MILPITAS, CA -- (Marketwired) -- 08/22/13 -- Research released today by JDSU (NASDAQ: JDSU) (TSX: JDU) and compiled by STL Partners, a research firm specializing in business model innovation at the intersection of the Telecoms-Media-Technology sectors, highlights an $11 billion opportunity for mobile operators by 2016. The opportunity comes from the monetization of a range of solutions it calls "Location Insight Services" (LIS), the use of aggregated and anonymous "trend" information collected from connected consumers' mobile location data.
To date, the mobile industry has focused heavily on the opportunity presented by real time Location Based Services (LBS) for individual subscribers, a market that is estimated to reach $12.7 billion by 2014, according to Juniper Research. While there has been great success with LBS for apps targeted at consumers, many mobile operators have struggled to realize their share of this opportunity, with most of the revenue going to over-the-top (OTT) content players. The STL Partners research shows that, by contrast, the Location Insight Services segment offers operators a new opportunity to monetize their location data. They have a clear advantage over OTT players by aggregating huge volumes of anonymous location data over time and delivering value either directly to businesses, or via partners such as retail planners and advertising agencies.
Today, subscribers' location data is available to operators, but only a few have begun to tackle the technical challenges of transforming the data to a usable form or solving the business challenges of developing a viable business model to make the best use of it.
The research highlights how organizations in industries such as retail, transport, and advertising could benefit hugely from unique LIS that only mobile operators can provide, once anonymous location data has been collated and analysed. Some of the leading Tier 1 operators have recognized the opportunity and publicly stated their intention of providing this insight and are already starting to capture a significant share of this market.
The research from STL Partners provides some illustrative use cases that are made possible through the utilization of LIS and applies their respective estimated market values. While commonly available cell level location enables some of the use cases, building level location intelligence from an enterprise geolocation system significantly increases the value. Examples include:
"The findings of this report mark a step change in the perceived value of location data and the way in which operators use it," said Shirin Dehghan, former Arieso CEO, and now head of the location intelligence business unit since its acquisition by JDSU. "For some time, OTT players have led the way in using real-time location data to provide location-centric services to consumers, such as special offers or vouchers. LIS puts the power back in operators' hands allowing them to monetize the value of their unique asset, mass location intelligence, creating new revenue streams in times where traditional business models remain under extreme pressure."
JDSU's GEOinsights application, part of the ariesoGEO product range, enables anonymous and aggregated information to be shared by external systems without the need for complex system integration with data warehouses. These solutions enable operators to quickly establish new revenue streams. GEOinsights directly contributes to Location Insight Services enablement, allowing mobile operators to tap into the $11 billion revenue opportunity highlighted in the STL Partners report.
In the report, STL Partners identifies two business model approaches open to operators to realize the value of LIS, either providing the insights as a standalone offer, or working with partners to provide an integrated service offering. The report also outlines an eight step guide from recognizing the organization's unique big data challenge, to ensuring that insight is positioned as a business critical metric to partners and clients.
JDSU (NASDAQ: JDSU) (TSX: JDU) innovates and collaborates with customers to build and operate the highest-performing and highest-value networks in the world. Our diverse technology portfolio also fights counterfeiting and enables high-powered commercial lasers for a range of applications. Learn more about JDSU at www.jdsu.com and follow us on JDSU Perspectives, Twitter, Facebook and YouTube.
About STL Partners
STL Partners has been at the forefront of the field of business model innovation and analysis in telecoms, media and technology (TMT) since 2006. In particular, the Telco 2.0 Initiative has focused on the opportunities for growth through new telecoms business models, and through its New Digital Economics Executive Brainstorms it has been working on cross-TMT business model opportunities in Telco 2.0, Digital Entertainment, M2M and the Internet of Things, Cloud 2.0 and Digital Commerce 2.0.
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