From 3GSM to IoTernity
There is always something to celebrate at Mobile World Congress. This is the 12th time it’s being hosted by Barcelona, and the Mobile World Capital is thus leaving Cannes on the French Riviera safely behind in the record books. Though some of us have very fond memories of Cannes, perhaps because the industry was smaller back then and everybody knew each other, and because the seminars, exhibitions, hotels and restaurants were all a stone’s throw from each other, and the show was still reasonably affordable, or at least that’s how I remember it!
In 2007, 3GSM World Congress switched names to Mobile World Congress, and something important happened about a month prior to the event; Apple announced the iPhone 2G. While it was discussed at the event, it wasn’t deemed particularly important. Another issue that wasn’t much discussed was Google’s plan to enter the mobile business through a company called Android Inc that they had acquired back in 2005. 10 years later, we know these were two major game changing events that took place in the backwaters of the yearly merrymakings of the wireless industry. Today, Apple (215.6 B$ in revenues) and Alphabet (90.27 B$ in revenues) are behemoths of the industry that somehow have very little presence, if any, at MWC other than what each and every one of the ca. 100k visitors are holding in their hands and using to find information. I guess it is fair to say that even if we are all looking for the next game changing companies and events at MWC 2017, they are not that easy to detect in their infancies. But surely they are there, somewhere…
Beyond looking for game changing companies and events, there are a couple of areas that we at Northstream will focus on this year at Fira Gran Via and Fira Montjuïc (yes, two places this year again). The first one is the state of 5G. I think MWC this year coincides with the ‘peak of inflated 5G expectations’, to borrow a term from Gartner’s hype curve. Qualcomm launched a study a few weeks ago claiming that the 5G value chain could generate up to $3.5 trillion dollars in 2035, early last week Ericsson estimated a $ 585 billion market opportunity for 5G technology by 2026, and then last Friday O2 UK said that, by 2026, 5G will provide more economic value to the UK than fiber-based fixed broadband will. It is hard not to think about that famous quote from When Harry met Sally, but joking aside our focus on 5G in Barcelona will rather be on what will happen over the next crucial 3-4 years, when the foundations for a future billion or trillion dollar market are established. What do the roadmaps for the various vendors look like? Will network nodes delivered today be software upgradable to 5G when the standard is set in 2019? And of course, how will Regulators handle spectrum and license spread? Given that all of the Operators we work with around the world are capex constrained, i.e. always a little bit behind the investments needed, we must ask ourselves how much of their budgets will be allocated to 5G in the next couple of years (as opposed to continued 4G investments). Then, of course, apart from the already announced Fixed Wireless Access and improved capabilities for mobile broadband, what is the next tangible revenue growth opportunity for 5G? There are many contenders and we are excited to see what answers we can get in Barcelona.
On to our second focus; it will be very interesting to follow smartphones launches this year. Here we have the potential for game changers. Samsung had a tough year with its Galaxy Note battery problems as well as big losses of market share, in particular to OEMs in India and China. The rumours are undecisive if they will be announcing the Galaxy S8 at MWC, but if they do, apart from being completely free from battery problems, it has to differentiate itself from the iPhone, all the Chinese vendors e.g. OPPO, Vivo, and of course Huawei, who will all launch new smartphones for sure. Another interesting comeback attempt is obviously Nokia under the the helm of HMD. Nokia is still a strong brand with many fans around the world, but the market is very different from its heydays a decade ago. Will they be able to create true differentiation although it will be yet another rectangular touchscreen android phone? At MWC we will hopefully get some answers to that question.
The third focus area for us is IoT. We have spent a fair amount of time working both ourselves and with our clients on that area over the last year, and we look forward to discussing with vendors and operators what the status really is today. Good progress has been made on the operator side with NB-IoT and MTC trials and launches announced across the globe. What we are particularly interested in is what role operators will be able to play beyond connectivity, SIM and adjacent services, be it for the automotive industry, healthcare, smart cities or any of the other “obvious” IoT growth areas. The IoT market is truly huge, but in the end the supplier side revenue opportunities largely lie in services and system integration. That being said, the jury is still out.
Among many things, the one I maybe look forward to the most is the panel I have been invited to participate in on Wednesday, 10.00, on Mobile World Live TV! The topic is Competition is King, and we will discuss the ins and outs of competition and consolidation in the operator market. I will continue to advocate that in a declining market (yes, it’s true in many places, and will be in many others!) consolidation is inevitable, but I’m sure that other people in the panel will have different views. Looking forward to a diligent and progressive debate!
Finally, the most important aspect of MWC is the amazing networking opportunities it presents and we look forward to meeting all of you in Barcelona. Feel free to reach out to any of us for a coffee/drink/lunch/dinner and a discussion of what is the next disruption or big thing in our industry. It will without a doubt be there, right in front of our eyes, and we may fail to see it, just as we missed Apple and Google 11 years ago. But a touch-base leads to an open discussion leads to a detailed analysis leads to a step ahead of everyone else leads to…
If you will miss MWC or want to listen to the insights we have gathered, we will have a breakfast seminar on March 14th where we dive into the key takeaways from this year’s event. Looking forward to seeing you! Have Fun!
Bengt is the CEO of Northstream