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January 12, 2006

TomTom sees MVNO play after Applied Generics buy

Dutch GPS developer TomTom NV plans to deliver traffic information as a data-only MVNO on cellular operators' networks in the wake of the acquisition of UK developer Applied Generics Ltd.

By CBR Staff Writer

Edinburgh, UK-based Applied Generics has three products lines. Its main one is RoDIN24, which carries out what it calls anonymous monitoring of all the active subscribers in a mobile network, which in turn enables the provision of precise road traffic information in real time.

The others are NERO24, a mobile subscriber platform used by operators to locate all active subscribers and VISTA24, which enables operators to add location information to network data for QoS. Applied Generics’ technology underscores traffic information services provided by Vodafone in the UK and Holland.

Taco Titulaer, head of investor relations at Amsterdam-based TomTom, said his company already provides traffic information as additional content on top of its core GPS data, but until now has acquired it from third parties.

We buy it from local organizations, send it via GPRS to a mobile phone, then over Bluetooth to the TomTom navigation device, he said.

This approach has two major disadvantages. Firstly, traffic info acquired from third parties is expensive, limited (in that it usually covers only main highways) and often inaccurate, because it cannot be delivered in real time.

Secondly, it limits the addressable market, since it depends on the end customer having a Bluetooth-enabled phone and a GPRS contract with an operator.

The acquisition of privately-held Applied Generics, the value of which was not disclosed, has the potential to resolve both these issues. In the first place, because it leverages cell ID information and applies algorithm to generate more accurate information and in real time, which now belongs to TomTom instead of a third party.

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In the second, because TomTom plans, further into the future, to embed a GSM/GPRS receiver into its navigation devices and provide the traffic information itself, thus obviating the need for a mobile phone with Bluetooth and a GPRS contract with an operator.

The idea, said Titulaer, is for TomTom to acquire MVNO status in its own right, though only for data services. As for the timeframe in which this will all take place, it’s a business issue rather than a technical one, he argued. We can embed the receiver quickly; we just need the contract.

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