Internet of Things
IoT Viewpoints explore the IoT opportunity in 2018 and beyond. Download our latest e-book to get our newest collection of thought leadership articles on the emerging IoT trends, technologies and opportunities.
Prominent at this year’s MWC were diverse technology companies of all sizes and specialisms that believe that 5G represents an opportunity to build a presence in the market. The list includes established midsize vendors as well as smaller technology specialists that may lack the scale of the bigger vendors but that have capabilities in key technology areas.
Cloud RAN, fixed wireless access, fronthaul, massive MIMO, and 5G backhaul are just some of the areas ripe for innovation, particularly given the scope and scale envisaged for 5G and the extensive re-architecting of the network that goes along with it.
Vendors from outside the mobile space point to the extensive fixed network resources needed to support and service 5G’s broad deployment model and diverse use cases, which they say will demand capabilities beyond those of the traditional wireless providers. In the RAN space, momentum behind greater openness, interoperability, and virtualization is coming mainly from smaller, specialist RAN software developers, IT companies, and some webscale providers, as well as operators themselves. The newly announced ORAN Alliance alongside operator-led initiatives, such as xRAN and Facebook’s TIP, could yet significantly impact the traditional radio access market status quo.
At MWC 2018, 5G took the expected steps required to become a commercial reality, with service providers and vendors nudging the technology toward market-readiness later in the year. The industry has succeeded in building on the landmark decision to accelerate development of parts of the 5G standard, which was announced at MWC 2017. As a result of that move and subsequent work, the first 5G networks will be switched on in 2018, laying the foundation for gradual subscriber uptake in 2019. Ovum’s latest data forecasts 284.7 million 5G handsets to be sold in 2022, which is three times more than previously expected.
Some notable service provider 5G developments at this year’s MWC include Zain Group and Ericsson’s MoU for 5G tests in the Middle East; Deutsche Telekom’s planned 5G tests at 73GHz with Huawei; T-Mobile USA’s deals with Nokia and Ericsson for 5G infrastructure at 600MHz and 28GHz; TIM and Ericsson’s work on vRAN in Italy; and Ericsson’s work on a 5G test center with MTS in Russia. Each of these steps helps lay the foundation for 5G to be launched in line with commercial realities in those markets.
Meanwhile, work among chipset and device manufacturers means that very early launches, like those in the US, Switzerland, South Korea, and China, will see subscriber sign-ups starting in 2019. The industry is set to make 5G a commercial reality at next year’s MWC.
A major theme at MWC has been automation – whether that’s in the glamour fields of robotics and AI, or the less hyped ones of expert systems, service assurance, and the back office generally. Telefonica, for example, boasts of processing 80% of its trouble tickets with some degree of automation. There is more and more enthusiasm around the enabling technologies for this. But have the service providers really worked through the consequences for their business model?
If you intend to deal with your customers exclusively through an all-digital channel, and automate the processes behind this, you’re also building in a very specific view of the customer relationship. It will need to be simple, product-centric, and transactional. This is, after all, exactly the sort of business a company like Amazon Web Services has mastered. Telcos, however, tend to pride themselves on what they think is a uniquely intimate relationship with customers. (The customers don’t necessarily agree.)
In support of this, they operate huge marketing departments, develop complex pricing rate cards and bundles, and recruit channel partners. Those operators – such as Free Mobile or T-Mobile USA – that have stripped back the complexity in favor of a transactional approach that’s easy to automate have also usually chosen a rock-bottom pricing strategy. Especially in the enterprise and SME markets, automation may mean commoditization.
At MWC Congress 2018, NEC/Netcracker announced that the Vodafone Group will be using its NEC/Netcracker HOM solution to support the group’s transition to being a cloud-based telecoms service provider.
Since the inception of Vodafone’s Ocean project in mid-2015, a key requirement in the operator’s vendor selection process is the ability for vendors to provide cloud-native solutions with the ability to manage both physical and virtual network environments. “Cloud-native” solutions are developed using an approach that combines agile, DevOps, microservices architecture (MSA), containerization of services, and the cloud. These development practices and infrastructure will enable the service agility and the flexibility and speed in creating services promised by SDN/NFV. For example, with microservices architecture, applications are built as a distributed collection of services that can run on the cloud, communicating with each other via standardized APIs. The MSA thus lays the foundation for the automation of network and service operations (such as auto-provisioning, auto-scaling, and auto-configuration).
