MWC2013: The Mobile Dichotomy, Net-Head versus Cust-Head

The overall feel of MWC (Mobile World Congress) this year is upbeat.  More people attending, up from 67k to 72k.  The money being spent on LTE (Long Term Evolution) is starting to percolate through the industry, and later this year LTE-A (Advanced) as Telstra and several other operators announced.  In these articles from 2008 and 2011 I highlighted the likely evolution of LTE and that operators could skip LTE and move directly from HSPA+ to LTE-A, which some are now planning, and that’s about it on the network provider (Net-Head) side of the conference in this article.  The focus of the rest of the article will be on the service provider / customer-centric side (Cust-Head) as the focus must be firstly the customer and then services, not the other way around.  Being a network provider and being a service provider are two quite different businesses in a competitive market.  Back when customers had little choice and it was simply voice, messaging and a little bit of data we could muddle through, however, today the world is different.  And that is the fundamental challenge we face as an industry to “know thyself” as the ancient Greek aphorism goes.  We’re an industry with a split personality, a Net-Head and a Cust-Head, and as with sufferers of Multiple Identity Disorder we don’t realize it, just find ourselves in dysfunctional situations.

The new location is designed for several conferences not one large conference, from Hall 1 to Hall 8 is over one kilometer.   I spent more time walking than talking, but as discussed in previous MWC reviews the BSMA (sorry I mean the GSMA as I’ve been told the other acronym offends some people) does not consider the attendees’ safety or convenience a concern.  Most vendors found their 30 min slots that worked in the old location resulted in 5-10 minute meetings with customers, they only got 30 minute meetings with one hour slots.  Agency reception staff appeared to be used at some of the stands that impeded meetings happening, sorry ALU and Deustche Telekom but you jointly win the prize for the most obstructive reception, Oracle wins for the best reception staff (they were employees).  So onto the findings from the conference.

The main conclusions and concerns I took away from the event were:

  • Most of the booths are talking about the past rather than the future, from a services perspective.  An immediate reaction to that statement will be the usual marketing drivel on NFC (it’s how some people entered the event), M2M (there was a connected city), smart-everything, Internet of vendor or service provider silos, etc.
  • There were some glimpses of the future in amongst the noise, which I hope reach the market and are not messed up by the industry’s split personality.
  • My  main concern coming from the conference is the detachment of some of the GSMA initiatives from the reality experienced by the coal-face of operators.  It is important to point out the GSMA has a Telco board, which funds and directs the GSMA.  So is the detachment really between the telcos’ CxOs and the telcos’ coal-face?  If this is the case then this should be a serious concern for shareholders as its an ominous sign that usually precedes a nasty surprise in results.

Compared to CES (Consumer Electronics Show) in Las Vegas there was a smaller range of devices, which is to be expected given the filter of the device requiring an expensive mobile network modem.  Such an arbitrary technology divide from a solution/consumer perspective does raise an issue on whether MWC can remain solely ‘mobile’ focused, it’s a converged world after all.  I was only WiFi connected throughout my time in Spain as roaming data rates are extortionate, yes they are less extortionate roaming plans if you’re on an expensive unlimited corporate plan, but most of the world is not and neither am I.  A big thanks to Ericsson for providing the most stable WiFi of the show, they kept me coming back.  Google wasn’t at the show because it doesn’t need to be, most of the people at the show are not developers.  The Android handset vendors had on offer an amazing selection of devices, catering to many tastes, it reminded me of the evolution of mobile phones a couple of decades ago when the devices evolved from bricks to a variety of colors and form factors, e.g. candy bars, clam shells, etc.  The differentiating services on the devices were really just ‘nice to haves’, for example displaying social media through a single app rather than using multiple apps, games, augmented reality, camera features, etc.  The core service value is really the app store.  This is the challenge facing Mozilla, Tizen, Blackberry and Microsoft, “show me the apps”, this problem will lessen over time, but we’re talking years.

