This year I brought my wife and 2-year-old son to Barcelona; we arrived on the Thursday before MWC (Mobile World Congress). Barcelona is great for small children with lots of playgrounds, some with crèches that bring out their toys to play with making it great fun. The restaurants go the extra mile in making the experience of dining out with small children a delight, yes I did say ‘delight’ and ‘dining with small children’ in the same sentence. The later date (end of Feb) avoided the clash with Valentine’s day and Chinese New Year, and meant Barcelona’s warm enough to eat outside in the evening. But enough of the holiday experiences in Barcelona, down to the business in Barcelona, MWC.
Summing up the feel of the event:
This was the year the Mobile World clearly entered middle age, growth even in developing markets is slowing, and as discussed previously we’re entering uncertain times with respect to regulated service revenues. With middle-age comes that spare tire around the waist, aching joints, and just not being able to move as fast. There are only two things to do to mitigate them: eat healthier (adopt web principles) and exercise more (work harder, faster and smarter – i.e. use the years of experience (failure) to your advantage). As we reach middle-age, we know what we need to do; it’s just motivating ourselves to do it as old habits are hard to change, but change they must else the industry could reach its demise prematurely.
It was clear at the event that the mobile ecosystem is having the revenue sucked out of it from other more agile ecosystems such as Consumer Electronics, Web, and Enterprise / IT. The growth in Apple’s revenues is coming directly from the mobile ecosystem, witness operators complaining about Apple’s impact on their profits. The signage around the event was focused on smartphones (Consumer Electronics). Another topic was the impact of OTT (Over The Top), that is the web ecosystem sucking out and also destroying telecom revenue. And there’s another ecosystem that has beaten telecom to the much heralded opportunities in payment services, M2M, and cloud; the Enterprise / IT ecosystem with its strong existing customer relationships and the ability to deliver business solutions to business problems not just marketing telecom services. We’ve got to understand these other ecosystems if telecom is going to compete.
Some of the operator discussions felt like I was watching King Canute (Knut) commanding the tide not to come in, as they talked about cloud or M2M or payments or why OTT providers should pay for using their network. I hold the GSMA partly to blame for this lack of realism, it’s a greedy political talking shop, not an industry trade body helping us manage the transition to middle-age. However, as we’ll discuss in this weblog, some operators are managing the transition into middle age better than others.
The Future of MWC:
I’m predicting a long, slow decline in the conference over the coming years for several reasons:
- Continued decline in operator attendance, most of the conversations were between two suppliers going, “I’m great, you’re great, let’s be great together!” They don’t need to travel to Barcelona to do that.
- The GSMA is not fulfilling its charter of “representing the interests of mobile operators worldwide” rather is behaving like a greedy monopolist with the show. Given the crime problems and now social unrest, remaining in Barcelona for the next 7 years shows a disregard for the safety of its 67k visitors. The move out of the city ensures suppliers cannot use local hotels for their meetings, they’re forced to use the over-priced GSMA rooms. The move to a larger facility ensures the GSMA can add more themes to get more revenue and make the conference even more unfocused. It will be much more difficult to get to the show as its out of town, so travel is now totally at risk from strikes. Greed has over-ridden common sense in the GSMA. MWC has become too expensive, too unfocused, too much BS and political double-talk, and not enough open balanced debate. Operators please start holding the GSMA accountable to clear, quantified objectives. If you’re restricting attendance to MWC, as discussed in this article, something is wrong with what the GSMA is doing with this show.
- In the beginning of the show’s history it was quite operator centric (and run by Informa), a serious event focused on solving the challenges the industry faced in building out the GSM mobile network. As the networks got built the show became more vendor-centric as their marketing dollars drove the agenda (and the GSMA took over). And today it’s now become GSMA centric: pack as much in (unfocused), avoid serious debate (political), and charge rates that make no sense given the GSMA is a not-for-profit organization. Medium sized companies now spend between $250-750k at the show for a few leads given the low operator attendance, hence it’s now not generating the necessary returns. In my meetings many suppliers are considering downsizing their involvement in the show. My recommendation is hire an evangelist and get a much better return on investment.
- Operators need to hold the GSMA to its charter. Demand the GSMA cut the political BS, represent the industry not itself, cut costs, and shake up MWC to help the industry manage the transition into middle age rather than further lining the pockets of the GSMA.
