Researchers at AT&T (NYSE:T) Labs for several years have been studying how anonymous mobile phone usage data could help city planners get a better sense of where people live, work and visit--thereby potentially improving traffic congestion, mass transit planning and preparations for major events like parades. The efforts offer a clear look into how wireless carriers can participate in the nebulous but potentially lucrative market for "big data."
AT&T Labs researchers have been studying this topic since 2009. In 2011, the scientists gathered billions of "call data records" (CDRs) from over a million wireless users in Los Angeles, San Francisco and New York City. The researchers obtained the data from an unnamed "cellular network" that probably belongs to AT&T. A report about the study goes to great lengths to explain how "cellular customers rightfully have the expectation that their individual privacy will be preserved" and how the scientists took "several active steps to protect privacy" by anonymizing phone numbers, removing demographic information and using only antenna locations rather than specific phone locations.
After crunching the numbers, the researchers came up with some interesting findings. For example, people who live in Los Angeles travel longer distances on a typical day than people who live in San Francisco, who in turn travel longer distances than people who live in Manhattan. However, the longest trips taken by residents of Manhattan are much longer than those taken by residents of LA.
A separate, related study of Morristown, N.J., by AT&T researchers showed that five times as many people were in Morristown for the St. Patrick's Day Parade on Saturday, March 12, 2011, as on a normal Saturday. And the researchers found that most of those attending the parade came from the north and west parts of the city, rather than from the south and east parts. "Previously, it has been difficult for local officials to obtain this information except through expensive surveys," noted the researchers.
The upshot of AT&T's investigations, according to reports from the AT&T Labs scientists, is that cellular network information can be used to enhance or even potentially replace expensive and infrequent census surveys. The data can help city planners design more efficient mass transit routes, allocate security more effectively for events like parades, and generally get a sense about where residents are and where they're going. "In contrast to expensive and infrequent census approaches, the fact that CDR-based mobility data can be collected in unobtrusive ways has the potential to make broad use both cheaper and easier," according to one report. After all, according to CTIA the penetration rate of cell phones in the United States was 101 percent in June of last year, which means that data obtained from all those phones accurately reflects Americans' general travel patterns.
But perhaps the most interesting nugget in AT&T's research reports hints at a model the carrier could potentially turn into a business. "Our most recent work seeks to provide fully synthetic models that mimic the individual and regional mobility patterns seen in the measured CDRs. Such models, we believe, will further broaden the ability of scientists and planners to perform accurate, low-cost, and privacy-preserving human mobility studies," the researchers explained. I'm assuming this "synthetic model" would be created from real-world traffic data and could be sold to anyone who needs data on Americans' movements. If you were a city planner, how much would you pay to be able to calculate exactly how many people would attend a free concert in the park? Or if you were in charge of buying land for new fast food restaurants, how much would you pay to know exactly how many cars pass by a particular intersection?
To be clear, AT&T is by no means the first carrier to dig into its customers' usage data. For example, Verizon Wireless (NYSE:VZ) not only is digging into its customers' data, it created a business around it: Precision Market Insights. According to Verizon, the business helps "understand the demographic, geographic and psychographic makeup of your target audience." It can also "isolate where consumer groups work and live, the traffic patterns of a target audience and demographic information about what groups visit particular locations." Similarly, Telefónica Dynamic Insights' "Smart Steps" will use "fully anonymised and aggregated mobile network data to enable companies and public sector organisations to measure, compare, and understand what factors influence the number of people visiting a location at any time."
Even President Obama is getting into the swing of things, according to a recent CNET report, by authorizing AT&T and other Internet service providers to monitor Web traffic with the goal of cyber defense.
"One of our predictions for 2013 is that 'big data' will become a strategic priority for all mobile operators in 2013," noted analyst firm CCS Insight in a February report. "This is because operators already have a lot of user data and are starting to use it commercially. In addition, big data is one of the hottest topics in the tech industry, so it is a good time for operators to announce moves in the area."
CCS noted that carriers will need to invest in some really smart people to create some really smart software to take advantage of this big data opportunity. But as carriers struggle against declining voice and text revenues, and increasing competition, I'm betting most major carriers will figure out ways to take advantage of the data they already have.
As for mobile users' privacy, it appears that that battle is already over. Verizon's Precision Market Insights launched late last year and generated some concern from public-interest groups. Today, though, it appears Verizon's stance on wireless contracts is generating far more concern than its use of customers' behavior to make money. --Mike | +Mike Dano | @mikeddano