The Xona Partners team was at Mobile World Congress and compiled a set of takeaways focusing on industry trends (link). Here, I wanted to add some personal observations on MWC 2018 which is a good barometer of the state on the wireless industry. But I don’t think you can judge based on the size of the event. Rather, it’s the many other signals that tell the story. This year comes in the midst of a slump in network solution revenues and a wave of consolidation of ecosystem players. The event shows how different companies deal with economic reality and an industry-wide transformation that’s reshaping the competitive landscape.
It’s all about 5G
This is the first year that 5G completely dominated the show. There are two messages in this: first, LTE took its course and no major upgrades are highlights as gigabit LTE was in prior years; and second, struggling vendors are pinning their hope on 5G to turn a corner. Nevertheless, the main challenge for 5G remains one of finances: who will pay for it? This caution came from a range of operators including KT and Vodafone. In all, we have a zero sum game and expect predatory pricing practices that will further drain vendors.
The “real” 5G
The emerging trinity of 5G use cases is converging on fixed application in the US, mobile application in Korea and Japan and massive IoT in China. Deployments timelines and scale to follow that order. A look at the spectrum conditions, in particular the availability of the 3.3 – 4.2 GHz band, sheds light on future evolution. A note: massive IoT threatens the LTE-M and NB-IoT markets where progress in network launches awaits a ramp in revenues. This is a classic cascading technology trap.
The “other” 5G
I found this on Apple’s support site explaining the technology icon on the iPhone: “4G can also indicate a UMTS connection on some GSM networks, including AT&T’s and T-Mobile’s high-speed network in the United States.” 5G provides even more leeway for operators to claim 5G services. I am looking forward to see how US operators will define 5G to fulfill their public commitments. We’re in for more creative marketing than innovative technology!
OTTs and Verticals
There were no keynotes this year by the likes Google and Facebook. Vertical market players such as automotive companies had smaller presence. On the other hand, technologies such as edge computing and network slicing were widely on display. For the telcos to play in vertical markets and to better compete with OTTs, network virtualization is fundamental. Edge computing, network slicing and other technologies provide decisive differentiation. The large operators are stepping up to the challenge, but a gap is widening with the smaller, regional operators. The complex dynamics are beyond what I intend to cover here, but this is an area that will be critical to determining the winners and losers in a massive transformation that’s underway.
AI and Blockchains Hype
Both of these were built as themes of the event, but there was little on AI and nothing on blockchains. As the industry looks for higher efficiency, it’s a matter of time before it incorporates AI solutions. The challenge remains how to build AI expertise. As for blockchains, I think it will be led from the peripherals, or even outside the industry, and for the purpose of finding alternative business models to supply capacity.
A final thought
A common practice among big companies is to force visitors change lanyards as they come into their booths. I heard some good excuses for this, like identifying trespassers(!), and bad ones like hurting the feeling of a CEO! I did not know that the industry has so many touchy-feely CEOs!