MWC 2018 Highlights: Day One
Global mobile operators want to get better, but they are already good
The MWC opening keynote today saw C-level representatives from Bharti, China Mobile, NTT DoCoMo, Vodafone, Telefónica, and Telia (representing a quarter of the world's global mobile subscribers) discussing the future of the industry and figuring out how to become better service providers. An optimistic light permeated the discussion, mainly as a result of the seemingly endless possibilities 5G is set to provide. Healthcare, construction, vehicles, industrial monitoring, connected cities, and many other testbed examples were presented. But overall, operators were complimenting themselves about their achievements, being it social inclusion, their contribution to the overall economy, or assisting the wellness of societies.
It would not be MWC without a dig at internet players' excessive dominance, asymmetric regulation, or the need for spectrum harmonization and longer licenses. A reference to Facebook and Instagram being the largest telecom operator in the world, yet not being subject to telecom regulations, is a must at MWC too.
It's worth mentioning some unique views: That the future is about co-creation rather than just partnership (DoCoMo), and that it's about execution rather than strategy (Telia). Overall, however, the CEOs agreed that it's about creating a better service provider, meaning more of the same (e.g., increasing mobile data usage), as well as more of the newest (e.g., 5G and AI). In operators' quests to be better service providers, surely something does not need improving: Service providers talking big about their own role in the ecosystem. This is something in which operators already excel.
Meanwhile, some questions emerged: How does the industry address an overall level of profitability that is suboptimal? How can the industry assure that AI will not translate into widespread unemployment and how to mitigate growing concerns? And how does the industry help customers in protecting their privacy and personal data? Hints to solutions are there but most likely these will still be questions for the hot topics of MWC 2019.
Smartphone focus shifts to low end, as premium devices lack major innovations
Daniel Gleeson, Senior Analyst, Consumer Technology
Despite the many flagship smartphone releases at MWC, the overarching theme is one of incremental updates. The technology employed to make premium smartphone cameras ever more capable is indeed impressive, but the benefits these improvements bring are also increasingly marginal. The growth of edge-to-edge displays has managed to make smartphone design even more homogenous. The result is that 2018's premium smartphone range is not terribly exciting and will not reverse the slow upgrade cycle at the top of the market. Samsung seems to have been well aware of this as it went out of its way to highlight its trade-in program during the Galaxy S9 launch event.
With little excitement at the high end, the focus of many brands at this year's MWC is at the complete opposite end of the spectrum. Google's latest initiative is to bringcheap, capable smartphones to everyone; Android Go had its first product announcements at this year's show, with brands such as Alcatel, ZTE, and HMD/Nokia all announcing devices before MWC officially started. Android Go is a much lighter version of Android, meaning fewer stringent hardware requirements which enables much cheaper smartphones. The sub-$100 category for smartphones is in its infancy, but Ovum predicts that with Android Go, the category will reach more than 600 million unit sales by 2022, making up nearly a third of all smartphone sales.
Chatbots are helping to digitize, personalize, and even economize customer care
Charlotte Palfrey, Senior Analyst, Communications and Social
Improving customer experience across multiple channels including social and messaging using artificial or cognitive intelligence is a need which a number of companies across the mobile value chain are highlighting at MWC 2018. This could be via AI-enabled chatbots on the user's favorite messaging platform, AI-enabled digital assistants, or unifying experiences across customer channels using multiplatform AI.
The preferences of millennials are top of mind for many, with messaging rather than calling th
millennial choice of communication. Not only does AI-enhanced messaging allow businesses to meet millennial expectations; it also allows them to cut costs in customer support by only escalating to a customer service representative if the AI can't find an answer to the customer's problem.
European telcos gain momentum in the smart home space
Over the past year, the vendors' push to turn the smart home industry into mass market has been overwhelming. Vendors such as Amazon and Google, through their AI-enabled smart speakers and rich ecosystems of partners and developers, have been able to take the lead, leaving telcos behind in the race for smart home supremacy. The limited success of some operators has even forced their departure from the smart home industry, as the case of Swisscom and O2 UK.
