Mobile Carriers Cashing In On Mining Your Data

9 Ways To Bulletproof Your Privacy Policy

Major cellphone carriers in the US and Asia have figured out that users' data is highly desired by marketers, making it worth potentially billions of dollars each year. They are cashing in -- unbeknownst to most of those users, according to a report in Advertising Age.

Mobile phone usage is tracked and monetized by Verizon, Sprint, Telefonica (as well as other global carriers) partnering with firms including SAP, IBM, HP, and AirSage that manage and package different levels of the collected data, the report notes.

And this Telecom-Data-as-a-Service (TDaaS) arena is paying off.

451 Research estimates that the global market for TDaaS is potentially worth $24.1 billion this year and is on its way to hit $79 billion in 2020.

Telcos are using this revenue stream to counter declining subscriber growth. By mining the data produced by cellphone users, the carriers can tie together location, mobile browser usage and call information into one data stream.

Then the telcos' partners package and sell the information. For example, SAP Consumer Insight 365 can analyze 300 cellphone events per day for each of the 20 million to 25 million mobile subscribers.

SAP, like most of the players testing the waters in the TDaaS arena, doesn't divulge the names of carriers providing this data or its client list.

As the Advertising Age report notes, "There is a lot of marketer interest in that information because it is tied to actual individuals. For the same reason, however, there is potential for resistance from privacy advocates."

SAP points out in the sales pitch for its service that marketers get a number of metrics out of this infostream, including data that determines "what consumer groups with a shared interest are using a Web site or app, how the use of a Web site or app varies over time, how often consumers visit one page versus another, which Web sites consumers go to before (or after) they visit yours, how all of the above varies by demographic."

[Read Global Data Collection Presents Big Challenges .]

Peter Eckersley, chief computer scientist at the Electronic Frontier Foundation (EFF) told Advertising Age, "The practices that carriers have gotten into, the sheer volume of data and the promiscuity with which they're revealing their customers' data creates enormous risk for their businesses."

However, SAP says it has privacy controls built into its analysis process. It receives non-personally-identifiable, anonymized information from the telcos and then takes measures to provide only the aggregated information to clients to prevent re-identification of individuals.

Despite those measures, SAP is concentrating on selling its service in North America and the Asia-Pacific region because it can't get the data from telcos in the EU, where privacy protections are more stringent than elsewhere.