How telcos plan to make billions by selling and combining customer data

Over the past ten years, there's been a major shift in how cellular providers make money. Wireless data has exploded as a major profit driver, which will come as no surprise to anyone forced into buying data at ~$10 per GB. This shift, and their collective success in monetizing it, is how companies like Verizon, AT&T, drove huge revenue gains over the past ten years, even as voice and texting accounted for smaller pieces of the revenue pie and growth rates slowed as the smartphone market neared saturation. If you can't sign up more subscribers and they don't talk as much as they used to, sell people on the feature they do use -- mobile data. Even that, however, isn't enough cash to keep investors or executives happy, which is why there's a new "exciting" field in data sales -- Telco Data as a Service (TDaaS)

Pick the two locations where a device spends most of its time, and you've almost certainly found the owner's home address and workplace. If the device passes your place of business at 8 AM and 6 PM, you've found their commute route home and can easily extrapolate a list of most-likely destinations.

From AdAge: SAP's Consumer Insight 365 ingests regularly updated data representing as many as 300 cellphone events per day for each of the 20 million to 25 million mobile subscribers. SAP won't disclose the carriers providing this data. It "tells you where your consumers are coming from, because obviously the mobile operator knows their home location," said Lori Mitchell-Keller, head of SAP's global retail industry business unit.

Elsewhere, the article notes that test applications that take advantage of these new exercises in intrusive data mining combine this telco information with store-specific data and provide businesses with real-time information on whether or not their customers are comparison-shopping, chatting with friends, or checking Facebook. These applications can separate store visitors by age, gender, and visiting hours, and link that information with the user's web history.

Putting Verizon in perspective

Remember those untraceable tracking cookies Verizon is using again, except this time it actually sells your personally identifiable information to any AOL advertising partner it wishes? It's not an accident. It's not an artifact or a mistake. It's the leading edge of a strategy we can expect to see adopted across the entire industry. "We're talking about linking a household and a billing relationship with a human being," said Seth Demsey, CTO of AOL Platforms.

The Supreme Court has ruled in the past that mobile devices were different from other types of possessions precisely because the modern smartphone contains so much more information about a person than any pre-Internet piece of documentation. It combines business and personal contacts, a record of phone calls placed and received, notes, games, personal and work email, documents and images (both public and private) and a record of one's browsing history and activity. The idea that carriers should have carte blanche to sell that information to the highest bidder is reprehensible. The FCC may take action in some situations, but not with business practices like those described above.

AT&T and T-Mobile claimed to AdAge that they don't share this kind of information. Verizon and Sprint, unsurprisingly, refused to comment.

The most troubling thing about these policies is the degree to which these practices have been normalized. From big box retailers to video card manufacturers, every major company today feels that the mere act of owning, purchasing, or using a product means you've agreed to be relentlessly tracked, monitored, and codified. Apple may deserve the thinnest of credit on this front, but not by much. Buying network service from Verizon for over a thousand dollars a year isn't a transaction between you and a service provider, it's an agreement in which you agree that companies you've never done business with or agreed to share information with should have the right to peer into your banking and shopping habits, your web history, or your personal preferences.