says Mary Foltz, director of location and mobility services at Sprint Nextel Corp. "We knew that with push-to-talk users, on a high percentage of calls, the first question people ask is, 'Where are you?' So we figured we could save customers a lot of time and money."

The Nextel brains trust had also seen the emergence of GPS-based turn-by-turn navigation systems for vehicles and realized that if the same kind of capability were built into a phone, it would make the phone "an incredibly useful device. It was a bit of a risk," Foltz concedes. "Nobody had done this yet, but we wanted to be the first. We got in in a big way."

Nextel made the savvy decision to open its phone interface to third-party developers to allow them to develop GPS applications for Nextel phones. That decision paid off handsomely. The company has worked with several developers and now offers services from seven. More of them relate to tracking and dispatch—Nextel is clearly focused on the business market—but it also offers turn-by-turn navigation services.

Take Turns
TeleNav from TeleNav for example, offers a turn-by-turn service that works much like services from stand-alone GPS service providers such as Garmin, except the technology is built into a phone. Maps and directions are delivered online. As with the Garmin products and others of its ilk, a dashboard mounting kit with a small speaker is available. TeleNav costs $10 a month, which includes 10 routes per month and 500 KB of data access.

"I take it when I travel," Foltz says. "When I get off the plane, I put in my destination, set it on the dashboard and it starts talking to me, giving directions. The screen has a simple arrow [showing the direction]. You could glance at it from time to time, but it's not like you're trying to read instructions."

Motorola's ViaMoto offers a turn-by-turn navigation service that also provides supposedly up-to-date information about traffic conditions and locations of nearby amenities and points of interest. Prices range from $9 to $10 per month depending on length of contract. Nextel also offers navigation services from MapQuest and a trucking-specific service from Alk Technologies.

It offers an even greater selection of services that let companies track the location of mobile employees or assets. Are they where they're supposed to be? Which employee is closest to a customer site? Where have employees been and where have they stopped? Who needs to be warned about a major traffic jam?

Location Location Location
Many can be integrated with other applications, including billing and job costing. And many include navigation capabilities as well. Small businesses often use these services along with voice or SMS dispatch using the Nextel voice network. Bigger firms integrate them with existing data-based dispatch systems.

Hyers repeats one Nextel anecdote about the innovative ways companies are using tracking services. A limousine company was hired to ferry guests to a wedding. The guests arrived at the church late and drunk because they insisted the limo driver stop at several bars along the way. They excused their lateness by claiming the limo driver got lost. The irate family of the bride threatened to not pay for the limo service, but the limo company subscribed to a Nextel tracking service and was able to show its customer exactly the route the car took and where it stopped.

Mobile Locator, offered directly by Nextel, lets customers view a map on a PC screen showing the location of mobile employees carrying a Nextel phone or Nextel compatible BlackBerry 7250. The cost is $15 a month per employee or $20 with text messaging.

GPS-based tracking and management services from Nextel partners offer additional functionality. Xora GPS TimeTrack from Xora Inc., for example, provides onscreen maps showing the location of vehicles or employees, but it also lets companies import data into time and billing, job costing and other applications and integrate it with dispatch systems. Prices start at $9 a month per phone.

Other tracking services from Nextel include Etrace by Gearworks Inc., Comet Tracker by ActSoft Inc., TeleNavTrack by TeleNav and CorrigoConnect from Corrigo Inc., a wireless and Web-based work order and dispatch management solution for service organizations.

Sprint has now jumped into the LBS market with its recently announced Sprint Precision Locator, a tracking service aimed at small and large businesses that will allow them to track locations of workers and assets on onscreen maps at a PC console, create landmarks on the maps, location-enable scheduling, use text messaging to reach mobile workers and analyze reports on workforce location history to determine where they can gain efficiencies.

Most of Sprint/Nextel's attention to this point has been focused on business applications, but one Nextel service, from Trimble Outdoors, is clearly aimed at consumers - or at least the consumer side of the company's business subscribers. The Trimble service makes it easy for hikers, bikers and boaters carrying a Nextel camera phone to take a picture using the phone, attach GPS location information to the picture and post pictures and text to the Web or e-mail them to friends as a visual diary of a trip.

Target Consumers
The real future of the market will be consumer services, Hyers and others believe. One with good market potential is child tracking. The service would let parents see exactly where their latch-key kids are and where they've been and automatically send alarms when they deviate from their usual routine or route.

Hyers also believes there is tremendous potential in location enabling other applications - much as businesses have location-enabled dispatch, for example, to make sure they dispatch the service person closest to a customer to save travel time. Location-enabled text messaging is one possibility. Find out where your buddies are so you can meet up.

What's holding the carriers back? "The privacy concerns are just monumental," says Hyers. "The carriers don't want to roll out these services until they're absolutely sure they can ensure subscribers' privacy and security. The negative fall-out from breaches would just be too awful."