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Case study: Demand for Commercial Cellular Location Based Services in Europe

[THE CLIENT] is a US-based provider of location technology for cellular networks. In the US, the Federal Communications Commission mandated that all cellular networks must have in place high accuracy location technology which can pass the location of cellular phones to the emergency services when a user dials 911. This stimulated demand for various types of location technologies, and [THE CLIENT] is one of a number of suppliers in the market.

However, there is no such mandate to provide high accuracy location data for cellular operators in Europe. Therefore, the adoption of this technology in Europe would need to be based on a commercial business case for cellular operators. Cellular operators can already determine in which cell or cell sector any active cellphone is at any given time, but the geographical accuracy of this information varies according to the size of the cell, so in dense urban areas it may be highly accurate, but in rural areas where cells may cover several square kilometres, it is not possible to pinpoint a cellular phone to within, say 100 metres.

[THE CLIENT] retained BWCS to determine whether consumers and businesses in Europe would pay a premium for high accuracy location, and, if so, how this premium varied by the type of application, and by country.

BWCS began by holding a workshop with [THE CLIENT] to develop a list of the most likely applications which would appeal to businesses and consumers. These ranged from asset tracking services to child tracking, find the nearest..., and pedestrian mapping.

BWCS then conducted a programme of interviews with businesses and consumers across Europe to determine how their willingness to pay for these applications would vary according to the accuracy of the application.

BWCS was then able to provide [THE CLIENT] with data on those applications which needed high accuracy technology to generate premium revenues for cellular operators, and to compare the likely revenues for cellular operators who adopted high accuracy technology compared to those operators who did not.

[THE CLIENT] used this analysis to develop an entry strategy to the European market, and BWCS further assisted [THE CLIENT] on detailed business planning for individual target customers.