Could location drive the future of the humble SIM card? – published 2008

 In location

For some time now, the Subscriber Identity Module – more commonly known as the SIM – has been pushed away from the limelight to make way for the new ‘shining stars’ such as instant messaging, mobile marketing and social networking. It is now time for the SIM to take a new lease of life and gain back its share of attention in the mobile world. After all, it is arguably the backbone on which all mobiles run.

As a tool that securely manages a subscriber’s identity, the SIM is the only remaining element of the mobile an operator actually owns. The way in which an operator chooses to use the SIM could offer huge potential to drive revenues from the next generation of mobile applications. For a service like social networking, by adding the element of a person’s location, the SIM is offering a new opportunity to provide actual relevance to a user’s browsing.

Location based technology is nothing new and it has certainly been through some hurdles over the past years. It is something that has evolved quickly from a useful add on in a person’s life, into an essential element that is set to transform mobile social networking services and applications over the coming months.

Looking back at the types of location technology consumers are aware of, not only have we heard of GPS (Global Positioning Systems) but nearly all of us have experienced it – from turn by navigation units in cars, to complex GPS systems onboard planes that show us the route we’re travelling on a map. Whilst GPS is by far the most extensively used, its principal drawback – very poor indoor reception – is its biggest handicap for the telecoms industry.

Cell-ID is a technology that works indoors and uses the mobile phone network to locate the device, and is something that operators have considered in the past. It relies on the closest base station for its position by approximating where the phone is and consequently gives a range of possibilities related to the coverage of the base station. The results of Cell-ID prove to be somewhat varied, providing a precise location that can range from hundreds of metres to many kilometres in a built up area. As the overall accuracy clearly has some shortcomings, customers have been disappointed and carriers have not been able to make the service profitable.

What could be considered as a way of improving the service could be using a technology that detects the location of a device via numerous base stations, so that it becomes far more accurate. Such technologies are currently helping to drive more accurate locations, location based search and advertising. 

What is interesting is that some advertising companies have taken the initiative of launching Operator Independent Location (OIL) and looking to get their message out independently, bypassing the operator altogether. The reason behind this is so that they can attempt to get their message to all eyeballs, and not just those of one particular operator’s users.

In terms of mobile search, there is an untapped opportunity for search engines like Google or Yahoo! to use real time location technology to accurately locate the user to a few hundred metres. This could then be used to the power of an operator or advertiser to send carefully targeted messages or to suggest a relevant local search items and even paid for content.

Imagine the potential for both search engines and their advertisers if the options for keywords also included precise locations, and not just regions or mobile operators. How much more would advertisers be prepared to bid if keywords were also linked to a user’s current location?

Thanks to a host of companies that developed portable navigation devices for travel mobile advertising and homezone offerings, location based technology has now gone mainstream and consumers are becoming increasingly aware of the benefits location technology can offer.

This presents the mobile industry with a lucrative yet challenging opportunity, whereby the rejuvenated concept of LBS (Location Based Services) uses a customer’s location to offer services that subscribers really want and they are more willing to accept. In providing a contextual element to them, the SIM looks to be the perfect catalyst for this as it begins to evolve and show a new lease of life.

It was not too long ago that the SIM was credit card sized – designed to fit the rather large ‘hand phone’. At the time, a typical SIM was around 16 KB in capacity size. Now, whilst the chip has grown smaller in size, it has increased in capacity and has the ability to hold numerous messages, images and even videos. Some operators already have in place a 1GB SIM that is able to hold full feature length films and even has the potential to run an entire portal off the SIM. It is clear that the SIM has the ability to expand and develop larger capacities; but can it add real value to an operator’s service?

It is hoped that larger capacity SIMs could help to drive customer retention and include applications that attract new customers. So far, the applications include mobile banking and phone book back up, which is predominantly intent on building loyalty between an operator and a subscriber.

At a time when most operators face high levels of churn, the importance of building a strong relationship with subscribers is paramount. Some operators have introduced software similar to the O2 Bluebook and Vodafone’s Zyb which copy information from the SIM, such as contacts, messages and photos and stores them safely online. It is unlikely that a subscriber would want to part with a service that has backed up years of contacts, messages and photos. Loyalty and retention is crucial to any successful business model.

It is clear that social networking is currently creating an explosion of interest. Within the US alone, between 2007 and 2008 there has been a 77% increase in the total of monthly visits to Facebook. As with numerous aspects of the wireline internet, this is spreading fast onto the mobile so that users can keep up to date with their friends whilst on the move. This is something that operators are clearly seeking to leverage. In fact, one major operator in the UK is offering free SIM cards that enable its users to have unlimited access to their Facebook, Bebo and MySpace accounts for free – something that is bound to attract today’s consumers on to the network.

The increasing number of phone applications and services that can be found online and social networking sites like MySpace and Bebo are attracting millions of users. With a flat rate tariff, subscribers are increasingly using their mobiles to go beyond the walled garden to explore the web on their handsets. Yet, most users access their favourite social networking sites over the ‘traditional’ internet – the version available on the mobile is much more scaled down with poor user experience. So, can operators get subscribers to use their mobiles instead of a standard PC to access a site like MySpace by offering an enhanced service?

Attracting users to the mobile web could be seen as highly desirable for social networking sites and search engines. This is down to the fact that there is potentially a huge amount of traffic available from people on the move that is unlikely to be obtainable on the fixed internet. For example if I was travelling, in a cafe or even on holiday, it is simple for me to tap in to my mobile internet and update my status – something unachievable with my internet at home. So the mobile web proves to be an area of interest to such sites and operators, but it is arguable that they would need to position themselves as enhanced service in order to really take off to their full potential.   

The drawback that we are increasingly beginning to see is with the extension of the social networks onto the mobile phone, just how the internet giants that run such sites will add value into the mix, to actually encourage users to use this as an alternative to the fixed line web. It is increasingly becoming clear that to make it worthwhile to access such sites on the move operators should look to offer something above and beyond the fixed internet and make it relevant to the individual.

It is the SIM that holds the answer. To enhance the way a person uses social networking on their mobile, location technology delivered on the SIM could play a pivotal role. By introducing the long held desire of real-time subscriber location, operators could energise social networking sites and provide users with an enhanced contextualised service that most PCs could not offer. On a handset, this could include status updates about a person’s location or presence, give an alert if friends were in close proximity to each other or alternatively provide location specific information when signing in to the account.

The humble SIM that sits on each mobile phone has the capability to offer next generation applications to users and deliver a remarkably different user experience. What is even more remarkable is that operators can use the existing SIM cards to achieve this and simply upload the application over the air.

Operators should not just look at social networking but also at other services such as traffic and weather services to utilise the data available on the SIM and to secure the additional revenue streams. Providing a higher level of user experience gives the operator the opportunity to differentiate the service from other competitors and will drive customer retention.

For too long has the discussion surrounding SIM been kept to one side – away from the forefront of the mobile industry. Recently stepping aside to make way for the excitement revolving around social networking, mobile search and mobile advertising, it is now time that the SIM is regaining its status and taking a new lease of life.

With SIM able to run Java code and with the mobile web already growing in popularity, operators can and should incorporate the best of the web with the SIM to enhance the applications already available, especially in adding relevance to the existing applications. The humble SIM needs to be looked at more seriously as the tool to unlock revenues and build customer relationships. SIM is arguably the industry’s best kept secret.

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Futurist Keynote Speaker and former IBM Global Managing Partner, Andrew is a popular and sought-after presenter and commentator on issues around digital disruption and emerging technologies. He is a multiple TEDx & International Keynote Speaker. Watch his speaking showreel here, enquire about availability & fees here.