MWC 2019 Review

Azenby joined the swarms and throngs at this year’s MWC just to see what’s new and different but most of all, so that we could share with you the view through the Azenby prism on what may be shaping our industry in 2019 and beyond.

As is the tradition these days, the GSMA had a theme for the show and this year it was ‘Intelligent Connectivity’ – with a large dose of AI in the interpretation of “Intelligent”. Always up for a challenge and being a loyal MWC technologist, our intrepid reporters signed up for Breez, the automated entrance process/facility leveraging intelligent Facial Recognition, only to be told on arrival to go through the turnstiles with manual inspection of passes because it would take less time! An early fail for AI but it did redeem itself later in the week.

It did get us thinking about the mobile industry embrace of AI, VR, IoT and of course Intelligent Connectivity and that perfection in one part of the delivery chain is not enough. The entire ecosystem needs to move in step to create joined-up solutions that work. It’s the overall end to end customer experience that matters, not how clever parts of the technology may be. At Azenby we wonder if this nettle is being grasped.

With Intelligent Connectivity comes the need for new security measures and customer protection of data and the integrity of the services being offered. So, Cybersecurity was a big deal at the Congress for two reasons: Firstly people talk a lot about it, and secondly it was the elephant in the room. At Azenby we like to think we are good at spotting these elephants! Mind you, we’ve had security scares on mobiles over the years: Remember all the antivirus products over the years?

Firstly, the open discussion. Virtualisation and additional forms of sharing (be it slicing or multi-tenancy etc) in 5G was always going to shine a light on the inherently higher security risks of adopting new technologies. This, we are glad to say, is well recognised in the industry even though coherent and easily deployable solutions still seem to be out of reach but at least it is the subject of much debate. Part of the challenge is that in the mobile world we always seem to want to ensure backward compatibility with each new generation and thus we tend to stretch legacy security methods to work with new technologies instead of starting from a clean sheet.

Then the aspect that people didn’t want to talk about and that was the industrial wars being fought between the USA and China, and how Chinese vendors are very much in the cross fire, or more accurately in the cross-hairs of the US administration. There were also rumours that the EU is also pulling together a European position on the use of Chinese manufactured equipment in critical national infrastructure. MNOs face a dilemma: Pressure from regulators is growing and talk of ripping out installed equipment intensifies. This is not cheap and the thought of reduced competition from vendors is not appealing to operators. Make it safe please seems to be the preferred option.

All this remained off the main agenda, perhaps with the GSMA wary of upsetting the main sponsor of the event. That is until Huawei themselves decided to tackle the elephant by the tusks and come out with all guns blazing. It must be said from the outset that this is most un-Huawei like, who much prefer to talk about their leading technology and leave the politics to the after-dinner conversations in the restaurants of Barcelona.

Step up to the microphone the Senior Huawei exec Guo Ping, who gave the first truly memorable key note speech at MWC and made the news pages of the world’s press. “Prism, prism on the wall, who is the must untrustworthy of them all?” Wow, a stinging attack on the US administration followed. Snowden comes back to haunt the US once more and is used in evidence by Huawei. Incredible stuff. Not surprisingly, Huawei said once again that it never has and never will plant back doors in its equipment. So there, now we know. But of course, we are none the wiser and at Azenby we tend to think that Nick Read from Vodafone is on the money when he says we need a fact-based discussion and if intelligence agencies really do have a smoking gun, let’s see it. At Azenby we do wonder if from a US perspective its one set of rules for social media giants who have a footloose and fancy-free approach to people’s privacy and a different set of rules for Telco’s, Service Providers and their suppliers. Protectionism seems to be a bigger driver of the arguments than espionage.

Let’s get back to the show’s theme of Intelligent Connectivity, the show floor was once again home to the motor industry, but it was nice to see some trucks this year. There was plenty to be seen on homes, planes, robots, hospitals, agriculture, transport, and even the odd equipment vendor if you looked hard enough. The GSMA is always keen to broaden the base of the show and this year we had the International Olympic Committee participating for the first time along with Formula 1 racing and even the World Wrestling Entertainment were in the ring. Picking through some of the highlights off-piste we learnt that BMW and Daimler are investing €1bn so that we don’t have to own motor vehicles in the future. We like the sound of that! Only for the brave was a demonstration of 5G assisted surgery as a gastrointestinal consultant in a distant hospital advised a team of surgeons who were carrying out an operation in the Fira, over a 5G link. Whatever one may feel about the need for low latency in driver-less cars, I am now all for ultra-low latency when I am lying on the operating table with a surgeon waiting for the next page to download on his tablet! Our gut feel, excuse the pun, is to wait for the technology to prove itself first!

What about 5G? Surely that’s what we all wanted to know about. The headline grabbing announcements did come from 5G phone vendors and that was reassuring to see at congress. The big splashes were the folding screens from both Huawei and Samsung and Xiaomi unveiled a device at MWC for the first time. At Azenby we have been saying 5G doesn’t arrive until the devices do and maybe, just maybe, they may be in the shops this year. The other thing that is on the critical path is Release 16. Please!

