Mobile Carriers Cashing In On Mining Your Data - InformationWeek

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IoT
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Mobile // Mobile Business
Commentary
10/29/2015
04:06 PM
Larry Loeb
Larry Loeb
Commentary
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Mobile Carriers Cashing In On Mining Your Data

Some major mobile carriers are selling your data under the radar, and it's potentially worth $24.1 billion this year.

9 Ways To Bulletproof Your Privacy Policy
9 Ways To Bulletproof Your Privacy Policy
(Click image for larger view and slideshow.)

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.

(Image: nikauforest/iStockphoto)

(Image: nikauforest/iStockphoto)

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.

Larry Loeb has written for many of the last century's major "dead tree" computer magazines, having been, among other things, a consulting editor for BYTE magazine and senior editor for the launch of WebWeek. He has written a book on the Secure Electronic Transaction Internet ... View Full Bio
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SecureThoughtsC
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SecureThoughtsC,
User Rank: Apprentice
10/30/2015 | 8:15:42 AM
Mobile Carriers Cashing in On Mining Your Data
The issue is it is always about money. Anything any company can do to increase it's profits, no matter how decieving, is OK in their books. I think in exchange for making a profit off of you and your data usage, they should decrease how much they charge for their services. It only seems fair, but life isn't fair, and every company is out to make money for themselves.
larryloeb
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larryloeb,
User Rank: Author
10/29/2015 | 6:48:32 PM
Re: Mobile Carriers Cashing In On Mining Your Data
>a new recipe, but it's the same great taste we're used to.

 Yeah, but the telcos just suck it out as profit.

Even though it uses what customers give then, they don't share the rewards with them.

And the EU telcos seems to be very very scared of it.
zerox203
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zerox203,
User Rank: Ninja
10/29/2015 | 5:03:41 PM
Re: Mobile Carriers Cashing In On Mining Your Data
@Larry,

It's true that the specifics of what goes on are rarely disclosed. Maybe it's buried in the ToS or an EULA somewhere, but who reads those? It's a case of the providers shooting first and asking for forgiveness/permission after someone sues them, which I fully agree is scummy. What I meant was, I think many people are aware that this kind of thing generally happens in the mobile space. We have targetted ads on Facebook, and people know that comes from their habits being snooped on. When you install an app, you see what you're giving it permission to do - and there have already been many controversies in the past with those apps doing more than they're supposed to which (I hope) many people are already aware of. Maybe telcos selling the info directly to people like SAP is a new recipe, but it's the same great taste we're used to.
larryloeb
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larryloeb,
User Rank: Author
10/29/2015 | 4:48:06 PM
Re: Mobile Carriers Cashing In On Mining Your Data
I dont think even most sophisticated users know about this one.

If they charge for the service, do they acknowledge this in the EULA?

Everyone go check your carrier's privacy standtement.
zerox203
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zerox203,
User Rank: Ninja
10/29/2015 | 4:35:29 PM
Re: Mobile Carriers Cashing In On Mining Your Data
I would question whether this is really 'unbeknownst to most users' - for those of us with our ear pressed to the industry floor, it's well known that this has been par for the course for some time, but even my more technology-phobic friends (who, of course, are chained to their smartphones) seem to have a general awareness that they're the product being sold. Though, doubtless there are countless older users who unaware, and I see where the moral argument comes in. Still, I think 'par for the course' is quite a fitting term - you get all these services for free (not your phone service itself, to be fair), you give up something else in return - it has to get paid for somehow. The data is anonymized and, with any luck, you may get more relevant ads out of it. I'm not one to get up in arms about it.
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