Ana M. Bernardos, Paula Tarrío and José R. Casar
ETSI Telecomunicación, Universidad Politécnica de Madrid, Ciudad Universitaria s/n, Madrid, Spain
Keywords: Location based services, mobile location services, business models.
Abstract: This contribution aims at identifying classes of differential features of mobile location services,
as a framework to understand their value chain and business models. With the purpose of
recognizing LBS horizontal common features, we conceptualize a functional taxonomy from an
empirical analysis of current commercial mobile location applications. Afterwards, we propose
and use an evaluation model to describe mobile location services considering their technological
aspects (network technology, accuracy needs, location techniques, etc.), but also the user
experience (value proposal, user interaction methods and type of delivered contents or privacy
management) and some related business issues (involved stakeholders, value chain and revenue
model). To exemplify the proposed model, a number of in-market services are reviewed.
Location based services (LBS) have now a place in
the wireless world market. In 2001 an unbounded
optimism hyped what finally was a slow and limited
adoption of a number of these services. Since then,
positioning technologies, applications, and business
models have been evolving: at this moment, most
mobile operators offer in their portfolio some
location based services and a number of companies
focus their business on location based products for
niche markets (such as health, logistics or
manufacturing). Thus LBS seem to reappear in the
scene and a significant market growth is again
estimated: for example, ABI Research expects the
US market to rise from 981 million USD in 2005 to
8 billion USD in 2010 and Berg Insight forecasts
that mobile LBS revenues will reach 622 million
euros in Europe by 2010, when 60% of WCDMA
handsets will be GPS/Galileo enabled (Berg Insight,
Due to legislative and cultural differences,
location based services have been unequally
deployed worldwide. In the US, December 31
was the deadline to fulfil the Federal
Communications Commission E911 directive (E-
911 Requirements, 1995), that established the
mandate for locating the emergency calls made
through a mobile network; during the last years, this
circumstance has compelled the operators to update
their infrastructures and mobile devices in order to
reach the accuracy requirements, that range from 50
to 300 meters depending on the technology
(terminal-based or network-based approaches).
A similar demand for location accuracy has not
been legislated in Europe; all the operators are
recommended to provide a best-effort service when
locating an emergency call (CGalies, 2002).
Operators have not been then pressed for introducing
accurate location systems, so market has been the
only tractor of most part of the deployed
applications (mostly based on cell identification
positioning). The greatest acceptance of location
based services is in the Asia-Pacific area, which
gathers 55% of LBS subscribers all over the world:
in Japan, KDDI has 6 millions of users for 130
location based services and in South Korea, SK
Telecom is estimated to have 12-15 millions of
assisted GPS (A-GPS) phones and 150 services
(RedHerring, 2005).
The deployment of LBS to the market follows a
relative complex business model where, besides the
mobile operators, third-parties occupy a significant
place in the value chain as application designers or
even service providers; in fact, the fraction of the
potential LBS European market attributable to telcos
in terms of value chain covering is only reported to
be 5% (Eurescom, 2004)
M. Bernardos A., Tarrío P. and R. Casar J. (2007).
In Proceedings of the Second International Conference on e-Business, pages 114-121
DOI: 10.5220/0002112401140121
Table 1: Value chain for A-GPS based services.
Stakeholder Role
Location data
GPS data providers.
E.g. US DoD, future EU Galileo.
Providers of mobile operator point to
point solutions that include
infrastructure (SMLC, GMLC),
positioning techniques
implementation and location
management software.
E.g. Openwave, Trueposition, NEC
or Ericsson.
User device
Providers of software to develop
applications without coding for the
system interface.
E.g. Qualcomm BREW for CDMA.
Suppliers of
platforms for
Platforms with simulators, white
brand basic location services and
interfaces, service creation
environments or particular APIs.
E.g. Autodesk.
A-GPS chips
Eg. Texas Instruments, SiRF, Global
Locate, etc.
Manufacturers that integrates A-GPS
chips in their user devices.
Eg. Kyocera, NEC, Samsung, etc.
Content owners and makers.
Eg. Google Maps, Yellow Pages.
GIS and maps
Eg. NavTeq, TeleAtlas, etc.
Markets observers that design
applications and acts as integrators to
deliver a final application.
Eg. Bimactive, Google Maps.
