Mobile World Congress 2010 Summary

Entry through Barcelona airport was strange this year, no queue at immigration, no queue for the taxi, and there were even a couple of spare seats on the plane. This uncrowded entry was in line with the number of people letting me know they were not attending this year.  Many western European operators had only 2 to 5 people attending when in the past it would have been 50 or so, and American operators remain notably absent except for a few senior execs.  Its the impact of operator cost controls and many suppliers cutting marketing budgets to focus on regional rather than global events.  Though, with that said, there was good operator attendance from Middle East, Eastern Europe, APAC (those countries not celebrating Chinese New Year, as a festival think of it like the western Christmas and New Year combined then doubled) and LATAM.  This re-disribution of operator attendance calls into question whether MWC should permanently reside in Europe.  Compared to last year, attendee numbers were up by perhaps 10%, most of my customers were happy with traffic to their stands by the end of Wednesday.

But back to my entry into Barcelona, the experience at the airport contrasted to a city organized fun-run that closed the roads into the city.  There were some heated discussions between the taxi drivers and guards stopping their entry, which the snow shower didn’t cool down (that’s right, snow in Barcelona).  Sunday-Wednesday were cool (compared to NJ it was warm) and overcast, but the sun did finally come out on Wednesday afternoon.  Last year in a discussion with a local policeman to report with a friend his stolen bag, the policeman revealed that thefts are tolerated by the locals because the thieves only target visitors, this avoids it becoming a political issue.  I pass no comment on the rule of law being a ‘political’ issue.  His advice was to look like a local to avoid being targeted.  Its a sad indication on Barcelona that I consider MWC the most dangerous conference I attend, a view shared by attendees from many other parts of the world.  But with that said, MWC remains the only conference I must-attend every year.

Getting down to the meat of what happened at the show…

WAC (Wholesale Application Community – not Committee) was the biggest news of the conference, its 5 years late, but at least the fragmentation issues are being tackled.  24 operators have signed up to create an application warehouse including América Móvil, AT&T, Bharti Airtel, China Mobile, China Unicom, Deutsche Telekom, KT, Mobilkom austria group, MTN Group, NTT DoCoMo, Orange, Orascom Telecom, Softbank Mobile, Telecom Italia, Telefónica, Telenor Group, TeliaSonera, SingTel, SK Telecom, Sprint, Verizon Wireless, VimpelCom, Vodafone and Wind.  Together, these operators have access to over three billion customers around the world. The GSMA and three device manufacturers (LG Electronics, Samsung and Sony Ericsson) also support this initiative.  The release looks like it was done in a rush, so there are many more questions than answers, some of my views on the announcement include:

  • Enables operators to efficiently fill the crapp-store part of their inventory.  That is copy the apps in the Apple Store which are racing to zero price.  This is a key point, Apple is a CE (Consumer Electronics) manufacturer so does not care about the profitability of its app store (iTunes is different); Apple cares about selling more devices.  I use the term crapp-store as the margin generated for operators is likely to be low to negative, however there’s lots of customer value –  especially those free apps.
  • Enables operator developer community / open innovation programs to focus on the ‘fat middle’ of services that use and differentiate their network compared to OTT (Over The Top) services; and focus on partners as well as app developers, e.g. enterprises, local content, local system integrators, local authorities, etc.
  • Enables the industry to focus on specific platforms and form factors, e.g. Java, Symbian, Android, to minimize fragmentation.
  • Endorses OneAPI and BONDI as the supported network and device APIs.
  • JIL has joined WAC, perhaps they realized the error of their ways in their widget obsession?
  • Must start with a 70:30 revenue split as per other stores, with a business plan that can support 80:20.
  • Must have a common ingestion process into a warehouse that allows developers to select the operators; and the app just goes into those stores.  No ifs, ands, or buts.
  • Must support updates, this is very important, updates show the customers they’re continuously loved and reminds them of their applications; but sensible limits should be applied, e.g. max update of once per month.
  • Operators must sort out the confusion WAC generates with their development / open innovation programs.  Each operator should state clearly the focus given WAC, they still need both if they want to innovate.  WAC will help fill the crapp-store, and depending on its focus enable innovations from other markets to be available to all.  
  • Operators must focus on creating a compelling store front across the handset, web, STB (Set Top Box), CSR (Customer Service Rep), and retail stores.  And build an engaged customer base for that store.  Store must including search, rating and community features to make finding apps / services as easy as the web, and critically ensure adequate performance of store – some browser based solutions may struggle.  
  • In the limit there will be as many ‘apps’ as their are web sites, web games and web services, its all just the internet not the “mobile internet.”  I’ll do an article on the evils of the investment house analysts creating the contrived category of the Mobile Internet soon, it is their attempt to continue to steal money from our retirement accounts.
  • WAC must be more than widgets (a current obsession of some operators).  A widget running on a widget engine in a browser on a mobile OS has significant  limitations in performance compared to a native app.  Operators need to be very careful in not focusing on technology, user experience is orders of magnitude more important.  Apple has a highly optimized proprietary stack, so just choosing ‘widgets’ will not give an Apple-like experience.
  • I currently put WAC’s chances of success at 20%, JIL I had down at 5%.  Once operators start to announce how WAC works with their open innovation programs, we understand better WAC’s focus, and operators better understand the difference between the ‘crapp store’ and their ‘network services store’ (apps/services that use their network and make money for them) I’ll revise the chances.