Next-generation networks will run based on hybrid network functions (including physical and virtual). It is therefore important to have management and orchestration systems that can manage operations in both physical and virtual domains.
NEC/Netcracker’s HOM platform was found to fulfill these requirements. It is cloud-native and leverages microservices and technologies such as big data and analytics to provide service design, planning, management, orchestration, and assurance of hybrid network environments.
At MWC 2018, Nokia is demonstrating its recently launched Sensing as a Service offering for CSPs, which enables CSPs to leverage their network assets to drive new revenue opportunities and improve service operations.
CSPs have long sought to play a more critical role in the IoT value chain, beyond just providing connectivity. With connectivity becoming a commodity service in the IoT space, CSPs need to identify other ways to justify investments in IoT. Providing value-added services based on analytics of data obtained from the network and the IoT devices is an area that CSPs have an opportunity to play in. In most cases, CSPs own the network and possess data related to the IoT services. Given the right expertise in collecting, management, and analysis of the data, CSPs can provide end consumers as well as enterprise customers insights that deliver a myriad set of use cases to improve the service experience.
For Nokia, it’s also about demonstrating its capabilities beyond providing network equipment and IoT platforms to support IoT services. With this launch, Nokia looks to move up the IoT value chain by positioning itself as an analytics services provider with the ability to combine analytics and data-management capabilities to meet multiple use cases across multiple industries. Nokia’s recent investments in analytics and recent engagements with players in the IoT space strengthens its new launch.
Although most of the 5G focus at MWC 2018 has been on networks, as part of the first steps toward 5G smartphones and other devices, Huawei has unveiled its Balong 5G platform for dedicated mobile broadband devices, while Intel has announced a partnership with Spreadtrum to produce a 5G smartphone platform by 2H19. Today, Qualcomm revealed Snapdragon 5G Module Solutions aimed at simplifying the process of bringing 5G to smartphones in 2019.
Ovum predicts over 280 million sales of 5G smartphones in 2022, making up 12% of all handset sales and causing 5G adoption at faster rate than for 4G. This will be primarily driven by the existing large base of smartphone users demanding faster and more reliable data services.
The solutions announced by Huawei, Intel, and Qualcomm will apply to more than just smartphones: laptops, tablets, VR headsets, and many other types of device will also benefit from aggressive moves to get 5G on smartphones – provided of course that operators offer attractive data plans for these additional devices.
Today's GSMA Future Networks Seminar: Messaging As A Platform – The Future of Brand Communications was reportedly the most oversubscribed event in MWC history. The seminar covered the uses of RCS Business Messaging for brands, and its overall message was a positive one.
Trials of RCS Business Messaging are already under way with brands such as SnapTravel, Subway, and 1-800-Flower in the US and ITV, Barclays, British Gas, Nissan, and Uber in the UK.
ITV raised some potential issues for the future of RCS Business Messaging when presenting on its trial. It highlighted the risk that the platform would become another source of spam, resulting in falling open rates. Brands also want open payment facilities. They will often have their preferred payment mechanisms, so a closed payment system locked to an operator will not appeal. Also, if costs are too high, brands won't be able to justify using RCS Business Messaging.
The fact that RCS Business Messaging offers so many business-oriented features is great for the overall RCS platform, but Apple's reluctance to enable the platform on its devices could still prove a stumbling block for adoption, limiting its potential for business use.
Fixed wireless applications in particular are achingly close to delivering on 5G hype. But everyone is strangely vague about potential customers. The step-up from LTE to 5G is meant to be about speeds increasing from 100Mbps to 1Gbps. Getting this sort of service into the places where fixed wireless is relevant – out where the DSL runs get long – would be genuinely transformative for businesses and anchor institutions (e.g. schools). They are also more likely to buy it. In the US consumer market, the race for 1Gbps speeds has turned out to be more of a race for 300–500Mbps, and 60% of midsized companies are planning to increase their spending on mobile and cloud. But if they want the cloud, they need the connectivity to reach it.
Some vendors on the devices side of the industry understand this need. They are actively planning to market the next generation of mobility into their SME channels, and they see business users with a demand for constant connectivity as crucial. Others, usually on the network side, don't. The talk is all about UHD TV streaming and virtual reality gaming. They expect to leave value-added network services such SD-WAN until the 5G core takes over providing fixed services too.