Interesting data points and observations:
Most bankers find it difficult to get reasonable company valuations on telco pure-play start-ups; the start-up needs an enterprise / web story as well. Telco is now just a vertical in the IT industry, and an unattractive one at that for most investors. This has a serious impact on the ability of the mobile industry to innovate.
Based on all the operators I contacted before the show; European operator attendance is down about 15%, APAC about the same, North America up (thanks to a large contingent from AT&T), and Middle East & Africa down slightly. Most of the visitor growth came from suppliers. This was corroborated by other operators and suppliers, I see an increasing gap between what people are saying on the floor of MWC and the BS from the GSMA’s announcements.
Handsets have become very samey, in the hardware there is now rapid commoditization, its all about the ecosystem in retaining value.
The HTC One X and Intel Medfield reference design have finally removed the ‘Android-lag’, an annoying problem for those trapped in the Apple ecosystem. Its becoming increasingly difficult to point to the differences between Apple and Android experiences. If the Amazon Phone(s) also remove the ‘Android-lag’, then Apple will finally have serious ecosystem competition.
Android was again the highlight of the event, their stand in Hall 8 demonstrated again this year the power of an ecosystem. Network Equipment Providers please take note. There were many interesting innovations including embedding capabilities everywhere, e.g. in ski goggles with a heads-up display.
The word developer was used everywhere. However, most of the people using that word had no idea what it means, given what they claim developers want. I’ve worked on many developer surveys over the years, I’m on the board of developers, I employ developers (so I am technically a developer as well), and many friends are developers. I know enough that I cannot adequately speak on their diverse behalf. But at the show people with no experience were talking with such confidence yet what they were saying was absolutely wrong.
Formulaic tag lines were everywhere: “made-up word for some product or service” by “company name ending in usually i or z” enables awesome awesomeness. It says nothing, it’s a waste of resources, and likely shuns B2B customers. I really do no care for all your made up words, you have a company name that’s OK, for everything else keep it simple and clear. Make it easy to understand specifically what you do. You don’t need new categories, just use the old ones and mash them up like “cowboys in space” for Star Wars, rather than using lots of acronyms, buzz words and claims of new categories
Handset vendors appear to have run out of ideas, its down to mine it bigger / faster than yours. Its now clearly all about the ecosystem.
Augmented reality demos were everywhere at the show, telecoms is only 4 to 5 years behind the web guys with such demos. It reminded me of hype around virtual reality about 20 years ago.
There’s no such thing as the mobile internet, it’s the internet, we can access it over multiple networks. Also the term mobile is used very loosely for any device beyond a desk-top PC that accesses the internet via wireless. iPod Touches, the majority of iPads, all Kindle Fires, most laptops, tablets, and slates, are lumped into mobile, even though they cannot connect to a mobile network. They’re wireless devices, not mobile devices. So operators need to be very careful on the numbers they’re being quoted on addressable markets as true mobile devices account for only a small fraction of the market, and bare in mind most customers will use the devices in WiFi mode at home or work, bypassing (not off-loading) the mobile operator.
MWC’s free WiFi didn’t work most of the time, 3G data was painfully slow, voice barely intelligible. I must be using Skype too much these days and getting used to HD Voice. SMS was the only service that worked. MWC is the industry showcase to the world, let’s get the basics working at the show.
Dear AT&T, your joke SMSs that inform me 1MB of data costs $20 every time I land in a country has become quite old. Seriously, why don’t you use those triggers to make me an offer that is fair and reasonable, rather than as a reminder that you still think you’re a monopoly.
Nokia feature phones were impressive. The Nokia 808 with a 41Mpixel camera will differentiate itself from the pack for those who only care about numbers not picture quality. Some were claiming Nokia has turned the corner, I think its still wait and see, it’s the market that will decide.
Joyn, the implementation of RCSe/RCS5, was launched at the event. Let’s make it clear, Joyn is not about new revenues, its about remaining relevant as a communication service provider. Think of it like embedding an iMessage/Facetime experience in call path of most phones. Yes its late, it took too long to be defined, it was designed by a standards committee which makes it too complex, detached from reality, and increases its chances of failure. But with Joyn I’ll potentially be able to HD call, video share, and do it with anyone that’s also has a Joyn enabled phone (likely hit 50% of mobile phone users within 3 years) and is data connected. It breaks the silos of Apple, Viber, WhatsApp, etc. Its the operators’ last best chance at remaining relevant. Its not perfect, but we need to give it our best shot. The US should just adopt the current specs, instead of wasting time on pointless standards horse-trading. Seriously, AT&T, Verizon, Rogers: just swallow your pride, stop causing complexity and wasting time we can not afford to waste.
