As predicted, MWC 2017 so far has showed that digital assistance continues to feature heavily in 2017 device launches, and remain important for network providers, as we saw with Telefonica and the launch of AURA.
Google Assistant is already being preloaded on the new LG G6, HMD's range of Nokia Android phones, and Sony Xperia XZ models. In addition to this, Google Assistant will be made available to all Android Nougat and Marshmallow users, representing about one-third of Android's Google Play installed base (read: excluding China).
But not is all won for Google and its Android partners. Because Google Assistant is only supported by two languages (English and German), its impact as a handset feature is far from global. Apple's Siri, meanwhile, covers more than 20 languages. Some key Android device makers such as Samsung and Huawei have not yet fully embraced Google Assistant and are likely to deploy their own alternatives. Samsung's recent acquisition of AI company Viv is set to come to fruition in time for the launch of the Galaxy S8 on March 29.
To be truly global, digital assistance and its underlying AI engine will need a significant amount of local data and expertise, presenting many opportunities for local service providers to partner with Android device makers.
As mentioned in our report on trends to look out for at MWC 2017, vendors have wasted no time in promoting their pre-5G network developments. Both Samsung and ZTE announced their pre-5G portfolios on Day 0 (i.e. the Sunday) of the Barcelona conference.
Mobile operators need to be wary of such announcements and of announcements from vendors promising pre-5G commercial equipment because compliance with the completed standard is no guarantee.
Samsung promised a 5G home router base station and a networks-wide management system. This technology set will support the vendor's work with US operators on fixed wireless access.
ZTE's announcement – while not as broad as Samsung's – was also very forward looking. In collaboration with Intel, the vendor announced a fully virtualized baseband unit for a pre-5G network. This baseband unit can support both distributed and centralized architectures for the mobile network.
Orange chose MWC 2017 to announce that LTE-M will be deployed for low-power, wide-area (LPWA) IoT across its 4G networks in Europe. It will start with Belgium and Spain this year before moving on to the rest of its European footprint. Other major operators have also announced their backing for LTE-M at MWC 2017: AT&T, KDDI, KPN, NTT DoCoMo, Telefonica, Telstra, Telus, and Verizon are all working to ensure that LTE-M supports roaming and standards-based local service delivery so that both enterprise and customer-oriented IoT objects (such as trackers or wearables) can be designed for worldwide markets. Both moves will significantly stimulate the LTE-M ecosystem.
Orange said that LTE-M could be rapidly deployed via a simple software upgrade to the group's existing global 4G network. Orange already runs an LPWA network in France, using LoRa technology. Unlike LoRa, LTE-M is a fully standardized technology within 3GPP. By backing LTE-M as its main technology for LPWA IoT, Orange has indicated that it sees major advantages for it over non-standardized LPWA, which, unlike LTE-M, also operates in unlicensed spectrum. However, the presence of both Orange and other LoRa supporters KPN and KDDI among the operators backing LTE-M shows that technologies for specific use cases makes sound commercial and strategic sense. How the two technologies will sit side by side as LTE-M gains technological and commercial maturity remains to be seen, as do the prospects of other LPWA technologies such as NB-IoT, which is backed by major operators including Vodafone, Deutsche Telekom, Sonera, and MTN.
Orange is also creating an Open IoT Lab designed to boost the ecosystem around the Mobile Internet of Things. According to Orange, this will be the first of its kind in Europe based on LTE-M technology. It will be launched under the GSMA Mobile IoT Initiative. Orange will launch more LTE-M pilots this year, covering smart electricity metering, to remotely control power consumption in line with users' subscriptions, and wearables, to measure and monitor an individual's movement, positioning, temperature, and other health-related information. Initiatives such as this will help create significant momentum behind LPWA IoT over the course of the year.
Ericsson's partnership with truck maker Scania, which was announced this morning at MWC 2017, reveals a key problem with the Internet of Things. Scania CEO Henrik Henriksson pointed out that a typical truck operates at a load factor of 60% – that is to say, it's 60% full on average, or it's full 60% of the time – and its owner earns an EBITDA margin of about 2%. The cost structure is heavily loaded on the first turn of a wheel, but the cost of the truck, the driver's wages, and the fuel have to be paid for no matter how much payload is in the back.
You'd think the opportunity here would be obvious. If better data visibility could increase the load factor by a third, to 90%, the owner could expect to increase its EBITDA by two-thirds. That's a lot of value. But, from a service provider perspective, it's value that's entirely captured by the customer. Service providers can expect to sell a dribble of connectivity. Perhaps, deep down, this lack of an incentive explains why service providers find it so hard to sell the IoT services. Scania claims almost 90% of its trucks in Europe have a cellular radio, but the question is, how many are actively using it?
