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Straight Talk Telecoms

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Gone are the days when you could predict – with a fair degree of confidence – what the top two or three trends were going to be at Mobile World Congress.

The event has morphed into such a broad-based, back-slapping TMT jamboree – albeit one in which telecoms, and mobile telecoms in particular, has a somewhat exalted presence – that everyone attending will return home with a different list of highlights based on the meetings they set up, the stands they visited, and the conference sessions they attended.

Nevertheless, using the event to better understand current thinking around how to best address specific opportunities and challenges is certainly achievable. And this is precisely what Ovum’s 14-strong analyst team will be doing in Barcelona later this month.

Here are five themes we’ll be exploring at this year’s MWC.

Leveraging video

Whether telecoms operators like it or not, they have become video distribution networks. But can they be smart video pipes rather than dumb ones? Operators are pursuing a number of strategies, from acquiring or producing their own content to developing B2B propositions for broadcasters and OTT video providers.

Rather than having content providers go over the top, building intelligence and storage capabilities to run on telecoms networks, operators want to develop this capacity themselves and resell it to media firms.

Ad technology will have more prominence at MWC this year than previously. We will be looking for examples of mobile video ad technology that integrates well with TV and online ad infrastructure. From an operator perspective, Verizon’s acquisition of AOL and its launch of an ad-funded mobile video service have brought some renewed belief within the operator community in ad-funded business models.

We can expect to see new partnerships between OTT video providers and mobile operators at MWC despite the furore in the US about the legality of operators zero-rating video content.

The vanishing SIM card

The GSMA, the trade body that owns Mobile World Congress, is working with mobile operators and SIM card vendors to finalize specifications for the launch of an e-SIM. This has been designed specifically for the Internet of Things (IoT) in an effort to make it easier for device vendors to distribute, activate, and manage their connected devices. Rather than buying SIM cards for each individual country in which the device will be sold – or tolerating high roaming fees – the e-SIM allows the vendor to ship its devices anywhere in the world and connect to the local network (and pay local wholesale prices).

But operators are concerned that if the e-SIM makes its way into the smartphone, it could disrupt the operator business, and more specifically the roaming market.

The development of the e-SIM, and the commitment to developing low-powered IoT networks, is giving mobile operators renewed confidence that they can dominate and add value to IoT connectivity. This will be a major theme on the exhibition floor. But behind closed doors discussions will focus more on whether the operator community can restrict the e-SIM to secondary (IoT) devices.

Think B2B, think industries

Ericsson first launched the concept of the networked society nearly five years ago. Since then the telecoms industry (both service providers and vendors) has embraced the concept of developing vertical market strategies and services. The enthusiasm for M2M, IoT, and ICT services has only strengthened the resolve to build vertical propositions.

However, the process of building vertical teams, expertise, and offers has taken longer than expected. Only in the past couple of years have service providers come to understand that they need to focus on just two or three vertical markets rather than mapping out the whole B2B sector.

The telecoms industry has also had to wait for industries themselves to understand the potential benefits of digitization and the value of connectivity in enabling digital processes.

At MWC this year we will see specific examples, case studies, and solutions for a range of different industries. The growing interest in IoT has brought manufacturing to the fore, but utilities, transportation, and healthcare will also feature on the exhibition floor.

Defining the limits and boundaries of 5G

The 5G story is developing differently from previous mobile technology generations. Indeed, the potential to deliver faster speeds – the key attributes of 3G and 4G – has almost been forgotten in the headlong rush to IoT.

We expect to see the 5G label being applied to a whole range of new technologies and initiatives on display in Barcelona. Transformation, network virtualization, and IoT connectivity will all come under the 5G umbrella.

However, our analysts will be asking some of the more difficult questions in a bid to understand and validate the 5G business case. While virtual reality demos will be an entertaining diversion for weary delegates, it is not at all clear that 5G will have the capability to support VR (and why would you need 5G in your living room anyway?). When it comes to mission-critical communications, 5G also needs to show significant reliability gains over previous generations.

We will also be looking to build a clearer picture of emerging low-powered IoT network technologies. Events like MWC are crucial for initiatives such as Sigfox and LoRa that are looking to secure operator support before rival solutions built on LTE and 5G come to market.

The platform business model

Developing a platform business similar to those of the large Internet companies has become an obsession for the telecoms operator community.

Ovum expects to see two sets of initiatives around platforms at this year’s event. The first relates specifically to network virtualization and technologies such as SDN and NFV. Concepts such as APIs, developer ecosystems, and innovation more broadly – the key ingredients of software platforms – are central to the network virtualization business case.

The second set of initiatives relates to platform ventures that we expect some operators to launch at MWC. These will be for specific services and sectors, principally in the B2B space.

Straight Talk is a weekly briefing from the desk of the Chief Research Officer. To receive this newsletter by email, please contact us.

We’re looking forward to this year’s Mobile World Congress. I’ll be joined by a team of 13 analysts heading to Barcelona February 22–25. If you’d like to brief me or a colleague, email with the name of the analyst you’d like to meet, along with the topic you’re interested in. We’ll then be in touch to confirm. With just two weeks before the big event, watch out for more Ovum news this week on an important milestone for global mobile penetration.

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