Set against the WAC fragmentation reduction opportunity we have increasing OS fragmentation: Bada from Samsung, MeeTo (sorry MeeGo the Nokia/Intel OS) and Windows Phone 7 Series.  Hopefully WAC can help focus this fragmentation.  Windows 7 now looks like a 2 year old mobile OS with the inclusion of some community aggregation features and a rather ‘square’ looking start screen.  As its not available until the end of the year it will only be 3 years behind the pack at launch.  In playing with many of the devices at the show, it still looks like functionality is being pushed in preference to performance, e.g. app switch times, time to fire up the browser, and importantly scrolling through the address book all feel a slightly sluggish compared to my acid test of the good-old Nokia 6310i address book experience.

Ericsson came late to the table with its app store – that’s so ‘last year.’  Ericsson Mobility World, sorry Developer Connection, is a great way to waste a developers’ time.  To be relevant, the store must have direct access to an engaged customer base; sitting in a demo lab is of little value.

Applications / Services I’d like to highlight that operators should
have deployed last year include:
HomeCamera – world’s easiest to use home surveillance service;
Dial2do – voice control to text, tweet, or conference;
4dk – context aware communications;
Aonta – next generation software based conferencing; and
hSenid – customer created VAS.

All of the above services use the operators’ networks, they need the operator to be the trusted agent, and will make significant margin for operators, rather than the ‘race to zero’ crapp store.  Open Innovation is about enabling operators to launch tens/hundreds of these services per year by working directly with these companies who obsess about their services.  Operators should really only be wasting one or two junior engineers’ time on having one hundred thousand bookmarks (sorry widgets) in a store.

During Eric Schmidt’s speech there was some churlish questions, Google is entitled to compete in whatever markets it chooses using all available legal means, though its been quite naughty with Buzz and EPIC will sort them out.  The industry must realize Google’s model is not aligned to the end users’ best interests as Google’s customers are the advertisers and they will pass that information to whomever will pay.  As scams get more sophisticated people will realize the risks of being a ‘means to an end,’ rather than an ‘end in itself,’ and the Buzz incident is just one small example.  Telcos must focus on how to remain the trusted agent for their customers in this emerging web 3.0 world, rather than stamping their feet in front of a great competitor that forces us to step up our game.

Congratulation to Huawei for winning the Best Service Delivery Platform at the GSMA awards, as the global SDP (Service Delivery Platform) supplier to Telefonica group this is great endorsement by the industry.  Congratulation to Ecrio for winning the best RCS (Rich Communications Client) mobile client and second place in the PC client; and congrats to WIT software for the best PC RCS client.

At the NEPs (Network Equipment Provider) stands LTE, femtocell, mobile advertising, WiMAX, and IMS were still being talked about, and the problems were again being swept under the carpet.  Such an approach does not move the industry forward.

Some of the BOSS (Business and Operational Support Systems) vendors appear to be moving away from the scary-complex TMF architecture and putting a customer centric model in its place.  That is lining up telco operations around the value delivered to the customer, rather than continuing to fuel the IT and Network Operations internal war.  All Telco CEOs should but network ops and IT under the CIO as its all just “software running on servers”, including the switches, messaging gateways and many other network elements.  This bring me back to Google, they understand that in the limit costs of operations will be dominated by the data center.  Operators should compare their data center economics to Google’s (‘Gloud’ economics) as in the limit they’re both service providers with software running on servers.

On industry sentiment: optimism is up, but the skies are not blue, clouds still linger.  There’s a tiredness from many of the large organizations as further consolidation / downsizing is inevitable. Yet there’s still much dynamism from the small and medium companies that are the factories of service innovation for this industry and which operators need to work with much more closely to capture that energy, rather than crushing it through a strategic supplier.  Hence why an open innovation program remains critical – props to Jose Vallez for what he’s doing on open Innovation with Open Telefonica.

Overall, I think MWC is a global show in transition.  Devices are really now the focus of CES (Consumer Electronics Show), the crapp store is a passing fad, this is not the right location / forum to engage the web development community.  The core of MWC is the mobile network, its operations, and the gap is a serious focus on the services that use the network.  There should be halls dedicated to Enterprise, M2M, Smart Grids, Telemedicine, Green networks, Open Innovation, etc.  Where not just the suppliers to mobile operators, but the other ecosystems members are there.  Mobile is no longer an ecosystem to itself, to survive it must work with other ecosystems.  It must not impose self-focused standards, but work together with those ecosystem.  Just like Canoe Ventures is working between the cable and advertising industry in the US for targeted advertising.  And serious consideration should be given to a new location given the shift in operator attendance away from Europe.

As a final note, around the show and outside in the hotels (because its cheaper than being in the show), there were lots of incremental innovations taking place in mobile backhaul congestion mitigation; the tying together of operators’ channels across web, physical stores, devices and CSR in selling services; low energy technologies; batteries; cloud services; well thought through on-device store experiences; and cute user interaction technology. This time next year it looks like we’ll finally be able to point to specific operators who are making the necessary first steps in remaining their customers’ trusted agent and service provider. Keep an eye on what operators are doing in India, Canada, Nordics, Singapore and possibly the UK.