Huawei has strengthened its enterprise proposition with the launch of its intent-driven network concept – a cluster of capabilities designed to configure, adapt, and secure B2B digital interactions on the fly.
Given the ever complex, multiservice nature of today's enterprise networks – and the growth of B2B revenues among service providers – Huawei's initiative should draw interest.
Intent-driven network capabilities aim to span Huawei's carrier and enterprise portfolios, in various contexts from forthcoming 5G bearer networks to enterprise VPNs, datacenter networks, and home broadband, among others.
Continuing a prevailing theme at MWC 2018, automation and AI are heavily involved in delivering these capabilities. Arguably, the most potent capability is the ability to predict and serve up the precise network performance required as people and things interact with various digital services and applications. Also important is the ability to automate fault identification and repair.
It's mobile-first, cloud native, and focused on democratizing communications at work, but does Facebook's Workplace convince? So far, Facebook and its partners have focused on automating HR processes; pushing corporate messaging out to employees; and, in a phrase typical of the company, "driving employee sentiment." The emphasis has very much been about the inside of the enterprise – especially the large enterprise.
Curiously, Facebook Workplace's cousin, WhatsApp Business, is almost the exact opposite.
WhatsApp's approach is remorselessly focused on the SME space and on the SME's relationship with its customers. You'd go to WhatsApp Business if you wanted to respond to customers with instant replies, route incoming messages around your team, or immediately open a ticket in some other application through shortcode syntax. You can even embed a WhatsApp call-to-action in a Facebook ad.
Whereas Facebook Workplace speaks to "feel," WhatsApp Business speaks to "do." How Facebook intends to resolve this remains to be seen.
Competition is mounting among vendors to demonstrate their activities in the AI space. At this year's MWC, Ericsson unveiled its recent work around the use of AI within CSP networks – a process referred to as machine intelligence (MI). MI involves the application of AI techniques such as machine learning (ML), image recognition, and natural language processing (NLP) to pre-existing tools and services to simplify and improve network operations and enhance the performance of network equipment provided by Ericsson.
Ericsson plans to succeed in the AI space by combining AI technology with its expertise and experience in the networks space. The vendor has chosen to focus on two critical pain points of the CSP business: costs and customer experience. However, it should be prepared to encounter fierce competition from its peers, which have been quick to go to market with similar messaging around AI. Nokia's Multi-purpose Intuitive Knowledge Assistant (MIKA), launched in 2017, comes in direct competition with Ericsson's soon-to-be-launched AR assistant for ERS. Huawei, on the other hand, has been pushing forward its work to enable automated beamforming to support the evolution of networks to 5G.
To gain ground, Ericsson needs to be more aggressive and go to market as quickly as possible with propositions that have proven AI capabilities.
AT&T, China Mobile, Deutsche Telekom, NTT DoCoMo, and Orange announced at MWC today the ORAN Alliance, a carrier-led effort to drive new levels of openness in the radio access network of next-generation wireless systems. The network remains a service provider's main point of differentiation, and the foundation of all other differentiation, so it's in service providers' best interest to exert as much control as possible over the future technologies that will determine how they make money.
ORAN will focus on developing open, interoperable interfaces, RAN virtualization, and big data–enabled RAN intelligence. It aims to maximize use of off-the-shelf hardware and merchant silicon, with specified APIs and interfaces.
Bringing together some of the world's leading network operators is a great starting point for success in influencing some key next-generation technologies. But this won't be enough to bring about success by itself.
ORAN's success will be determined not just by how closely network operators work together on next-generation technologies, but also how effectively they can work with the vendors pioneering research and development of these technologies. To succeed in this, ORAN operators will have to not only align with the major vendors on technology road maps, but also align with their strategic and business objectives.
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.
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.
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.
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.
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'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.
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.
Consumer & Entertainment Services
By Adam Thomas 28 Mar 2018
With US pay TV having endured the worst year in its history, thoughts have inevitably turned to the future. The likelihood remains that the immediate future will remain highly uncomfortable for everyone except the scaled multinational digital platforms.
Internet of Things , Consumer & Entertainment Services, Serv...
15 May 2017
<p>A collection of thought leading articles on opportunities across the emerging Internet of Things market.</p> <p> </p>
Europe, Middle East & Africa team - +44 (0) 207 017 7700
Asia-Pacific team - +61 (0)3 960 16700
US team - +1 646 957 8878
Already an Ovum client? Login to the Knowledge Center now