Men in Black XXVII
It is time again for the yearly pilgrimage to Barcelona for the Mobile World Congress. Last year the 5G hype cycle began with several interest groups making their 5G plans known ahead of the expected standardization. It was also a year when the Internet of Things was high on the agenda, and in particular launches of smartwatches. Anyone who’s anyone (well besides Apple who missed the conference once again) released their latest version of the wristband that would change the future. Smart houses and equally smart cities were also on the hype list. A year has passed since then and the industry has evolved, at least in some areas. There are a few topics that are very close to me and which I believe merit a truly serious discussion at the event, not least because they are clearly directional – or even bifurcations – for the future of the telecom industry. This is my wish list…
Internet of Things is THE theme of this year’s Mobile World Congress, at least if you look at the congress agenda. Much progress has been made in the IoT space since last year. Gradually we are leaving behind us the somewhat pointless ‘who-can-say-the-highest-number’ game and begun to address some more important issues. In my view, the industry needs to focus on accelerating standardization or harmonization efforts, how to achieve cheaper and less power-hungry connectivity, integrated end-to-end solutions, commercial value and ROI versus initial cost, true ecosystems, and last but not least, privacy and security concerns. I am happy to see that that many of these topics are on the agenda, I am myself moderating a session where we will dig deeper into IoT connectivity and I hope that you join in on that discussion.
5G? Well. All eyes seem to be on 2020 as we make the journey towards 5G. Contrary to last year where 5G was mentioned as a way of marking territory, I hope this year we will be debating what 5G will really entail, plus the technology standards that will define it, and then not only the radio part. I believe that 5G is unlikely to be a disruptive technology that radically redraws the map of the mobile industry. Instead it will be an evolution of today’s LTE and LTE-A networks. Contrary to its predecessors, 5G faces different circumstances which points to a modest debut in four-five years. Firstly, 5G will mainly use refarmed spectrum, which is normally a lengthy process that requires replacement of end-users’ legacy devices, and also close coordination between different countries on what spectrum to use. Secondly, 5G will be compatible with LTE up to 6 GHz and therefore compete with legacy networks, but it will also move into the previously unused 6-100 GHz space where it will encounter tough competition from the continuously evolving WiFi ecosystem. I would really be excited if the mobile industry could go back to its roots and repeat the success story of GSM, with a coordinated launch of networks and services (I would have loved to also say Devices, but you old folks know the true story…).
Further, we can once again expect high-profile, thought-provoking debates between the mobile operator community and OTT service providers like Google, Facebook, WhatsApp, etc. The OTTs will repeat their claim that they come in peace and want only to work in mutually fruitful coexistence with operators. The operators, meanwhile, will argue that OTTs continue to erode their traditional revenue sources of voice and messaging and reduce them to little more than “a dumb pipe” without contributing to the cost of carrying the traffic generated by their services. However, I believe it is time for the operators to revise their attitudes and expectations around their place in the mobile ecosystem. The mobile internet, apps, and OTT services are here to stay and will grow in importance. Today’s mobile users want to (and will) use and enjoy a broad range of mobile services – from voice calls to messaging and chat apps, mobile internet access, social networking and video. But to do so, they need a reliable, good quality, and affordable mobile connection. Providing connectivity is not a dumb service, it’s the backbone of everything, the veins that allow life and services to flourish and something everyone benefit and could profit from. It is important to find a way for operators to (continue to) profit from the necessary network investments, which is key for a continued build-out, but also for the OTTs if they want to deliver good services.
In this industry we often talk about innovation, however the discussion usually lands in how operators can be innovative outside of their core business. Therefore, I was pleasantly surprised to see that one topic to be discussed at MWC is the new digital operator. Even though most operators have a long way to go before even being considered as fully digital, herein lies a huge potential for those who venture on that journey. In my view, a fully digital operator would entail a truly streamlined organization, and the closest thing we have to this today are usually the sub-brands or MVNOs. Although this theme is not getting as much attention as is warranted, it will be interesting to see where the discussion lands on what the new digital operator looks like at the conference. The world around operators is increasingly digital, so to stay relevant operators have to move in that direction as well. Not only in thoughts and pamphlets, but through real and bold actions.
Last but not least, we believe that the European Commission’s harder stance on consolidation is wrong, and that it will discourage investments in advanced telecommunication networks. This is unfortunate since the current M&A and consolidation trend that the industry is experiencing among operators is simply a natural evolution of the market, as for any industry moving from high growth to maturity. To safeguard the growth and success of the sector now and into the future, it’s time for all players involved – operators, regulators and investors – to accept the new reality of today’s mobile market. It’s time to focus on how to ensure that mature, consolidated markets of three or, in some special cases, four operators function effectively and maintain their competitiveness in pricing, innovation and investments – for the benefit of consumers, operators and States alike. The Mobile World Congress offers the perfect opportunity to take this discussion to the next level!
Apart from all of the above, we recently released our Predictions that describe where we believe the industry is headed in 2016. We will be on the look-out to see signs of that our predictions are on track. We believe they are. For instance, the Chinese smartphone vendors are experiencing huge growth and are beginning to ramp up their efforts internationally by pushing premium brands in the West. We are excited to see the impact that they will have in Barcelona and maybe they even win the product launch war?
To conclude and in an attempt to turn the above into more substance, we will be six Northstreamers at MWC ready to discuss and move things ahead, so feel free to reach out to us if you want to meet up in one form or another. My contact details can be found here. Hope to see you in Barcelona!