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Beyond location, operators can mine data for context-based services

Carriers sit on a goldmine of user data that could launch context-aware services, but they must review regulatory and compliance issues carefully.

Continued from part one, How expanded location-based services can lead to increased revenue from context-aware services.

Taking context-aware services to a level beyond location-based information is the next step in testing the revenue potential of context-aware services. For example, collaborative applications have long recognized that users have a presence or a communicating state. Someone who is busy doing something doesn't necessarily respond well to interruptions. So an element of putting information in context is whether a user is typing, reading a text or an email, or on a call.

Beyond that, knowledge of who users typically text or call, either during a particular time period or at any time, provides valuable context. A user strolling past a store or talking with a friend while strolling might be much more responsive to a location-based services ad for a special than a user hurrying to a meeting or talking with a client.

Operators, particularly mobile network operators, have rich sources of contextual data at their fingertips. It is collected not only from a single user but on the user populations as a whole. Simply understanding cell-site registration trends will provide information on crowds, and user call records provide information on user behavior over time. Much of this data is either unavailable to other players, such as OTT competitors, or could be generated only with a lot of effort and cost. The cost and difficulty factors are what make it commercially valuable.

Operators that can sell contextual services directly will obviously earn more money than those that sell contextual information to third parties. A roll-your-own contextual service also keeps what could become sensitive information within the operator security envelope, reducing legal and compliance risks significantly.

The risk of regulatory or compliance issues arising from contextual services is very real, but also very difficult to assess in a general way because regulatory policies and practices vary considerably at a global level. It's important for carriers to get a regulatory review of the collection or use of contextual data, and to reassess risks with any changes in the regulatory framework.

It may be possible to tune the collection and use of contextual data to reduce risk. A similar review can be helpful in aligning changes to capex or opex to address contextual service opportunities. Nobody wants to make a massive capital investment where the basis of a business case could be swept away in a shift in regulatory policy. Fortunately contextual services require a relatively low incremental investment, so deployment need not be risk-free.

Operators' revenue per bit continues to fall at a pace approaching 50% per year, and it's impossible not to see this as a signal that operators need to look beyond transport for future profits. Contextual services can harness the opportunities already being created in the mobile space and extend those opportunities to adjacent areas to magnify the value of services to users and their profitability to operators.

Next Steps

Boston enhances emergency response with location data

This was last published in May 2014

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