Increasing urban traffic in Asia Pacific calls for the implementation of dynamic traffic information services. But it is not easy.
Vehicle navigation systems are transitioning from closed systems, using only static content, to ones that incorporate dynamic information delivered on a real-time basis. As digital navigation continues to amplify in breadth from dynamic turn-by-turn routing, traffic information services rank atop the list of desired additional services. Heavy and ever-worsening traffic congestions are driving customer demand for high-quality traffic services. As a result, traffic is the number one most sought "navigation add-on" in both North America and Western Europe. With the exception of Korea and Japan, traffic services are more available and more advanced in North America and Western Europe as compared to the Asia Pacific region. NAVTEQ expects a steady increase in the usage of traffic services in all key markets around the world as traffic conditions worsen, navigation devices proliferate, and communication technologies expand.
NAVTEQ has very recently conducted research among North American and Western European GPS navigation users. In two separate studies, results indicate the strong demand for dynamic traffic information (Figure 1).
• Of portable navigation device and factory fitted navigation system users in Europe, 17 per cent rank traffic as the most desired dynamic content
• Of factory fitted navigation system users in the US, 28 per cent found traffic to be the most desired dynamic content offering
The clear global trend is that each year, congestion grows and commute times escalate, driving demand for traffic services delivered to the car. The spheres of congestion around major cities like Beijing, Shanghai, NY, Chicago, L.A., Paris and London have swelled, as they have in the rest of the world's cities. In the US, the Texas Transportation Institute estimates that the average commuter now loses 38 hours per year due to traffic congestion, up from 14 hours in 1982. This is due to the fact that vehicle population and overall roadway usage is growing at a faster rate than roadway mileage. For instance, TTI reports that between 2000 and 2005, freeway travel around Chicago grew 12 per cent while actual roadway expansion grew at a 2 per cent rate. Suburban communities suffer from similar patterns of peak travel time gridlock, with the idea of a 'reverse commute' no longer proving valid. Whether drivers are exiting or entering a major city at the end of a workday, their trips are lengthening. Traffic congestion in Singapore, in particular, is causing city planners to influence auto usage with driving restrictions and toll fees, as has already occurred in London.
Greater traffic congestion and longer commutes are the source for the growing demand for more timely and precise traffic information. In Europe, the groundwork for traffic services dates back to the early 1980s when innovation began with the introduction of RDS defined TMC services. Today, most FM stations in Western Europe use RDS, and receivers with RDS capabilities (mostly in-vehicle radios) are widely available across Europe. The most developed markets in the region for traffic information services are France, Germany and the UK, where services are provided mainly for controlled access roads.
Traffic-aware navigation first appeared in North America in 2004 pioneered by the Acura RL and the Cadillac STS delivered on the XM Radio platform. Since then, the market has burgeoned and traffic-aware services are now plentiful and found in a broad range of automotive, PND, and mobile phone-based navigation systems. Following the 2004 service launch, 14 car models offered traffic service in 2006 and 39 models in 2007.
Because of the prominence of its government backed vehicle information and communication system (VICS, developed in 1996) and its early introduction of a sensor based navigation system (by Honda) in 1981, Japan has led the Asia-Pacific traffic information market. Dynamic traffic services appeared in Korea prior to 2005, while traffic information is beginning to be offered in Singapore and Taiwan as well. Other Asian countries at this point look forward to developing traffic information services. NAVTEQ believes that market fundamentals including rapidly worsening traffic conditions and the maturation of relevant technologies, will drive introduction and growth of traffic services in those markets.
Implementing dynamic traffic information services requires a coordinated effort across a wide number of industry participants. Diverse factors such as data quality, data formats, communication technologies and business models must be simultaneously addressed. This coordination has existed to adequate degrees in North America and Europe, although emerging technologies continue to present new challenges. Though many Asian markets do not yet possess coordination across the business system that will be needed for successful traffic services, this concerted activity will occur sooner rather than later.
Data
High quality traffic data is the foundation of any successful traffic service. In North America and Western Europe, traffic data collection is established based on two decades worth of development, as well as fairly broad-based government support. Incident data is collected by a variety of public authorities as well as video cameras and aerial surveillance by private companies. Roadway speed values are captured on the most heavily travelled roads using sensors. Emerging technologies such as GPS tracking of "probe vehicles" (sometimes called floating vehicle data) and mobile network solutions (in which the movement of mobile phones through cellular networks is used to form traffic information) are beginning to have an impact on traffic data collection. This remains a challenge for Asia Pacific countries, especially in the short-term, as traffic data collection and organisation requires some level of government support (as has been the case for North America and Western Europe). Japan's VICS and South Korea's recently established Telematics Information Center (TELIC) are the exceptions in this region. It is important to note that emerging technologies like mobile phone and GPS-based probes alleviate the need for government coordination to a degree. There is not a unique approach or strategy for data collection that will beat all the others.