The term OTT (Over The Top) is Bell-head thinking.  Skype, Viber, Whatsapp are service providers; who show, thanks to mobile broadband and WiFi, that communications services can be done better.  I was only WiFi connected at the show, yet using Whatsapp with many people and calling using Skype.  For those operators that wish to be service providers they should see them as direct competition.  Talking about cooperation means you’ve decided to become just a network provider, which is fine, but you’d better restructure your business pretty damned quick.  This highlighted the split personality issue, today most network operators want to be service providers, so they must compete by offering customers excellent communication experiences and not confusing and pissing them off with ridiculously complex pricing plans!  It’s like going to a restaurant and being presented with a 1000 page menu of dense text on food options with different pricing depending on which menu item you pick, in what order, with what sides, by how much you order up front versus actually consume, by time of day, by family situation, by payment method, by how full the restaurant is, by what type and how many knives and forks you use, etc.  Only when a customer has no choice can such a restaurant survive.  The industry must start treating customers with respect.  In the conference there were calls by operators for lighter regulations, which is silly when we look pricing complexity and the rip off of mobile data roaming charges and international calling, e.g. my wife was charged $70 for a 20 minute call to Singapore on her mobile phone. Though to be fair I no longer receive the hate SMS from my provider of “Its $20 per MB for roaming data.”

Viber was calling for co-operation with operators, which is understandable as they need to find a business model given they’re currently giving stuff away for free.  If a telco wants to be a service provider they are competition; copy, and copy better by using your network and telco cloud advantages.  Seriously, communications is your core business, pull your finger out and stop waiting on the detached GSMA and detached standards people to sort this out, only you can do it, empower your people!

On the GSMA’s detachment from the reality of the market.  They made a ‘OneAPI Exchange’ announcement. Its not the technology that’s going to make or break this, its the commercials and go to market. How does this relate to the Telefonica/Telenor payment API work? How do the commercials work as a developer? Why are they using the word OneAPI that developers have rejected, and the market has moved on from. The industry and developers do not need just one API, it demonstrated they do not understand the business.  Just look at how bad the GSMA developer page is. Why would a North American based developer go there rather than Tropo or Twilio?  The market has decided and it’s not OneAPI, use it internally in Telcos, but there is no need to talk about it externally.  In the announcement was also the Identity API so customers do not have to log into each app, solving an issue that’s already solved, using something the app providers are not going to use.  Francesco from Informa summed up up quite well, see the second page of his MWC Day 1 report.

NFC was a big theme for the conference with attendees being able to use their NFC capable phones to enter the event.  We’ve had RFID cards, i.e. contactless stored value smart card for making electronic payments such as Oyster and Octopus, since the 90s which do more or less the same thing from a consumer perspective.  The UK Underground said NFC was too slow for them.  In talking to some of those that could experience the technology, its a limited set of phones, the acronym NFG would be more appropriate (which is not what you think) rather stands for ‘Needs a Few Goes.’  The GSMA needs to address why such a mature technology is taking so long to implement and isn’t simply working right given Oyster and Octopus have been operational since the ’90s.  The industry’s innovation process is broken, it needs to get small, light-weight, market led, and keep those professional standards people away from it at all costs.

Another example of the GSMA’s detachment from the reality of the market is Joyn and RCS.  Telcos need to improve the communications experience, else become irrelevant as a communication service provider, to this issue is critical. Would you buy an Audi A6 if it was built exactly the same as the Audi A6 from 20 years ago, given all other cars had improved? Of course not, but that is what we’re expecting customers to do with voice, as up until recently customers had no other choice, but now they do.  Interop does not mean that much to customers, they use multiple services like Skype, Linkedin, Viber, Whatsapp, depending on the context and the person or group, just like we’ve been using multiple web browsers for over a decade.  Those services give great experiences, and all telcos need to do is catch up.  The Joyn logo, business model, technical complexity required in the network, and go-to-market is wrong.  Solaiemes continues to impress me with their RCS APIs embedding RCS across feature phones with a thin client, in CRM interactions, in everyday life, they’re an excellent engineering outfit and would be a bargain at the moment given their importance to future of RCS.

