How can Operators Tap into the Power of Location Based Services?

Telecoms.com periodically invites expert third-party contributors to submit analysis on a key topic affecting the telco industry. In this article Donald Stuart, CEO of Brainstorm shares his views about privacy and location based services, citing the findings of a recent consumer survey.

In the post-Snowden era it’s hardly surprising to discover that there is a significant degree of sensitivity towards the way in which location based data is collected, processed and used. As Bill Gates succinctly stated, “Historically, privacy was almost implicit, because it was hard to find and gather information. But in the digital world, whether it’s digital cameras or satellites or just what you click on, we need to have more explicit rules – not just for governments but for private companies.”

A recent survey conducted on behalf of Brainstorm and the Mobile Marketing Association amongst 1000 mobile phone users, concluded (72%) that the public believes further legislation is needed to ensure that location based data is used responsibly.  However, the survey also found that a majority of us (74%) are generally happy to share location based data provided that there is transparency and some benefit to be had in so doing.    So what does this really mean for mobile operators and how should we interpret and act on these seemingly contradictory findings in terms of public acceptance of the use of location based services (LBS)?

Well firstly, with regards to the perception that further legislation is required, it’s worth stating that global legislation in the telecoms world is already extremely rigorous in terms of the need to gain opt-in permission from the individual user before using LBS data in any way. The question here is probably more one of conferring ‘control’ to consumers and giving them ‘transparency’ and ‘education’ surrounding the use of LBS and how and when data is being collected rather than bringing in more legislation.   Let’s face it, society’s appetite for sharing its data can hardly be in doubt given the meteoric growth of social media.

Checks and Balances

The survey also revealed that 74% of us are willing to allow access to our location data provided certain checks and balances are in place and if there’s a clear benefit in so doing.  Provided the information is used responsibly to provide us with contextual, personalised promotional offers that relate to our location, the majority of us have no problem.  If it also enables us to receive other valuable services such as critical alerts – a storm warning for a particular region, or a strike on our regular journey to work – then we’re perfectly happy to share our location information.   Consequently the lessons that operators should take from our survey is that – if handled responsibly – there is real potential to enhance the user experience, monetise the opportunity and increase subscriber loyalty.

Power to the consumer

The fear that haunts people, rationally or otherwise, is that location data may in some way be subverted and used by government or cybercriminals to their advantage.  The reality is that there is a lot more control at the user’s disposal to decide if and when their location data is shared.   Frequently when downloading apps, users accept the monitoring of GPS location without a second thought and leave it quietly tracking, unhindered, in the background: and, of course, we all have the option to cancel location services on our mobile devices, which is the ultimate sanction open to us all.

There’s also some confusion over who should be held responsible for consumer protection: be it the mobile operator, broadband provider, app vendor or device manufacturer – as users see them all as part of the mobile experience.   Mobile operators could take a more proactive role in educating the public about the delineation between the network, app and device and how to secure data effectively, particularly since this problem is likely to become even more acute as recent mergers and acquisition between companies such as BT and EE blur the boundaries even further.  In fact, operators would do well to take a leaf out of the bank’s books in the way they responded to Phone Scams by helping to educate their customers about protecting themselves better.

The Second Phase of Mobile Adoption

One area where networks operators do hold all the cards is in the area of Passive GSM location tracking.  So whilst other location based services require a degree of user participation: downloading an app, ‘checking in’, ‘around me’ etc, the network layer is the lowest common denominator and passive GSM location tracking only requires that the phone be turned on for it to work.  This means that the operator is supremely well placed to offer certain value-added services linked to location.  To date the biggest use of LBS has been in the marketing of products and services, but now we’re entering the next phase of mobile adoption where operators have a real opportunity to offer valuable services that can enhance our lives by coupling location information with other data.

By amalgamating different data feeds new innovative value-add services will become viable.  For example in combining location based data with behaviour concerning our regular route to work, an individual could receive an early warning signal about an energy grid failure up ahead, or a heightened pollen count for hay-fever sufferers, or transport delays that are likely to affect our commute, allowing us to anticipate a problem and take evasive action.    Timely information, combined with location, interests and other behavioural and demographic data, has the potential to benefit us in an inordinate number of ways.

The Age Gap

So what then should we conclude about privacy and location based data?  It would appear from our survey that our attitudes towards the need for additional legislation vary dramatically according to age.  Over 35s are far more likely than under 35s (76% versus 56%) to disagree with the statement that “companies are taking adequate steps to ensure the responsible use of LBS by third parties without the need for further regulation.”  Presumably this is a generational trend where ‘digital natives’ who have grown up in the social media era are much more comfortable with openly sharing data, including LBS.  Operators should also take heart from the fact that the public is more likely to trust their location based data to the government or to their network operator and least likely to trust an OTT provider like Facebook.

Whilst the political ramifications of the Snowden revelations continue to rumble on, the survey confirms the fact that the majority of consumers embrace the use of location based data, provided they retain control over its usage and/or that they see a clear advantage on a personal or society level.  The challenge now lies in finding compelling and innovative ways to deliver valuable services that will irrefutably prove to the public that location based data can unlock a whole new world of unexpected benefits.

Donald has over 20 years experience and a proven track record of leading and managing companies and has been the CEO of Brainstorm since July 2013. Prior to Brainstorm Donald has held various positions as CEO and non executive director in the telecoms equipment, technology and computer software sectors, including CEO of the IQ Business Group (Pty) Ltd.