Foreign location-based services (LBS) players will need to partner local players close to the ground to achieve commercial success in Asia, according to industry voices, who say understanding of local markets is still the key.
The region has seen a recent influx of LBS applications offered by players such as Foursquare and Gowalla. In January, Foursquare opened up more locations to include the Asia-Pacific region, including cities here such as Singapore and Bangkok.
And the opportunity is growing, according to numbers posted last week by ABI Research, which forecasts global location-based platforms revenue to hit US$560 million this year, and to triple to US$1.8 billion in 2015. The research house said carrier LBS services will help drive this momentum, including players in the Asia-Pacific region.
Foursquare and Gowalla are smartphone applications that rely on the GPS-enabled devices, which are constantly pulling information from the app maker's servers. In contrast, telcos can still locate a user's location via their GSM networks, regardless of whether the device has GPS capability. The operators use GSM localization to determine a phone's location by its proximity to cell towers.
Rohit Dadwal, Asia-Pacific managing director for Mobile Marketing Association, said the success of LBS hinges on the ability to reach more devices.
To drive user adoption, LBS offerings will require collaboration between multiple players in the industry, from operators to sponsors, to application providers and regulators, Dadwal said in an e-mail interview with ZDNet Asia.
It is essential to ensure infrastructure stability as well as the participation of local telcos, in order to move the audience for such services into the mainstream, he said.
Another sticking point for LBS in the region has been privacy concerns, he noted. "Rules around access to, and the protection of the consumer's location information and location history, will be key.
"Ensuring consumers appropriately provide permission to be located at the time, and by the application that they've authorized, will be a crucial issue to resolve before mobile marketers can use location in broad mainstream campaigns," Dadwal said.
John Strand, CEO of Strand Consult, pointed out that such regulatory issues come into play especially as foreign players enter new regions.
In an e-mail interview, Strand said privacy laws differ between countries and even when customers opt into the service, this may not necessarily mean LBS providers have a free pass in terms of how user data is applied.
"LBS services will offer many opportunities but more dilemmas, and how that market evolves will be determined not by engineers, but by jurists who sit and interpret the rules in this area," he said.
For commercial success, partnerships with local advertisers and businesses are crucial, said Dadwal, noting that there is opportunity for locally-based LBS players, as well as partners for foreign players.
These tie-ups are especially important for a market that is as "variegated" as the Asia-Pacific region, he said.
Some foreign smartphone applications rely on user-based submissions for information about a city, but while these can help perfect a service, it may not be a good idea to solely rely on submissions, Dadwal said.
Singapore carriers go mobile
A spokesperson from Singapore carrier SingTel, said the company's mobile advertising services reach 3.2 million customers in the island-state via SMS and MMS.
It offers three mobile services to customers. One is a friend locator, another sends location-aware traffic alerts and the third app displays nearby amenities on a map on users' smartphones.
In a response to an e-mail from ZDNet Asia, the spokesperson said the telco also matches advertisers to relevant users through customer profile analytics, the spokesperson said.
Competing telco StarHub, offers a locator service that is aimed at parents of young children who want to be notified if they step out of a geo-fenced perimeter, such as their schools or homes. Should they leave the pre-determined boundary, parents are notified via SMS. This service relies on the telco's infrastructure both to pinpoint the child's location and push the information to the parent via SMS.
A StarHub spokesperson said smartphone apps such as Foursquare, require GPS-enabled handsets as well as the app to be installed on the phone, and is currently limited to some smartphone models. He also noted the carrier's mobile advertising service triggers messages to users based on location, and is filtered by demographic data.