The business model for RCS is simply to maintain existing revenues, telecoms is a $2T market. That is the business case for RCS at a high level, once we get into the details, it depends on the plan the customer is on, many postpay plans can include RCS for ‘free’ it just uses data, while for smaller postpay and prepaid plans incoming could be ‘free’, while outgoing will need to be charged on normal rates.  RCS needs a smaller more entrepreneurial approach like Telefonica TU Me. It reminds me of those big blockbuster movies, like “John Carter”, than have vast sums of money invested, and come out with a OK product, but because of the inflated expectations are perceived to have failed. Perceptions are key, as we saw with the DT “indefinitely postponed miss-translation.”

I think the prize for the worst stand marketing byline goes to  Sony with “make.believe”, which was quite apropo as they announced the PS4 with nothing other than inspirational statements, so their products do appear to be “make believe”, at least for this year.

WebRTC received some attention, with the usual miss-information, the GSMA doesn’t have a position and it was not in the main conference, it should be.  WebRTC just a bit of technology, like APIs.  It’s what you do with it that’s important, e.g. application, business model, and go to market; as discussed in this summary of the What WebRTC means to Telecoms.  And we’ll be discussing these specific issues at the WebRTC pre-conference at the IMS World Forum.

Voxeo Labs were everywhere at the show, Tropo was powering a number of excellent demos on mobile insurance claims and Salesforce.com integration at the Huawei stand, congratulations to Huawei in showing their ability to harness external innovations to deliver exciting innovative services to their Telco customers.  Ameche was being demo’ed at Ericsson’s booth with a beautifully simple in-call voice agent, Ameche was reviewed last year in this article.  For me Voxeo Labs is a beacon to the future of our industry.  It’s about the core service of communications being embedded everywhere; myaNUMBER, Crunched, Tropo.com, AT&T Call Management API, and Telekom Tropo all demonstrate there’s money to be made in communication APIs. AND It’s about services that are unique to owning a network, that run in real time, and in the telecom cloud.  Yet the GSMA didn’t have Voxeo Labs involved in any of their conference events, all I can say is shame on the GSMA when they cannot recognize the critical innovations to the future of our industry.

There was lots of the usual marketing echo-chamber noise on M2M, the money is in Telematics.  And M2M being extended into ereaders and tablets for content delivery to beef up the revenues in a vain attempt to match the hype.  Big Data was another phrase used without clarity, really all it means is a Hadoop cluster, the technology is irrelevant, its all about breaking down the data silos in telcos for a complete customer view.  One to watch is Guavus, I remain impressed with their practical and focused approach that continues to quickly generate good returns for their customers. Instabridge is another one to watch, WiFi Everywhere, I’ll have more on them soon.

One area that I think is underestimated and under-invested compared to M2M, NFC, mHealth, etc. is enterprise mobilization, lots of money is being spent here by enterprises.  The IT guys are leading compared to the Telcos, e.g. HP, IBM, SAP, Accenture.  The question is how do telcos catch up, if at all? Where are you GSMA?

Overall it was an upbeat show, thanks to the investment in LTE, with LTE-A investment on the horizon.  It was great fun to catch up with friends new and old.  However, we have serious issues: an industry with a split personality, the detachment of CxOs/GSMA from the coal-face of the industry.  Please, no more use of the ‘Bell-Head’ term OTT, they’re service providers.  Reset expectations on RCS, get rid of Joyn, re-focus the go to market and business model, start innovating like Telefonica, realize the greatest asset is the network and you can deliver services other service providers cannot because of your network and your in-network (Telco) cloud, “the apps (money) are in the calls”, to paraphrase Voxeo Labs’ tagline for Ameche.

One thought on “MWC2013: The Mobile Dichotomy, Net-Head versus Cust-Head

  1. franciscokattan.com

    Alan, thanks for the great report as usual. Regarding the OneAPI Identity announcement, I can’t help it but think that every MWC the GSMA marketing team feels like they need to rush to announce a seemingly major initiative to defend the relevance of operators in the ecosystem. The same thing happened when WAC was announced out of the blue by 24 operators, many of who had hardly been briefed but felt they needed to be part of the press release. The results speak for themselves.

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