While acting as carriers and interface
with customer, they can negotiate the
terms of profit share with
applications providers while
maintaining customer control.
As an example, Table 1 gathers the main
stakeholders of an A-GPS (assisted GPS) based
location service provided by the mobile operator.
Furthermore, technologies such as Bluetooth,
Wi-Fi, UWB or RFID have specific location
capabilities and value chains that may include, e.g.
specific hardware manufacturers (such as RFID
chips providers) or Wi-Fi location engine makers
(that finally commercialize complete hardware and
software solutions).
This increasing complexity and variety in
technologies, services and business rules makes
challenging the design of a taxonomy to help to
consistently foresight how these services will evolve
in a middle term horizon (see, e.g. Arbanowski et
al., 2004; and Karlson, 2003) towards the advanced
deployment of user-centric ubiservices.
In this context, this paper intends to contribute to
the understanding of the essential characteristics of
the actual LBS services. A preliminary framework is
described; it will ultimately allow us to classify and
contextualize existing and new applications.
In the following section (Section 2), we review
the current situation of commercial or pre-
commercial location based services, classifying
them into a number of categories. Section 3 states
the factors which can be considered in a model to
describe the main features of LBS, essentially those
considered in terms of user experience,
technological aspects and business structure. In
Section 4, the model is used to evaluate a number of
current commercial LBS. Section 5 concludes with
some open issues to be considered.
In the last years, a number of authors have proposed
different schemes to categorize mobile location
services. Among them, Giaglis et al. (2003) identify
six types of mobile location services (emergency,
navigation, information, advertising, tracking and
billing). D’Roza and Bilchev (2003) recognize five
areas of application (communication, fleet
management, routing, safety and security and
entertainment) and Steinfield (2004) also includes
mobile office applications or proximity information
Our classification is made from the analysis of
the commercial current situation of mobile location
services; to a certain extent it re-elaborates previous
taxonomies in order to add particular services that
are being commercialized or in a pre-commercial
state. We mainly aim at identifying “horizontal
functionalities” (not areas), services’ functional
features that can be customized and combined to
profile complex applications or suitable proposals
for niche or particular market segments.
The obtained categories are explained below
together with some inspiring examples in the state-
of-the-art of commercial LBS:
- Navigation. The goal of these services is
helping in the process of route discovery and
providing guidance in the way to a given destination.
Maybe being the most popular application, thanks to
car navigators, navigation service is also offered by
the mobile operators, mostly to those users with a
GPS enabled phone. For example, KDDI pioneered
the mobile phone service launching in 2003 EZ Navi
Walk, a full-scale navigation service for pedestrians.
- Tracking. Tracking applications are based on
tracing a person, pet, vehicle or specific tagged
asset. Two examples of tracking applications,
supported on different technologies, are a system for
sport practice monitoring that tracks the sportsman
to obtain data of performance (commercialized by
Bimactive for GPS enabled phones) or the WiFi
solution to track miners when working (from
- Group management. In this category, where
resource finding and tracking functionalities are
evidently needed, we include all those applications
conceived to locate a collection of distributed nodes
(workforce, assets, vehicles…) in order to manage
them efficiently. Although most commercial
applications provided or not by mobile operators,
use GPS to locate, indoor services are coming to be
implemented with technologies such as UWB or
WiFi. An example of the latter group of solutions is
an application to track patients, staff and critical
assets in hospitals, provided by Aeroscout.
- Finder. The purpose of the finder service is to
locate oneself, another person, place or tagged
object. There are many solutions provided through
cellular networks (e.g. TeensArriveAlive, an A-GPS
based finder provided by Nextel) or using WiFi
(school children in Yokohama City may use a Wi-Fi
based system to be located in their way home, by
NTTDoCoMo). People finders are to be one of the
most successfully accepted LBS applications.