However, telcos such as Telefónica and Vodafone are now trying to gain momentum in the smart home industry, at least in Europe. With a hands-on market strategy, Telefónica has announced the launch of Movistar Home, a new AI-enabled consumer device based on Aura digital assistant, which acts as a hub for Telefónica's multiple services. To expand the reach of its ecosystem, the operator will integrate Aura with third-party assistants such as Google Assistant and Microsoft's Cortana in the coming months. Vodafone, however, has announced a market approach based on a strategic partnership with Samsung's SmartThings to launch smart home services in Europe under the V-Home by Vodafone brand.
Ovum believes that telcos will continue to redouble efforts, not only by launching new connected products and services, but also by promoting integration with third-party AI assistants to improve the whole end-user experience while protecting their territory from smart home vendors.
Telefónica's Aura is an industry first in customer relationship based on cognitive intelligence
This morning at MWC at a session looking at best practice examples of digital transformation and embracing digital culture, we heard from Telefónica's chief data officer, Chem Alonso, on its fourth and cognitive intelligent platform, Aura. The platform, which utilizes AI to provide a new way of customer relationship and services based on the application of cognitive capabilities, has undergone a process which started in 2012. Telefónica has invested some €48bn ($59.1bn) in IT integration, development of new services and products based on this, and deployment of network and infrastructure that act as building blocks for Aura.
The platform uses big data as a common language across all its global businesses, facilitating new VAS and is available on variety of channels. "We are using the same data format everywhere with normalized APIs" enabling the production of services globally, Alonso noted.
In terms of outlook, the company is integrating 5G testing with the fourth platform. But to fully embrace digital transformation, the challenge remains for the Aura team to "kill off" the legacy system. Ovum believes that through Aura, Telefónica is setting an industry first in the way it communicates and maintains a relationship with its customers based on cognitive intelligence, allowing it to engage in real time with the telco.
Vodafone and Samsung play to their strengths in smart home partnership
Vodafone and Samsung's smart home partnership shows how companies can join forces to leverage their core strengths into new digital services. Although Vodafone will still need to work hard to show it can bring new value to its customers, the move is important as it brings its consumer IoT strategy into the home, having launched mobile-focused V by Vodafone consumer IoT services in 4Q17. It also aligns the company with a trusted household brand name. And for Samsung the partnership will extend its smart home services into Vodafone's retail outlets, while adding essential parts to its smart home strategy – most importantly, connectivity.
It's unclear for how long Vodafone will have exclusive rights to Samsung's smart home services, and to make the most of it Vodafone should market the services aggressively from the outset, and align itself with the Samsung brand as much as is relevantly possible. If the companies can execute well on marketing and making the services "work," from setup to aftersales support, then they stand a good chance of growing together in the smart home market.
The services will be branded V-Home by Vodafone, will be powered by Samsung's SmartThings Wi-Fi hub, and will be launched in Spain and Germany in 2Q18, marking the European debut of Samsung's smart home controller. For the German market, the launch will bring strong competition to Deutsche Telekom's smart home ambitions.
Facebook's affordable internet project gets telco MWC boost
The usual MWC focus on connecting the unconnected in emerging markets today saw Vodafone and Telefónica rally round Facebook's Telecom Infra Project (TIP), which Telenor today joined to help evolve 60GHz wireless technologies in Malaysia, as well as open systems for base stations in Pakistan. Vodafone's new Open RAN technology, in conjunction with Facebook's OpenCellular wireless access platform, both developed with TIP, will be used to help companies profitably extend coverage to undeserved areas. Vodafone says that its Open RAN technology will reduce the cost of radio network equipment by up to a third.
Telefónica, meanwhile, aims to connect the more than 100 million people in Latin America with no internet access, while 20% of the population in the region still lacks proper access to mobile broadband. Telefónica and Facebook aim to extend their current project to bring high-speed mobile internet to tens of thousands of Peruvians across highlands, in the Amazonian rainforest, and to other parts of Latin America.
In conjunction with numerous announcements from vendors and device manufacturers to lower the cost of smartphones, the cost of technology is becoming less of a barrier to rolling out profitable broadband access to hard-to-reach and low-income groups in emerging markets. It's becoming increasingly important for telcos and regulators to work together to use the latest technologies to solve ongoing connectivity problems to make sure that access to the internet is available to everyone.