HetNet (Heterogeneous Networks) were one of the main themes. However, there was an inadequate story on loss of security once handsets switch over to WiFi. Small cells: for the fixed network guys also know as Fiber to the Kerb (Curb) is the most expensive access network architecture you can choose from a Total Cost of Ownership. I think the mobile network guys need to talk with the fixed network guys and understand the economics better of the architecture’s they’re considering.
IMS deployments are ramping-up, I’ll be reviewing this in the update on the IMS Status Report coming out in a few weeks. By the end of 2012 over one quarter of operators will have IMS deployed.
HD Voice is finally getting into devices with the Nokia Lumia 610, Huawei Ascend D Quad, ZTE Era, HTC One X and the Sony Xperia all supporting HD Voice.
Policy Control and Charging has hit mainstream. There is confusion in the market as there are several approaches to the market. I’ll be reviewing this in the workshop I’m giving on PCC in April. I’ll provide a preview of that in a later weblog article. Notably, Oracle and Comptel are advancing the story on PCC through the addition of business intelligence, customer context, and near real time decisions. Just imagine receiving an apology from the operator when your call drops and the minutes being doubly reimbursed. Or rather than AT&T sending the joke SMS of 1MB costing $20 for the 100th time, actually sending a fair and reasonable offer.
Mobile Payments remains a theme, its a bit like the previous theme of mobile advertising until operators discovered they’d lost the market. There are existing well-developed payment services for merchants. Operators offering a mobile-only payment API to developers only demonstrated they don’t understand the market. Merchants want all payment mechanisms covered by the payment service and they expect a fair fee (0-5% depending on the mechanism not 20%). There were many announcements at the show including Orange and Visa and Ericsson and Western Union; but again the bankers’ consensus opinion was operators are only going to see a small share of the business.
Mozilla announced a web-based smartphone, which is interesting, but its all about the ecosystem. So Mozilla needs to address that issue before it has any credibility.
Concern remains on impact of Google buying Motorola on the Android ecosystem. The German ruling in favor of Apple on the Motorola patents, with any appeal being deferred for one year, is claimed by some to put the whole acquisition in question. The Motorola acquisition continues to weaken the Android ecosystem.
Deutsche Telekom’s CEO Rene Obermann made a claim that the Cloud will save them. No it won’t, that’s just a stupid claim that technology can save them. Unless operators deliver compelling services to individuals and business solutions to enterprises on fair and reasonable terms customers will continue to flock to the competition.
Telefonica Digital were demonstrating their over the top ‘Viber / Whatsapp – like’ communications service which they built themselves. Its cool, slick, with an interesting business model that clearly demonstrates some mobile operators are managing the transition into middle age better than others. I’ve reviewed previously how Telecom Italia’s over the top video on demand service CuboVision achieved success once they fully adopted OTT principles and became just an app on connected TVs. Operators adopting OTT is not new, AT&T offered OTT voice with a service called Callvantage over 10 years ago.
Ones to Watch:
- Solaiemes are doing RCSe/RCS5 the right way, demonstrating a great range of capabilities and innovations enabled through its gateway.
- Voxeo Labs, a leader in WebRTC (Real Time Communications), makes every browser an endpoint for communications. Operat
ors need a leadership position in this technology, else the revenue decline will accelerate.
- Apigee will become BIG, they shared their vision and its impressive. I’ll review later how Apigee, Aepona, Voxeo, Mobicents, Twilio etc. fit together as there’s significant confusion amongst operators.
- Wadaro just keeps building on their solution that enabled operators to know what customers are actually experiencing, its based on a SIM app (a critical and under-utilized piece of operator competitive differentiation). This should be part of every CEM (Customer Experience Management) solution.
- Apex has created some slick innovations in video comms, making it a must-have service for operators deploying LTE.
- Aonta has made conferencing just software, transforming the price points, flexibility, and extensibility of conferencing.
Attendance was up 11% at 67k visitors, its a pity little if any of that increase was operators. GSMA needs to focus on its charter, it’s there for its members, not itself, and should refocus MWC on helping the industry successfully manage the transition into middle age. MWC needs to change.