Mobile location-based services on high demand

BANGALORE, INDIA: Location-based services (LBS) in Asia-Pacific are expected to see strong growth in the next five years, with wider adoption in the more advanced and saturated mobile and mobile data markets.

New analysis from Frost & Sullivan, Asia Pacific Location-based Services Highlights, finds that the mobile LBS market covering 13 Asia-Pac countries earned revenues of $383.6 million in 2007 and expects this to reach $2.8 billion by end-2013, at a CAGR of 39.3 percent (2007-2013).

Japan and South Korea are the leading adopters of LBS - given the highly sophisticated and mature mobile data segments in these countries - respectively accounting for 49.5 percent ($190 million) and 43 percent ($165 million) of the total Asia-Pac revenues in 2007.

M Kumaresan, senior industry analyst, Frost & Sullivan, said: “Concerns regarding privacy infringement, erroneous detection and interoperability issues, high roaming charges, and the lack of global positioning system (GPS)-enabled handsets have to a large extent thwarted large-scale deployment of LBS systems in most Asia-Pac countries other than Japan and South Korea."

LBS in the rest of Asia-Pac have largely remained a niche offering until recently with the more mature mobile markets of Australia, New Zealand, Singapore and Taiwan experimenting with such differentiated value-added services in an attempt by operators to sustain revenues.

“In these countries however, the demand for LBS will be driven mainly by enterprise users for applications like fleet tracking and asset management; unlike Japan and South Korea where the appetite for consumer LBS applications is high,” Kumaresan added.

“Apart from the sophistication of LBS technologies and available services, the popularity of LBS solutions is also determined by lifestyle and consumer behavioural patterns, which have a huge impact on market dynamics.

Subscribers in these two markets are accustomed to using such services for location-based proximity and entertainment-centric applications,” he elaborates, adding that community creation, child-locator services, crime-preventive LBS and other such innovative applications are expected to be more prevalent in Japan and South Korea moving forward.

Kumaresan believes that the increased bandwidth and ubiquitous network coverage across the region is expected to fuel the growth of LBS. “The deployment of HSPA and impending WiMAX networks and the already advanced mobile broadband technologies are expected to serve as catalysts in the adoption of LBS,” he says.

In the near term however, he says that operators in the developing markets with low mobile penetration are likely to focus on adding new subscribers and driving data traffic with basic mobile data services.

Although he explains, “given the huge popularity of peer-to-peer and personalised SMS, personalized push-based content by location information will be a key driver towards mass adoption of LBS-type applications.

“Integrating LBS applications with mobile advertising is also a potentially attractive revenue model that operators would be looking to adopt,” Kumaresan adds.

He notes however that the LBS value chain is currently fragmented with numerous participants. The typical LBS ecosystem comprise geographic information service (GIS) or map providers, application developers, content providers and aggregators, merchants and advertisers, platform and infrastructure vendors, handset manufacturers, and mobile operators.

Learning from the Japanese and Korean experience, a conducive ecosystem is one with mash-up offerings. Kumaresan believes that over time the value chain will evolve region-wide, with integrated service and content providers.

“Japan and South Korea are expected to lead in developing a comprehensive business case and commercial model that can eventually be replicated across the region,” he concludes.