A Cork company hopes to take a slice of the expected $31 billion (€36.05 bil lion) mobile-services market by exploiting the ability of mobile phones to report the exact location of their users.

Formed last July by Mr Padraig Murphy, formerly with Andersen Consulting's telecoms consulting group and now company managing director, and operations director Mr John Sheehan, Cyantel develops and hosts applications that can be delivered over wireless mobile devices.

Based in Cork city, the company employs 20 people and is seeking £2 million (€2.53 million) in funding. Nortel senior vice-president Mr Liam Nagle is a private investor in the company and a non-executive director.

With analysts predicting that mobile phones will be widely used to access and deliver data, and as the profit margins on voice services are squeezed, Mr Murphy thinks mobile network operators will be eager to have a third party, such as Cyantel, provide applications and services in exchange for a cut of revenue.

"Voice is being commoditised and [operators] recognise that," he says.

"At the same time they're being forced by their peers to invest huge amounts in new technology" - such as acquiring licences for and then having to construct the next-generation 3G mobile networks, which are expected to cost an estimated $100 billion this year alone.

The last thing operators will want to do is develop and manage complex data services, but operators know that services will be where their profits lie in the future, he argues.

Mobile phones already have the potential to pinpoint users. The United States recently passed a law requiring that all mobiles should be able to be tracked by emergency services. In Europe and Asia, manufacturers are looking at installing GPS (global positioning system) software in all mobile handsets, turning them into tiny GPS stations that can be located by satellite.

Technologies for making use of such information are still in their infancy, although it could be possible eventually for your mobile phone to offer you a discount voucher as you pass a department store, or let you know which restaurants in your vicinity have a table free. One such venture opened on an experimental basis in Hong Kong last year.

Cyantel is counting on using the "where" information about a mobile user to offer a range of services directly to operators, which can then offer tailored packages of services initially to corporate clients and perhaps later to consumers.

Most likely, network operators would offer the services under their own brand name, says Cyantel's sales and marketing director, Mr Aengus Linehan, who also previously worked with Andersen Consulting and later was worldwide telecoms marketing manager with Hewlett-Packard in Silicon Valley.

Cyantel will not host the services in Cork but has arranged a partnership with HewlettPackard, where the computing giant will provide a base in its web-hosting centres around the world for Cyantel's applications. The company says it has signed its first European customer for services that will for now focus on fleet management.

Mr Linehan says Cyantel's existing product would enable a company to track all of its vehicles. Dispatchers could assign jobs or deliveries to the best-placed individuals and would have an overview of an entire fleet. A company's customers could also be given the ability to track the vehicles - for example, a haulage company could enable corporate customers to pinpoint where a needed delivery is at any given moment.

Mr Linehan says he expects such services to become the norm and a competitive advantage, much as they have for DHL and UPS, which let customers track package deliveries on the Internet.

Cyantel aims not just to supply such services but to manage service logistics such as billing, one of the biggest operating costs for network operators. "Our business model is based on taking as much of that overhead off the operator as possible," says Mr Murphy. Eventually Cyantel believes it will be able to offer "more advanced and tailored services to individuals within a corporation", he adds.

However, Mr Linehan and Mr Murphy recognise that the market for mobile data services is young and untried. The predicted mobile Internet revolution so far has been a "revolution with a whimper", admits Mr Linehan, with a vastly smaller take-up of WAP services than was originally predicted.

He says the limitations of WAP allow operators to supply only six or seven services, such as delivering share-price information, purchasing tickets, the ability to check a bank account, or to read newspaper headlines.

By contrast, the more advanced 3G networks would increase the range of possibilities to 100 or 150, he says.

The fact that no global consensus has been reached on the technologies for tracking location through mobiles creates a challenge for Cyantel, since the company needs to develop applications today for tomorrow's networks.

In addition, such uncertainties mean network operators are holding back on expanding networks and committing to fresh technologies.

Handset manufacturers have been reluctant to go through the costly process of producing handsets for any given technology system, particularly as most have been developed by small, unknown and untried companies. "Operators are waiting to see what way the technology will go," says Mr Linehan.

As a buffer, Cyantel is developing applications to work with a variety of technologies. Mr Murphy figures it will be four to five years before location technologies are completely mainstream.

Although many analysts believe customers will not want offerings that are "ring-fenced" to a particular operator's network and will instead seek services through specialised portal sites, Mr Linehan believes that, at least in Europe, "operators can become the digital retailers of the 21st century".

In the US, portals such as Yahoo and Excite have much stronger brand names than mobile operators, he says. However, "in Europe, there's very little strength of [Internet company] brands in the market, so operators could take control."

Cyantel's directors say they will target the European market first and then turn to Asia and Latin America. The United States is more formidable and would require a dedicated American office, says Mr Murphy.

After the initial round of funding, expansion would require between £3 million and £8 million, he says.

"Our goal is to be the biggest ASP [applications service provider] of value-added services to mobile operators worldwide," he says. That's a grand vision and an indication that the Cork company can talk the talk about mobiles. Next up is the real challenge of turning talk into action.