The problem here is designing a business model that reduces the barrier to entry for the customer, while aligning the customer's and the service provider's incentives. For example, the customer and the service provider could agree to share in the productivity gain, while the SP finances the project up front. This, however, requires a careful choice of metrics to identify the value created by the IoT application, using advisory and analytical skills SPs tend to lack.
This is all the more pressing in the light of new projects such as Nokia's worldwide IoT network grid and Tata's global MVNO enablement product. These threaten to tear the customer away from the service providers, either directly, as with Nokia, or by supporting new entrants, as with Tata, at the same time as they drive down prices further.
The concept of contextual relevance remains extremely important to any discussion on the future commerce experience, and there is growing acceptance that payment services need to have the flexibility to support a range of different commerce scenarios. Indeed, the focus of innovation from much of the industry is now aimed at providing solutions to address the needs of specific types of merchant. Payments are becoming fit for context.
There have been several noteworthy announcements in this area so far. Mastercard has announced the expansion of its Qkr! service, rolling out in six more markets in 2017. Aimed at the hospitality industry – and restaurants in particular – the app enables customers to place orders and settle and split bills from within the service (paying with the Masterpass wallet). In addition to being made available in Brazil, Canada, Ireland, Singapore, South Africa, and the US, the service will target a range of new use-cases, including school fees, parking, and vending.
IBM and Visa also announced, just prior to MWC 2017, that the Visa Token Service will be made available on IBM's Watson IoT platform. In theory, this will enable developers to build commerce solutions into any future connected device proposition. Although there is some way to go before we see a truly "killer" app in this space, Visa is a strong position.
As Day One of MWC drew to a close, PayPal announced that it had passed the 200 million active customer account mark and that it had more than 50 million customers registered on its OneTouch payment service. Its recent agreement to provide the tokenized credentials behind the operator's NFC wallet is a further sign of its plan to enhance its in-store-payments reach.
As the nature of commerce continues to evolve, delivering payment services that are flexible enough to fit into a range of new and unexpected scenarios will be increasingly important. Tokenization is the solution. Therefore, major players in the payments industry must now focus on ensuring that their token is at the heart of the commerce experience, rather than that of their competitors.
Related content: Retail banking and payments 2017 infographic
Today at MWC, Telefonica launched AURA, the fruit of a long-running project aimed at developing a layer of intelligence interlinking access services, IT systems, products, and services. The AI-based digital assistant will give customers full visibility across Telefonica services, helping them manage their personal information and understand what they share with third-party companies.
AURA will help Telefonica to enhance the overall customer experience and also provide a new platform for selling new services across its footprint. Therefore, the value of AURA will be measured in how effective it is at decreasing churn and improving the rate at which Telefonica upsells services. Telefonica has to make sure that AURA offers a best-in-class user experience and genuinely valuable insights that enhance rather than detract from the customer experience. Enabling users to opt out of any notifications, for example, is a capability Telefonica should consider adding in.
AURA was developed in collaboration with Microsoft, and will be accessible across multiple devices, including smartphones and the Amazon Echo. It is expected to be launched in Spain, the UK, and Germany in the next 12 months.
On Day One of MWC 2017, Amdocs launched its real-time digital intelligence platform aia, combining its domain expertise in telecoms with AI capabilities from cognitive computing services from IBM's Watson platform. The platform has been developed to enable CSPs to take advantage of the enormous amount of data that they have on customers, networks, and their operations, to improve business and network operations, while at the same time improving customer experience and driving new revenues opportunities.
Over the past five years, CSPs have focused on improving customer experience as a way of remaining relevant in the highly competitive telecoms market. Unfortunately, existing business processes such as order-to-activate and time-to-resolve and network operations such as planning and optimization have been performed manually. resulting in delays and errors, which negatively impact on customers' experience.
To resolve these challenges, CSP business processes must be automated using AI capabilities such as machine learning, deep learning, and natural language processing. The need for AI to drive automated CSP operations will continue to grow as the CSP network moves from being physical to being virtual. Software defined networking (SDN) and network functions virtualization (NFV) will be dependent on automated processes to deliver service agility and cost efficiency. Capabilities such as self-diagnostics and self-optimization can only be achieved using intelligent insights obtained from the analysis of quality data sets.
By offering aia as an integral part of its portfolio, Amdocs is placing itself in the right position to support CSPs with their digital transformation objectives. Data and the intelligence that can be obtained from aia will be an important part of transforming CSPs' existing processes. By combining its big data and analytics offerings, data management services, and partner ecosystem (which includes top IT players Cloudera and IBM), Amdocs is setting itself up as the go-to partner for CSPs.
At MWC today, Blackberry and Nokia revivals overshadowed the premium smartphone announcements from LG, Huawei, and Sony. The absence of the Samsung Galaxy S8 from the MWC announcements was the elephant in the room.