Data formats
The lack of standard data formats remains a huge challenge for the traffic industry, particularly in Asia Pacific. Data needs to change hands from data originator, through the data communications channel, and ultimately be incorporated into a navigation application. This coordination can best be achieved through adherence to common data formats. Data formats are also essential for properly locating traffic information on maps. In general, each public and private provider of traffic data takes their own approach to data feeds, resulting in a wide array of formats and protocols (such as XML, binary, text, FTP, HTTP, CDMA, Web services etc.). This poses a challenge for data aggregators in scrubbing and synthesising the data into one format that can then be used by end-user delivery channels. It also can cause data to be "dumbed down" to fit the "lowest common denominator" data format, losing key information.
In Europe and North America, the Traveler Information Services Association Forum (formerly the TMC Forum) have established standards including the widely used "Alert C" specification for encoding traffic information for use in navigation systems. These standards have in turn been adopted by organisations such as the Society of Automotive Engineers. Common traffic data standards have proven essential for proliferation in other markets; this process is in more nascent stages in Asia. For instance, in China, both the TMC and VICS formats have been under evaluation since 2005. Until standards are agreed upon, it will be difficult to coordinate activity across industry participants to achieve economies of scale for traffic products.
Communications delivery
A wide range of delivery technologies are available to distribute traffic data to mobile devices. Some technologies are ubiquitous around the world. These technologies include RDS-TMC broadcasts over analog FM radio as well as cellular network delivery. In North America, high bandwidth broadcast is available via satellite radio and hybrid digital (HD) radio. These high bandwidth channels enable communication of nearly 15 times more data than widely used RDS-TMC networks. The European market has yet to see commercial launch of satellite radio and high bandwidth FM broadcasts have not taken firm hold, in part, because countries have not adopted common broadcast standards.
Most Asian cities have a vibrant communications industry which can be engaged to deliver traffic data. FM radio station networks can provide a basic distribution outlet and cellular phone networks also provide an attractive channel. The emergence of high bandwidth broadcast networks and / or large area Internet networks (e.g. WiMax) can provide breakthroughs, but these must be developed for other uses and then leveraged by traffic providers.
Currently, five general business models are available:
• Free: In many European markets government agencies and private radio networks align to make RDS-TMC services freely available
• Periodic subscription: In the US, satellite radio providers offer navigation traffic services for a surcharge of approximately US$ 4 per month. This requires a billing mechanism and a means for ongoing communication with end users.
• One-time fee: The VICS service in Japan and many premium traffic services in EU embed one-time fees into the price of the (VICS) receiver in the navigation product.
• Transaction fee: While theoretically available, transaction based pricing has not been shown to be a successful model in the vehicle market.
• Advertising: Enormous potential exists for advertising models to further drive wide-spread consumer adoption of traffic services. In North America, advertising models generate well in excess of 90 per cent of the over US$ 400 million in annual revenue from commercial traffic services (which consist mostly of radio and television traffic news reports). It is unclear whether the power of the advertising model can be harnessed to propel adoption in the same way, as it has driven adoption of other services such as television, radio, and the internet. OEMs understandably may be reluctant to open up the vehicle environment for advertising-supported traffic without first thoroughly testing the services.
A great deal of work is underway in North America and Europe to select the right business models to drive wide spread adoption. Momentum seems to be building for the one-time fee approach within the vehicle segment. This is likely due to the relatively high cost of the vehicle (as compared to personal navigation devices), resulting in the one-time fee having a negligible impact on the overall purchase price. Many cellular telephone applications in North America are already advertising based and do not charge a fee to consumers.
As stated earlier, traffic services are driving the transition of vehicle navigation systems from closed to open systems that incorporate information delivered on a real-time basis. Once connectivity to a device is established for traffic services, other content and services can be introduced. This "second step" is already underway in North America and to a degree, in Europe. The development of in-vehicle traffic information services will play out differently in Western Europe and Asia-Pacific, as their respective government programmes and infrastructures vary greatly.
As connectivity to devices has been established, complementary services are leveraging the same basic infrastructure. NAVTEQ sees weather, fuel-prices and parking information as the next demand-driven services to be provided through real time traffic delivery. Weather conditions are desired for their impact on travel times. Fuel prices will be important as they continue to climb. Finally, parking is desired because of its high impact on travel time and the convenience this information would provide. There is a range of services already emerging in North America with Microsoft's 'MSN Direct', Sirius' 'Connect' and NAVTEQ's HD Radio Service. One link will be proven critical worldwide, the true consumer value of in-vehicle dynamic traffic services is inextricably pegged to the accuracy of the underlying maps on which these services are predicated.
Howard Hayes is currently the vice president of NAVTEQ Traffic. He holds an MBA from Harvard Business School and a BA from Dartmouth College. Hayes started his career as a management consultant for McKinsey and Company and later established Ceres Partnership. Prior to working at NAVTEQ he worked with Outboard Marine Corporation as Vice President, Strategy.
