10 observations from Mobile World Congress 2018

A visitor walks past a mobile mast with an Audi lunar exploration vehicle, a simulation of a Vodafone project to install a 4G mobile phone network on the moon in 2019, during the Mobile World Congress in Barcelona, Spain February 28, 2018. Image: Yves Herman/ Reuters

Mobile World Congress 2018 (MWC18) took place in Barcelona this week: The world’s biggest, most brazen and bullish show for all things mobile. With all the talk of Internet of Things (IoT) and fifth generation (5G) network though, strangely I felt that the mobile industry that pioneered at the event, was in danger of becoming a guest in its own living room.  This year more than ever, the show was littered with connected devices: not handsets, but cars, buses, washing machines and drones. There was even a lunar module and accompanying Audi moon rover connected by a 4G, LTE Vodafone network.

In many ways, MWC18 was a hugely empowering event, as it showed more than ever how pervasive has become mobile and wireless technology into almost every part of our lives and the things that make our lives tick.  But strategically the question was evident: what are the telco’s long term role in this? So much looked as if it was going to be handled by technology companies providing data analytics, robotics solutions and artificial intelligence.

Here are my 10 takeaways from this year’s show:
#1: IoT demands a totally new ecosystem yet the telco industry retains an old world perspective on capital investment (into networks) and revenue (from communications): With the quantum of investment needed for 5G, this is not sustainable and either 5G or the sustainability of mobile operators, has to give.

#2: We need a new approach to considering the regulatory and policy paradigms to enable the IoT world: Data, security, cross-border movement and cross-industry solutions are opening up new questions for regulators, as well as uncertainties which are not yet defined.

#3: IoT discussion is dominated by use cases. In advanced markets, only those telecom operators that acquire new capabilities to scale these cases will sustain their profitable existence. At present, I only see three-four operators in the world that are positioning successfully to do this.

#4: 5G doesn't have a clear capital investment or revenue story yet. The next step is for the industry to build 5G use cases, redefine the technology architecture and enabling network to deliver and figure out the cost of implementing this alongside the potential uptake and revenue case.

#5: 5G will happen either through direct build of a whole network (a very few operators may do this) or follow a gradual path of 4G/ LTE Core network + 5G base stations at the edge, followed later with replacing the Core. What is not clear yet, is what the precise difference will be between these alternate paths.

#6: How much mobile data will be processed at the edge of the network versus in the core is not yet well understood.  However, this balance will be key to determining how much capital investment telco operators should be committing to the 5G roll out.

#7: Telco operators have to monetize the provision of low latency connectivity in order to make sure that their IoT and 5G investments actually pay off. If they don’t, then they run the risk of “OTT Phase II”, in other words, investing significant sums of capital into a network which others use for making money from!

#8: Mobile operators in a city could work together to create visualisation of in-city movement for use by transport service providers, OTT navigation services and city authorities.  They are uniquely placed to do this.

#9: After years of hype, the time has come for the mobile operators to settle on their IoT strategic position: do they merely connect services, or provide them?  Those operators that haven't figured their position out yet will be in trouble in 3-5 years' time, as their investment strategies go awry of where their service revenue goes to.

#10: Building on the above point, actually telecom operators have to reassess where they play in the whole new ecosystem that is often referred to as the 4th Industrial Revolution.  This report produced by my team addresses this fundamental question (https://www.strategyand.pwc.com/report/tale-of-two-telcos).

More on some of the themes above in the coming posts.  For now, having taken 59,000 steps in three and a half frenetic days at MWC, it is time for a rest.

The thoughts and opinions shared here are of the author.