Could 5G be the first generation of technology when the devices are ready before the networks? No operator took the opportunity of MWC to announce a 5G launch date. Lots of trials yes, but commercial launches, no. We had differing opinions on 5G depending on where the speaker sits in the eco system and perhaps a bit of vested interest speaking as well. Chuck Robins at Cisco said that for the first time, a new generation – 5G – was going to live up to its hype. Rich Williams from Groupon was very much on the other side of the fence and he said he didn’t know what it was for and what 5G would bring that 4G didn’t do already, albeit maybe faster. Mike Fries from Liberty said 5G is far too expensive to roll-out (to rapturous applause from the gathered MNOs) and Nokia CTO Henry Tirri said MNOs are fixated on the consumer market and that it is the industrial sectors where 2x and 3x revenues lie (to pay for 5G). So, there you have it, take your pick on 5G! At Azenby we do have some sympathy with the view that MNOs are in their comfort zone with consumer products and have long struggled to find the way to make mobile work in other industry segments. Many say that this is exactly what they have to do with 5G, or it will indeed be no more than a faster, slightly costlier version of 4G.

Our view at Azenby is that 5G must be the catalyst from MNOs to drive a paradigm shift in mobile use cases. It has to be much more than gaming (which we are sure is quite a lucrative sector for some businesses) but new verticals in digital health, remote medicine, smart factories and warehouses in addition to smart cities and cars need to be created. The list could be endless, but someone has to take the driving seat to make sure these new frontiers are conquered, and this means MNOs must step out of the comfort zone. Its not about waiting and hoping for a killer 5G App to come along, its about going where no MNO has gone before.

Other things that stood out for us at MWC this year, apart from inflated hotel costs, and restaurant bills, the absence of Mr Zuckerberg and the banning of UBER:

Security again (not the Huawei issue)

We read and heard quite a bit of concern over security in general in the 5G world of the future. It’s not really a 5G question as such but applies to the whole IOT eco system, and even the inherent security of 5G. We see it something like this: IOT brings new types of devices which are unlike the conventional handsets/terminals we know and love today. IOT devices have many different functions, they are smart but not smart enough. This is partly because they need to be cheap and therefore lack the smartness which requires more computer power typically found in smartphones. Therein lies their vulnerability.

Whose Spectrum?

At Azenby, we know only too well the complexities and the high costs of rolling out a new technology. Consumers do appreciate the better service that new technologies bring but are not so keen to pay more for it. It’s a double whammy for MNOs to grapple with. Really, it’s a triple whammy because with each new technology and with growing customer use of smartphones in particular, comes the need for more spectrum. Spectrum doesn’t come cheap.

Regulators the world over demand MNOs speed up the roll-out of new technology but also want to fill the treasury with spectrum fees.  This allows MNOs to complain loudly about the cost of deploying 5G and to ask governments and local authorities to share the burden or, at least, make life easier for deployment. On the other hand, they also still argue that MNOs should be the only licensed spectrum holders. It does sound like defending roaming rates all over again. In the US, some carriers are trying to resist the unlicensed use of CBRS frequencies.

Perhaps the time is right for lighter regulation and more shared and fragmented/regional use of spectrum. Rather than seeing Spectrum as a barrier to entry for new market entrants, MNOs should do as we have said previously and look for new business models and competition which will outweigh the undeniable inherent efficiency of having large contiguous blocks used by one owner.

Revenue Hunting

Over the years, the GSMA have updated their estimation of the value the mobile business world-wide and increasingly we have heard MNOs saying that not enough of the growth is going to them as opposed to the new boys on the block. At Azenby we are clear about the reasons for lack of real MNO revenue growth as we mention above, it’s the failure to break free from the consumer market. MNOs can’t think beyond ‘price plans.’

Let’s face it, MNOs have historically treated the Business segment as though it was just a few more price plans designed for SOHO, SME, LME etc plus a dedicated sales team. We don’t want to be over critical because the available technologies did not give them enough tools to do much more, especially, for mobile-only players. That is about to change however for those MNOs able to embrace the diversity both in technology enablers and new business models, especially allowing for new-breed players (e.g. regional or vertical specialists) and finding ways to coexist and even cooperate with them.

Can they be brave and allow Private LTE/5G (with unlicensed spectrum or within licensed spectrum but with slicing etc) enabling Enterprise to improve its productivity and efficiency? Can MNOs stop being so being consumer-centric and start thinking that they are an ‘enabler’ for Enterprises in new ways they have not practised before. If MNOs need some help with this transition, maybe they have an ally in Nokia who were very clear that “Private 5G for Enterprise using unlicensed spectrum” is part of their 5G strategy.

And finally

Every year the portion of the floor area occupied by non-conventional exhibitors (i.e. not MNOs and equipment vendors) is increasing. We noticed a step change this year. Space vacated by big Telco’s, who are either reducing their footprint and some even not taking a stand/pavilion anymore but just using meeting rooms, is being taken up by the new breed of exhibitors from a wide range of different industries. How much longer will this be the Mobile World Congress we wonder.

If you would like to comment on the view of MWC through the Azenby prism or tell us about what you felt was new and interesting this year, why not get in touch and leave us your comments in the box below.

 

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