When I wish upon a star…
It’s that time of the year again, time for the mobile communication industry’s biggest affair – the Mobile World Congress. It’s the 25th time I make the journey to discuss industry happenings and meet our global clients. The Mobile World Congress has evolved from an “intimate” gathering of some five-six hundred mobile executives to being THE place for product launches and trying to attract the attention from over ninety thousand attendees as well as the rest of the world. In all the hype and hysteria of individual products and innovations, I would like to widen the perspective and discuss some topics that we believe are truly important for the future of the telecom industry.
Internet of Things, M2M, Internet of Everything, you name it, the talk of the town is connected devices. Each prediction on the number of devices is more far fetched than the other, be it 50 billion connected devices by 2020 or 500 billion IoT devices by 2030! We will leave the dreaming to others, but we are however excited about what is happening beyond wearables, connected homes and self driving cars. At the Mobile World Congress we will look for signs of innovation, products and services that could possibly point to market uptakes like above. Right now we have a hard time to see what would bring the mobile IoT sector beyond the 2 billion mark by 2020. In addition, we will also look for clues on how big this market really is for operators.
Another term of the year is 5G. Around the world operators accompanied by network infrastructure vendors are all in the race to announce who will be the first to launch 5G, or to announce what 5G is all about. Still, we are only expecting window dressing and trials to happen prior to 2020, so how about starting in the right end instead and discuss what 5G actually should be and what it is needed for? The discussion so far only seems to circulate around the technology aspects as in data rates or latency. To just improve throughput and latency in 5G is far from what is required for making operators relevant in the era of Internet of Things and indoor broadband markets. What about bringing some relevant use cases, and for what kind of behavior or in which areas? It’s time to avoid the hype of 5G technologies and instead start discussing the landscape and architecture behind it.
There is a clear trend in European operator market of converging and consolidating. There are many reasons for this, and one of them is the attraction of having both fixed and mobile assets. You only have to look at the UK market to see how fast operators are moving into the quad play scene after BT’s acquisition of EE. And the same thing is happening on other markets as well. Yet, Mobile World Congress still has a very clear mobile-only focus. Isn’t it time that this changed and that mobile operators along with cable operators and OTTs are represented? We were wishing to see signs that this year would be different and that the participants better reflected the current market situation. However, looking at the agenda, our hopes are not set high.
SDN and NFV are becoming a reality, yet little attention has been paid to quantifying or understanding the benefits that operators can expect to achieve. As for SDN, the main cost savings will be on the OPEX side as the benefits are mainly about automation, shorter lead times and better network programmability and control. As for NFV, the main benefits lie in a flexibility to scale-up and down services. NFV can lead to some CAPEX savings but will not result in a major impact per se, as increased spending on software will most likely dilute savings from reduced hardware. The real savings associated with SDN and NFV are much more coming from the underlying business-, network- and IT consolidations and transformations, and we are hoping that this will be the focus when discussing the topic at the congress.
No one can possibly have avoided the news on how Apple is dominating the mobile device industry, but Apple is actively avoiding the Mobile World Congress. Yet, the event will be packed by players who are to a large extent dependent on the success and failures of Apple, and who are looking to score some insights into future possibilities, while the major influencer doesn’t even bother to show up. And maybe Apple doesn’t have to, because they have such a leading and dominant position anyway? Several who have tried to challenge them have failed, and even if the new kid on the block, Xiaomi, is gaining market shares by directly trying to target Apple, can any player challenge Apple without landing in a profit-eating price dilution? If history repeats itself (which it usually does), the real threat to Apple is Apple itself.
And last but not least, what would the Mobile World Congress be without innovation? There are many dimensions of innovation that need to flourish for our industry to evolve, and here’s a medley of what springs to mind; As spectrum gets more and more clogged, I’m hoping to see a player contribute with real innovation regarding in-house coverage; Last year in our predictions, we anticipated ApplePay to be the front runner to push mobile payments over the edge. I look forward to hopefully be seeing other big players follow suit, so that mobile payments can finally take off for real; App Planet will as usual be packed with startups with all sorts of fresh ideas. Startups with wild and less wild ideas are an essential part of this industry, and as part of our business acceleration program Upstream, I will be looking for startups who provide products or services that are really innovative and can fuel a sometimes slow-moving industry forward.
We will be some 4-5 Northstreamers at MWC so feel free to reach out to us if you want to meet up. Our contact details can be found here. Hope to see you in Barcelona!
Bengt is the CEO of Northstream