The commercial LBS market in Europe has progressed far more slowly and certainly more slowly than most of the market forecasts made at the height of the telecoms boom. Today, only a few LBS applications have been launched within Europe and very few of these are producing downstream revenue. The introduction of UMTS services within Europe continues to be delayed as a result of the current economic slowdown and infrastructure costs.
Whilst the existence of UMTS is not a technical pre-requisite for the delivery of LBS, it does enable richer applications through the use of more intelligent devices and increased bandwidth (eg for use with maps).
The business model for the provision of LBS is changing from a closed model, where only the network operator provides services to its subscribers, to an open model, where the operator acts as an open link between the subscriber and third-party content providers. This expands the range of services offered while meeting customer demand. It also enables the operator to release risk onto the content provider and adapt itself to the constant evolution of handset and network technology.