- Location based content delivery. We refer in
this point to those services that provide some kind of
content, based on the user's location:
a) Directory search. When a service or
information is looked up following a real time
user request, we consider that a search in
directory is being done. For example, most
mobile operators offer the possibility of
consulting nearby facilities (restaurants, gas
stations, pharmacies, etc.). Other companies,
such as Geovector or iST iPOINTER use GPS
and digital compass information to make the user
receiving information only by pointing towards
the object or the place they want to have
b) Push based delivery. Opposite to directory
search, location aware contents can also be
delivered through raw push, programmed
delivery or subscription formulas, depending on
the application and/or business model. The best
known application is probably location based
advertising, which delivers ads or coupons to
potential customers positioned in a particular
place, under request or pushing them into the
phone (e.g., Peekablue, Kameleon or FutureLink
are bluetooth systems focused on location based
m-marketing). Anyway, many other applications
(such as location aware self-made reminders) are
- Geotagged content making. New business
models can be focused on profiting from managing
location aware content authored by the users
themselves. For example, updating a mobile blog
(mblog) is a widely offered service (e.g. Orange
Blog or i-shot service by NTT DoCoMo) that can be
improved with geotagged content (e.g. Geotagged
photos can be sent to popular websites such as
Flickr, to share and publish them), and niche
applications (e.g., a mobile tourist guide in a wiki
format enhanced through geotagged content sent by
its users) are also feasible.
- Social networking. LBS are beginning to
support the mobile concept of community that so
successfully has spread in Internet. Wireless social
networking services can schedule appointments
based on proximity, interest matching and
availability. They allow content sharing, finding
friends and communication. Some recent examples
of incipient initiatives in mobile social software are
Pantopic or Mobiluck (both using Bluetooth) and
others such as Dodgeball (bought by Google in
2005) or AreYouHere (on cellular). In a certain way,
multi-user games can be also considered as part of
this group of applications (i.e. Mogi-Mogi from
Newt Games is a successful location and presence
pervasive game).
- Location enhanced communications. Extended
ways of interacting among individuals are possible
by adding location aware capabilities to common
services as instant messaging or push-to-talk. For
instance, Clarity Communications commercializes
Where2Talk, a location-enabled Push-To-Talk
(LEPTT) application.
- Location based billing. Different charging
systems may be created depending on user's
location. E.g. O2 has been offering a 'home zone'
plan, which allows calling with fixed-line tariffs
when in an area of about 500 meters around home.
- Proximity applications activation. In this group
we consider applications enabled by Near Field
Communications or RFID technologies (that can be
embedded in mobile devices) or 2D matrix codes
(e.g. QR or Datamatrix codes); both approaches
make possible proximity services activation. Some
applications based on this concept are being
currently commercialized in Japan. For example
NTTDoCoMo provides, by waving a phone with a
ICE-B 2007 - International Conference on e-Business
NFC Sony card near a tag reader, commercial
information and discount coupons (ToruCa service)
or purchasing from a machine (M2M vending
In most cases, the horizontal services above are
adapted and combined to offer ad-hoc solutions in
niche areas such as logistics (fleet management or
asset tracking), business (workforce communications
and adapted social networks), transportation (vehicle
navigation, traffic information and law
enforcement), tourism and travelling (ubiguides,
tourist social networks), leisure (pervasive games,
nearby entertainments, friend finder, dating
networks), emergencies and disaster management
(emergency positioning, roadside emergency, fire
fighting applications), U-commerce (M2M and U-
advertising) or security (children and senior finders
and trackers, animal finder, theft vehicles finder).
Among all these services, there are divergences
about which of them will be real market demand
pullers, but some analysts bet for navigation (Berg
Insight, 2006), family trackers (inCode Wireless,
2005) and location aware billing. Apart from those,
multimedia downloads (music, audio and video)
with location related reproduction rights,
information in mass entertainment shows (live
statistics or sport replays) or pervasive games seem
to be other valuable proposals for final users
(McMahon, 2006).
As noticed in the previous section, conceptualizing a
complete taxonomy to support the analysis of mobile
location services’ features is a difficult task due to
the variety and complexity of the applications. In
order to elucidate which the relevant features to
describe mobile location services are, technical
requirements have been usually (and correctly)
considered. For example, Giaglis et al. (2003)
describe LBS mainly in view of technological
factors (accuracy needs, application environment
and facilitating technologies) although also point at
taking into account pricing schemes. Stein et al.
(2005) applies Giaglis’ taxonomy to ubiquitous
commerce for tourism, choosing a number of
tourism applications and classifying them regarding
their access technology, location technology,
information access and whether there is an online
component. On the other hand, Tsalgatidou et al.