Ovum does not think that any of Samsung's competitors have announced anything that will dethrone the Galaxy range as the "king" of premium Android smartphones. Instead, Samsung should be more worried about Huawei, Oppo, and even the revitalized Nokia eating its market share in the mid-range market.
Although the smartphone future for both Blackberry and Nokia now lies in the hands of licensees rather than the parent companies, both TCL and HMD Global understand the value and power of the brands available to them. HMD's revival of the Nokia 3310 is a perfect example of this, as it is a humble feature phone generating much more interest than any of the smartphones announced.
The premium smartphones announced at the start of MWC (the LG G6, the Huawei P10, and the Sony Xperia XZ Premium) all share similar key selling points: innovative cameras; high-quality design; and in-built digital assistants.
Enterprise mobility management (EMM) vendors are extending the capabilities of their technology to support organizations in managing their approach to IoT, with some of these vendors showcasing these enhancements at MWC 2017.
The approach by EMM vendors to extend capabilities in supporting organizations looking to embark on IoT projects is a logical next step. The introduction and focus on defining and developing specific use cases by vendors is particularly encouraging, as this will hopefully help cut through the hype of IoT and help organizations focus and understand outcomes in the context of their business.
Asavie is a vendor that has announced plans to expand its IoT capabilities with a new IoT accelerator kit designed to enable organizations to jump-start their implementation of industrial IoT projects. The kit comprises the Asavie PassBridge IoT connectivity management platform, the Dell Edge Gateway, and EpiSensor industrial sensors. Other established EMM vendors including Citrix, SOTI, and VMware AirWatch are demonstrating at MWC how their technology can help optimize business operations and secure and manage IoT devices and end-points. And last week, established EMM vendor MobileIron announced a new IoT division and platform. Through working closely with customers over the past 12 months, MobileIron has also defined specific IoT use cases in healthcare, energy, automotive, and manufacturing.
Against the backdrop of slow growth and the continued disruption of core services by new internet entrants, today at MWC 2017 members of the "Mobile Operator Digital Transformation" conference panel debated where they see themselves in the next 12–24 months.
Orange's chief strategy officer, Bénédicte Javelot, confirmed that Orange is shortly to become a disruptor itself, via the launch of Orange Bank in just a few weeks. Orange Bank will build on the success of Orange Money in the Middle East and Africa, as it aims to become the number one digital partner in the lives of its customers within the next three years.
The panel largely agreed that digital transformation means taking advantage of new technologies to better serve customers, while allowing access to new business areas. However, panel members could not agree on the specifics of how this will play out.
Alexander Rusli, CEO of Indosat Ooredoo, was emphatic that fewer, but deeper partnerships would be at the center of Indosat Oredoo's strategy of putting the customer first. With the announcement of AURA, Telefonica has identified the ability to aggregate, anonymize, and ultimately monetize customer data to support financial services firms to deliver new services based on improved credit-scoring capabilities and help transportation companies increase efficiency via more accurate location data.
In other news, VimpelCom – as a brand – will cease to exist. It announced today that it will now be known as VEON as it continues to transform itself into a digital media provider.
Visiting Cisco reminds you that 5G is about much more than the radio. It is and will be just as much about new network architectures and virtualization as it will be about the radio. These new architectures will key for enabling new services – especially those for the enterprise. Cisco is ready with network solutions today that can help start those new architectures.
For example, its vEPC solution is already live in multiple networks, supporting more than 150 million subscribers. Cisco is making the case that operators can start achieving their 5G goals when it comes to enterprise services, using its network technologies. Cisco is also using its long-standing position as a supplier of enterprise network gear to help its service provider customers better understand future enterprise requirements. According to Cisco, 5G will really be about the enterprise not the consumer. It claims there is no reason why service providers can't start selling 5G-like services even while they are still using 4G radios.
Related content: 5G will hit 25 million subscriptions worldwide in 2021
Samsung's announcement that it will release a simple controller with the next version of Gear VR brings it more in line with Google's Daydream View hardware. Although neither of these headsets include the six-degrees-of-freedom (6DoF) tracking that dedicated VR headsets offer, a controller at least gives finer grain control in-world for pointing, selecting, and navigating – especially compared to the headset-mounted touchpad Samsung has employed to date on the Gear VR.
The new controller is reportedly also compatible with older editions of the Gear VR enclosure – so could even be sold separately to existing users. The Gear VR headset is compatible with Galaxy S7, S7 edge, Note5, S6 edge+, S6, and S6 edge.
The Gear VR is still the world's bestselling VR headset with more than 5 million units reportedly sold. Sony's PSVR is in second place with sales exceeding 900,000 units.
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