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Summary

The Asia edition of GSMA’s Mobile World Congress took place in Shanghai at the end of June. Industry leaders called above all for more innovation. Hardly any business was left unmentioned, including smart home, Internet of Things (IoT), virtual reality, Rich Communication Services (RCS), 5G, and devices. Innovation is imperative, given the new reality of revenue pressure and competition, including from MVNOs. IoT, big data, and even 5G were heralded as the industry’s “saviors.” The importance of these themes cannot be underestimated, and they were even enough to draw global behemoths, including Telefonica and Deutsche Telecom, to Asia for the event.

Telcos tackle industry issues such as flattening subscriber growth

The conference hosted a series of summits focused on particular topics, which brought greater depth to the event. For instance, at the Operator Summit, where Ovum hosted a panel, innovation was a key takeaway, whether this was through finding innovative business models or through creating an ecosystem to make the most of the growing IoT opportunities. We are glad the industry recognizes the importance of business model innovation. Ovum believes that this is the biggest bottleneck to innovation success, and that this will continue to be the case unless industry executes on business model delivery.

The RCS Summit was another focal point at the conference with discussions on the growing applications of services to the enterprise sector and the growth of RCS in China. The success of RCS in China would be instrumental in helping more telcos to adopt RCS across Asia.

Not surprisingly, the network side of the conference was heavily focused on 5G. Some telcos even spoke of the need for 5G deployments to be swifter in order to open up new revenue opportunities such as those promised from mass connectivity. Takashi Tanaka, President of KDDI, even noted that growing competition from MVNOs in Japan, and the subsequent impact on their customer base, meant 5G was needed sooner rather than later. Meanwhile, China Mobile Chairman Shang Bing took a more immediate focus, saying the company’s aim was to achieve 99% market coverage with LTE by the end of 2017.

At the IoT Summit, China Unicom’s Shen Hongbo also spoke about low subscriber growth in parts of China and the expectation for revenue growth to plateau by 2018. He affirmed that IoT will be a crucial component in growing revenues in the future, but in order for that to happen, we need business model innovation.

Social change and AI dominate keynotes

The keynote presentations focused on the ability of the mobile industry to foster development and social change. This was touched upon by multiple keynote speakers such as Sunil Bharti Mittal, CEO of Bharti Airtel. This tied in well with the GSMA initiative of using big data for social change that sees 16 top telcos from around the world working to utilize data to impact social change. Central to improving social change through increased GDP, improvement in quality of living, and increased productivity/efficiency is ensuring that networks reach areas such as rural hubs and villages. Ovum believes that while more emphasis is being place on technology viability for reaching the unreached, the industry as a whole is still far from bridging the digital divide.

Artificial intelligence (AI) was a hot topic at the event and it ran through each aspect of the telecoms industry, whether through Ovum’s talk at the Global Innovation Forum about how chat apps through AI are inverting the current search and content paradigm, or through the application of deep learning by vendors to create smarter solutions for telcos, or even through the use of AI to make self-healing networks smarter and more efficient. Ovum believes that AI will not only be a key contributor to growth across verticals but that it will also enable telcos to become more efficient.

There was also the usual range of announcements on the devices front, with Qualcomm announcing its Snapdragon 450 chipset, Samsung announcing its dual camera sensors, and Vivo demonstrating its display-based fingerprint sensors.

The players that were clearly missing from this discussion, however, were large internet players, such as Tencent, Facebook, and Google. Though some of these did have a small presence through exhibits at the conference, internet player representation was lacking in the keynotes and across the conference summits. The telcos and vendors together spoke a great deal about innovation and partnerships to grow revenue, but a vital part of the ecosystem – and incidentally drivers of growth – went unrepresented.

Appendix

Author

Neha Dharia, Senior Analyst, Consumer Services

neha.dharia@ovum.com

Nicole McCormick, Practice Leader, Broadband and Multiplay

nicole.mccormick@ovum.com

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