(2003) remark the particular requirements of mobile
location services in terms of functionality, usability,
reliability, privacy, location infrastructure and
Capitalizing on the categorization of services
made in Section 2, we propose to identify
similarities and differential features among mobile
location services not only from a necessary
technological perspective, but in a framework to
understand LBS business and to evaluate new
Figure 1: Towards a model to evaluate location based
Then, we propose an analysis model for mobile
location services based on three pillars a) user
experience, b) technological viability and c) business
sustainability, to describe the user perception of
value and to consider, at the same time,
technological needs fulfilment and business aspects
(Figure 1).
The user experience
There are different factors that may be
considered to describe how the user feels when
using a service:
- The perceived service value proposal. The
killer LBS has not been found yet (McMahon,
2006); in general services such as navigation or
children finders are being accepted, how to increase
their use is the next challenge. In order to describe
the value proposal, we will use the classification in
Section 2, as it is possible to frame most current
location services regarding their main features; as
stated before, many services are a combination of
“primary” features that can be particularized for
particular areas.
- The type of delivered content. Text, voice,
multimedia (maps, graphs, photographs, videos, etc.)
compose mobile location delivered content. The
need for contents usually describes the service
complexity, they have to be combined and adapted
for the capabilities of small and very diverse mobile
devices (with different hardware and software
performance) and to the access network possible
- The service interaction scheme. A friend-finder
service can need six clicks and one minute for the
client to get the response. To provide an enhanced
user experience, minimizing and making easier the
user interaction and fulfilling user’s expectations in
terms of performance is a must. That is why aspects
such as 1) the easiness of download, installation or
setting-up processes, 2) the implementation of direct
service triggering methods or 3) the usability and
adequacy of interaction mechanisms are relevant.
For example, when considering the service trigger,
LBS can be provided on demand (pull) or
spontaneously (push). On the other hand, as in other
mobile services, multimodality -the combination of
different physical interaction methods (voice,
keyboard, movement or pointing…) in the same
device and for the same application- are needed. The
system reaction to the user’s demand can be
configured e.g. using voice, SMS/MMS, USSD
codes or direct data downloads.
- Privacy requirements. Privacy issues (Gratton,
2002) regarding LBS are related to the collection,
storing and exchange of historical location data
gathered in databases, to the misuse of real time
positioning data (e.g. sending unsolicited
information may convert mobile devices in spam
receivers) or to the user losing control of the location
process (EU regulations offer some protection
through Directives 95/46/EC and 2002/58/EC, but
technical and legal aspects have slightly advanced)
(Ackerman, 2003). Obviously, privacy is a crucial
issue for LBS (it continues being a major roadblock
towards their adoption): for example operators try to
mitigate adverse feelings through mechanisms of
usable privacy-level options and appealing to their
experience in gathering relevant data and managing
sensitive information. Anyway, privacy
requirements vary from service to service; in fact,
being less controversial, operators’ application
portfolio is frequently focused on business services.
Privacy enhancing technologies (such as policy
management and pseudonym use, camouflage
methods -temporal or spatial cloaking or mix zones)
are a complement for well built legal and social
frameworks (Fritsch, 2005).
Apart from the stated issues, many other aspects
can also describe the user opinion towards a service.
Among them, balance between offered value and
cost is critical in most of cases.
Technological viability
In brief, technical issues are about satisfying service
coverage, accuracy or latency requirements with
appropriate location techniques while dealing with
network restrictions. Hightower and Borriello (2001)
give a wide explanation of the performance
characteristics of different location systems. To face
the services’ description we will evaluate:
- The technological enablers. GPS and GPRS,
Wi-Fi, Bluetooth and UMTS, NFC... There are
multiple technologies that can be combined to
provide mobile location services, to enhance
location process and to balance the network load. In
a future, efficient network heterogeneity
management will use data fusion (profiting from
data from different sensors) to obtain high accuracy
and seamless location capabilities.
- The location technique. For a review on
location techniques consult for example Raja et al.
(2005), Laitinen et al. (2001) or Sun et al. (2005). In
summary, location techniques are based on cell
identification, angle of arrival (AOA), triangulation
based on received signal strength or on time
methods (time of arrival and differences of times of
arrival) and GPS (usually network or terminal
assisted). In cellular networks, A-GPS and Cell-ID
are the preferred techniques. Positioning with Wi-Fi
is normally accomplished using the received signal
strength. For Near Field Communications
technologies, proximity (cm) detection triggers the
- The required accuracy. Evidently, not all the
applications have the same accuracy requirements.
