Telefonica targets retailers with street smart data

LONDON Mon Oct 8, 2012 7:10pm EDT

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LONDON (Reuters) - Telefonica is setting up a business to sell data it collects from millions of its mobile phone customers to retailers which could provide the company with a new source of income.

The Spanish telecoms group, owner of the O2 brand in Britain, Germany and other European markets, has created Telefonica Dynamic Insights to interpret, analyze and sell anonymous data from its phone subscribers.

With falling revenues from traditional voice and text services, European phone companies are looking for new sources of income and selling data could be one of them.

Telefonica's first product, Smart Steps, will measure footfall for retailers, said Stephen Shurrock, chief commercial officer at Telefonica Digital. Other products would follow, he said.

By using the data, retailers would be able to see, for example, how many teenagers were shopping where at a particular time and day, which could help them tailor products, promotions and staffing.

Shurrock said some mobile data was already used for services such as traffic management, but advances in computer storage and analytics meant huge volumes of information - called big data - could be mined in greater depth than ever before.

But the product aimed at retailers would not allow them to identify phone users, he said. "It's not about individual customers."

The company is teaming up with market research agency GfK to launch the service, which will be available in Britain, Germany and Brazil later this year.

Telecoms consultancy Ovum's principal telco strategy analyst Jeremy Green said data was already being sold by operators, but in a more piecemeal way than Telefonica was planning. He said Vodafone, for example, sells network traffic data to navigation firm TomTom.

"This is a good and clever thing to do, and it fits in with an overall Telefonica strategy, which is to look for revenue streams other than just selling connectivity," he said.

(Reporting by Paul Sandle. Editing by Jane Merriman)

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