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Location Based Services Find Their Niche

On Thursday, the Hong Kong mobile phone company Sunday Communications Ltd. started “Loved-Ones Radar,” allowing parents to track, within 150 meters (500 feet), the location of their cellular-toting child.

Last week in Britain, the makers of London’s black taxis began an automated service that locates a cell phone caller, identifies the taxi nearest that person and then puts the caller in direct voice contact with the driver. For this you pay £1.60 ($2.60) on top of the metered fare.

And since last month, Hong Kong residents have been able to dial a number on their mobile phones to get free SARS-related data. The service determines the caller’s location and sends a text message containing addresses of buildings within 1,000 meters that have reported severe acute respiratory syndrome infections.

Three years ago, the hype about such so-called location-based services, or LBS, was overwhelming, with operators openly threatening to beep your phone with coupon offers whenever you passed a Starbucks. Today, the arrival of LBS is relatively unheralded, even as the services are filtering into the mainstream of mobile applications.

Depending on your location, your handset and the services your mobile phone company uses, you can use a cell phone to get buzzed when a friend is nearby, play hide-and-seek-like games with friends or strangers, find apartments to rent near where you are standing or get medical help, all without opening your mouth. Services that locate the nearest towing company, automated teller machine or florist have also been popular, analysts say.

“The applications that make the cut,” said Jed Kolko, lead analyst for consumer devices at Forrester Research Inc. in California, “are simple, quick hits of information that the customer needs here and now and cannot do without a mobile phone.”

Unlike cell phone services like video calling that require new, high-speed data networks still under development, most LBS offerings work on existing networks, allowing operators to provide the services without major investment. For the consumer, the cost can vary widely from about 19 euro cents (21 U.S. cents) to E2 a message.

The simplest technology locates where your phone is – and, presumably, you – by identifying which cellular antenna is picking up and transmitting your phone’s signal. But that antenna can be as much as one kilometer (six-tenths of a mile) away.

Better software in the network essentially triangulates among antennas to determine the caller’s position to within 300 to 500 meters. Still more accurate technology uses the satellite-based Global Positioning System to locate a transmitter in the phone. But these phones cost more.

With technology not a barrier, the question in the telecom industry, then, was what services to offer. It turned out that it wasn’t going to be coupons after all.

“We launched ‘push-based’ coupon-messaging in Hong Kong shopping malls in 1997,” said Bruce Hicks, group managing director of Sunday Communications. “Its failure proved that people don’t adjust their social habits just because a technology is available. To succeed, it must be simple and complement the way that they already do things.”

“Changing social behavior takes forever,” said Swen Halling, chief executive of It’s Alive Mobile Games AB, a Stockholm-based LBS developer that makes the location-based games Supafly and BotFighters, a phone-based role-playing offering.

Many operators provide services like TeliaSonera Corp.’s Friend Finder, which allows a subscriber of the Nordic telecom to set up lists of friends and get an alert when one is nearby.

While this kind of buddy-finder service was one of the first to appear in many countries, in France the earlier priority, according to Frederic Jarjat, LBS product manager for France Telecom SA, was LBS-enabled chat – or, more specifically, “flirt,” a service whereby subscribers can exchange text messages with total strangers who are in their vicinity.

TeliaSonera also has a service with a novel twist: You’re walking down a pleasant street in Uppsala and think that it looks like a nice place to live. You send a text message on your phone to the number 4412, and you get a return message listing the nearest three available apartments – and the phone numbers to call about them.

LBS technology also leads naturally to security-based products, such as “panic buttons” for older or ill users, or a Find My Kid service like Sunday’s, which several operators are already testing.

But, in general, LBS offerings rank low on the list of what people do with mobile phones.

Operators do not publicize usage figures for any given service, but industry analysts and applications developers say LBS options make up less than 1 percent of mobile usage.

Michelle de Lussanet, telecommunications analyst at Forrester in Amsterdam, said that in terms of average revenue per user, data services as a whole make up 10 percent to 14 percent of cell phone carriers’ business. Almost 98 percent of that is person-to-person text messages.

“The remainder is mainly ring tones and operator logos,” she said. “This doesn’t leave a lot of room for other services.”

Zingo, the taxi locater that is a unit of Manganese Bronze Holdings PLC, said that of the 12,000 licensed black taxis that cruise London’s streets on any given day, 500 are outfitted with its equipment. More than 6,300 people have tried it since the beginning of the company’s trial this year.

Sunday said that in the first week of its SARS service, 16,000 of its 650,000 Hong Kong subscribers used it.

Operators and analysts say a large-scale introduction of LBS will take years; Forrester predicts that data applications like LBS will not take off until 2006 or so, when today’s teenagers become the next generation of high-tech adults.

And some services also could suffer if they are too accurate. The director of new technologies at Sunday, Henry Wong, said, “Our focus group of Hong Kong youths showed us that teens overwhelmingly don’t want the kid-finder because it doesn’t let them lie about where they are.”