Accuracy is an attribute directly linked to the
technological enablers and location techniques. For
example, Cell-ID, the simplest technique available
in cellular networks, provides from a few hundred
meters of accuracy to several kilometres for GSM.
Its enhanced version (with timing advance) achieves
500 m., AOA gets 100-200 m., while the accuracy
with E-OTD ranges between 50 and 200 m. A-GPS
can achieve 10-50 m. outdoors, but complements for
indoor coverage are usually needed. On the other
hand, positioning systems based in Wi-Fi have an
accuracy of some meters.
Business sustainability
The considered business aspects are related to the
value chain composition and the revenue models.
As explained in the introduction (Table 1), the
stakeholders in the value chain are highly dependent
on technological issues and on the complexity of the
necessary contents needed to implement the service.
Usually, the common LBS complex value chains
ends in complex revenue models. For example, some
children trackers are currently commercialized
through a subscription scheme that includes the
ICE-B 2007 - International Conference on e-Business
access to the service and a fixed number of location
requests. Then, each additional request surpassing
the included number is also charged. On the other
hand, some commercial mobile guides have a
revenue scheme composed by a fixed subscription
cost to the service (usually paid once) combined
with a two or three day flat rate of use. This flat rate
does not always include data traffic.
In consequence, it is possible to identify very
different charging options: subscription, time of
connection (GSM networks), downloaded data
(2,5G-3G) costs, premium SMS or MMS pay,
application hosting, developers' membership fees
and advertising. These alternatives may be combined
depending on the service and the value chain
In summary, Table 2 at the end of the paper partially
illustrates the use of the model for ten commercially
available services mentioned in Section 2. From its
analysis, we can state the diversity both for
technological and business approaches for
commercial mobile location services.
Mobile operators come to be key players:
cellular technologies together with GPS enable
many of the currently available LBS. Due to the
high penetration of cellular devices, many
application providers usually develop and offer their
services by partnering and sharing revenues with
mobile operators. Anyway, independent service
providers are common in navigation systems and in
new Wi-Fi or Bluetooth based LBS.
From the user point of view, pull or authorized
push content provision is the most adopted scheme
possibly due to privacy concerns.
Regarding technological aspects, we can say that
if the statement that a more accurate positioning will
enable the deployment of more useful applications is
probably true, there is a bundle of applications not
requiring accuracy in the range of the centimetre. Of
course, extended precise seamless systems able to
provide high precision indoors and outdoors
(through triangulation mechanisms but also through
proximity activation) will enable new services and
enhance existing ones.
On the other hand, value chain analysis shows
the great amount of partners involved in the
development and deployment of location based
services: content and GIS makers, hardware
providers, operators, software integrators, etc.
On the other hand, fragmented distribution
channels can be one of the reasons for non-
homogeneous pricing schemes for the final user and
sophisticated revenue models among the different
stakeholders composing the value chain.
At the beginning of the decade, some factors made
hard the take-off of LBS: immature positioning
technologies, expensive handsets, short lasting
batteries, lack of consumer interest and awareness
beyond voice and basic data applications, no catchy
services or no standards for developers. After being
in the market for some years now, location based
services seem to have achieved commercial success
in certain niche applications, but they have not been
widely accepted yet. Nowadays, location is the
engine of a well delimited group of services in
which, for the time being, navigation and tracking
applications are kings for both customers and
business market shares. Nevertheless, a good heap
of innovative services are appearing and gaining in
interest thanks to the massive deployment of
wireless networks based on 802.11 and the
consolidation of other technologies such as RFID.
Moreover, the transfer and adaptation of services
that have succeeded in the Internet (social networks,
blogs, etc.) are beginning to be adapted to mobile
In this paper we have proposed a preliminary
feature-based model to cope with current mobile
location services diversity and to help to prospect
their future evolution. The model is basically
articulated to evaluate the user experience while
considering technological and business issues, and
has been partially applied to the analysis of ten
currently available location based services.
