Orange Shows Faith in Webraska

Orange SA (London/Paris: OGE) is to expand its range of location-based services in France and the U.K. and roll them out across a number of other European countries next year, using technology from Webraska Mobile Technologies SA (see press release).

The platform provider, currently placed at number five in our ranking of privately-held wireless companies (see Unstrung's Top 25 Startups), will gain a significant revenue and customer reference boost from this deal. The three-and-a-half-year contract is described as a multimillion-euro deal, but Webraska's VP of global accounts, Ken Hart, told Unstrung it was worth "in the double digit millions" over the length of the contract. "This is significant. It's the first time an operator has put big bucks into location-based services. This isn't just a few applications," says Hart.

Currently, three Orange operations deploy Webraska software -- Orange UK, Orange France, and Orange Communications SA in Switzerland. The new services, due to be commercially available early next year, will be available initially in the U.K., where Orange has 13 million customers, and France, where it has about 18 million.

The services, including BuddyFinder and various "finder applications," will be based on Webraska's Smartzone geospatial platform. "People will be able to find more than just static things, such as pubs and restaurants, but friends and colleagues. And Orange will be able to add location-based features to existing services," says Hart. Language barriers will also be overcome, as customers will be able to read content in a number of different languages, though this feature will not be immediately available.

Webraska, which also counts Telecom Italia Mobile SpA (Milan: TIM), France's SFR, and Germany's E-Plus Mobilfunk GmbH among its customers, also plans, sometime next year, to introduce interoperability capabilities to its platform that will allow services to run across various operator networks.

As for Orange, it has high hopes for these services in both the consumer and enterprise markets. "Location-based services are core to our development in the coming years," says Michel Gaudreau, director of strategy at OrangeWorld, the part of Orange that is "responsible for the global strategy and delivery of multimedia life services." "They will initially be targeted at the mass market but later will be developed for the enterprise, especially for fleet management and mapping services," adds Gaudreau.

Following France and the U.K., the services will be made available in Switzerland (already using Webraska software but not yet the right platform), Belgium, Denmark, Holland, Romania, Slovakia, and Sweden, says Gaudreau.

So are location-based services going to be a great attraction in coming years? We asked telecoms analyst Dario Betti of Ovum Ltd. what he thought. And he isn't that enthused about the whole location-based space.

"The problem with these services is that they're kind of clunky just now -- the user interface needs to improve. And, of course, for the buddy services you need to have your friends using the service, too, to make it worthwhile. I'm not saying these services don't have a future, but at present they're not as exciting as they could be."

And what about that all-important subject -- money. "Location-based services are not great revenue-generators," says Betti. "And although we expect most operators to offer them, we never expect them to make much money as a result. In the short term, particularly, operators are not that interested in things that will involve capital expenditure, and these sorts of services can be expensive to do."

What about Webraska? "We've been talking to a lot of operators recently about their plans for location-based services and, surprisingly, quite a few of them had forgotten about Webraska, so it's interesting to see them do a deal. They haven't been making much headway with operators -- most of its deals have been in telematics, fleet management," adds Betti, agreeing that this news will help to raise its profile again.

The Ovum man added, however, that the European Union is becoming "more inclined to push localization as part of the support for the emergency services, just like in the U.S. with e911, and this will be a boost for the location-enabled sector."

— Ray Le Maistre, European Editor, Unstrung
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