New positioning technologies with low power
consumption, network interoperability
standardization, advances in ad-hoc networks that
will allow fully decentralized wireless
communications and combined location methods
(data fusion) are being studied to guarantee
seamless positioning indoors and outdoors. On the
other hand, the evolution toward solid business
models continues; the success of LBS might
probably be more attached to profitable business
models than to any other factor.
Location based services are only paving the way
towards the deployment of context-aware user-
centric ubiservices on heterogeneous all-IP
networks. These services, based on personalization,
ambient awareness and adaptability will be handle
personal descriptors (identity and profile), status
parameters (physiological or ambient information –
temperature, air quality, light, noise level, etc.),
temporal data (date, season, schedule, agenda, etc.),
positioning information or relational (social) records
altogether. So they will surely manage location data
as a commodity context descriptor, but will go
further beyond it.
This work has been financed by the Spanish Ministry of
Education and Science under grant TSI2005-07344
(COLOCAME) and by the Government of Madrid under
grant S-0505/TIC-0255 (MADRINET).
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Table 2: Characterizing some currently deployed location based services. (Brands in brackets represent providers of a particular application exemplifying the niche
Example serv
Partners in the value chain
Pricing scheme
- GPS positioning data provider.
- GPS handsets provider.
- GIS provider (Tele Atlas).
- Navigation applications provider (Wayfinder).
- Mobile operator.
5 – 50m
What: Maps and voice routes.
How: Data download.
On demand (pull
App. Provider/ Op.
:Monthly fee that
includes application
download and route
calculation GPRS
eg. BiMActive
- GPS positioning data provider.
- GPS handsets provider (Samsung, LG, Motorola).
- GIS provider.
- Application provider (Bones in Motion).
- Mobile operator (Sprint Nextel, Verizon Wireless).
5-50 m
What: Maps, graphs.
How: On the mobile, through data
transfer. On the web, after uploading the
received content.
On demand
App. provider:
Monthly fee.
Operator: Unlimited
data plan (flat rate
Group management
in hospital
- Infrastructure provider (Cisco).
- Wi-Fi device provider.
- Location engine provider (Aeroscout).
- Integrator (GTSI).
3-4 m
What: Custom maps.
How: data on the mobile and on the web.
SMS alerts.
Location Engine
Cost of infrastructure
and system
eg. Teen Arrive Alive
- GPS positioning data provider.
- Handset compatible provider (Motorola).
- GIS provider.
- Application provider (Teen Arrive Alive).
- Mobile operator (Nextel).
5-50 m
200 m-
several km
What: Location information (on maps)
How: Mobile data query, voice consult
and Internet.
Possibility of
disabling the
App. Prov.:One time
activation fee plus a
monthly fee.
Operator: unlimited
data plan (flat rate
Directory search
eg. I-Area
- Content providers.
- Handset providers.
- Platform provider (eg. Ericsson).
- Mobile operator.
E Cell-ID
200 m –
several km
What: Maps,
facilities information.
How: On the phone, SMS, MMS, voice,
On demand
Operator: Pay per
location based
eg Kamaleon
- Content provider.
- Hardware providers (Bluetooth points and handsets).
- Application provider (Kameleon).
- Mobile operator.
Bluetooth and
AP coverage
10 m.
What: Multimedia, text.
How: Data download.
On demand /
authorized push
App. Provider:
downloading cost.
Transferred data cost.
Social networking
eg. Mobiluck
- Handset compatible provider (Nokia).
- Application provider (Mobiluck).
meters What-how: SMS and phone calls. On demand Free
Geotagged content makin
eg. Geominder
- Handset compatible providers (Symbian Series 60
- Application provider (Ludimate Geominder).
- Mobile operator.
Cell-ID Cell size
What: Self-made alerts.
How: voice and text.
App. Provider:
Zone based billing
Home zone
eg.Home Zone
- Mobile operator (O2).
Cell-ID 500m NA Transparent
Operator: Fixed-line
tariffs for mobile
calls at home
M2M apps.
eg. NFC boarding card
- Content provider (Japan domestic air travel groups).
- Provider of handsets with specific Sony's chip (various
brands for NTT DoCoMo).
- Infrastructure provider (includes tag reader).
- Mobile operator (NTT DoCoMo).
NFC, UMTS Contact cm.
What: Multimedia information and
coupons How: MMS and data download.
On demand
Operator: Data
traffic charges.