Mobile World Congress: A Week in Reflection (Part I)

It was another sunny February at Mobile World Congress (MWC). Barcelona brought a welcome respite from the tail-end of a snowy winter across Finland and central Europe. The last time I was here was 2009 during my time at InfoVista. I then thought that fifty thousand attendees for an event was remarkable, but this year, more than 67,000 visitors from 205 countries were in attendance, including more than 50 percent of attendees holding C-level positions and 3,500+ CEOs. Although an astronomic figure, it was hardly surprising based on the advances made in technology in recent years. In fact, back then, the sceptics were out in force asking “Why would I need a tablet device from Apple when I have a PC or Mac and an iPhone?”. Looking at the current size of the tablet market, it’s clear that the discussions at MWC are noteworthy predictions of what we can expect to see in the market and at future shows.

A Refreshing New Look for Comptel

“Wow, you’ve changed! was the reaction of many of our customers, friends and analysts to the new face of Comptel that was revealed. The new brand with the tagline, “Making Data Beautiful”, that had been publicly announced only days before, took many by surprise but was the catalyst for fresh discussions around new products, solutions and positioning.

All the Big Players, Exuberance and Excess

The usual suspects packed into the exhibition; many of whom weren’t happy with one stand. These “big hitters” such as Huawei, Alcatel-Lucent, Nokia Siemens Networks (NSN) and Cisco—builders of next-generation mobile infrastructures—had covered all bases by appearing with both commercial (marketing) and closed areas.

For the commercial appearances, Huawei certainly took the prize for the biggest exuberance as can be seen in the image, with a cascading liquid neon display. The Chinese giants certainly also took the Hateley prize for having spent the most on MWC, and this was clearly visible not only on the expo floor but also all around Barcelona!

One of the key business and thought leadership areas for NSN  was Machine-to-Machine (M2M). The company discussed an enterprise vertical-focused solution that leveraged a traditional managed service architecture, complete with infrastructure and processes, alongside a service enablement layer with a “smart” object focus. These “smart” objects obviously relate to the new generation of consumer and commercial devices containing SIM or other forms of IP communication to the network—either public or private. The operational and value chain associated with the entire M2M opportunity is still largely undefined and without standards; however, one thing is for sure: the important role that will be played by the application developer community and strategic eco-system partners that communications service providers (CSPs), network vendors and systems integrators (SIs) will need to form. NSN has clearly taken that into consideration for its ‘fully managed vertical end-to-end services’.

The Top Topics

So what were the top themes this year (that I noticed as an exhibitor)?

Do you agree with the hot topics I’ve identified? Leave a comment and let us know what stood out to you at Mobile World Congress. Also stay tuned for the second part of my reflections on the Barcelona event.

What Can Developed Market Telcos Learn from Emerging Markets?

By: Andy Hicks, Research Manager, EMEA, Telecoms, IDC

By this point, most of us know how dramatically mobile communications have affected the emerging markets, bringing services and information to people who previously had only tenuous links to the larger world. Mobile payments have brought elementary financial capabilities to millions of people formerly dependent on cash. Newly available information on markets, agricultural practices, government services and health have also eased and enriched users’ lives. Communications service providers (CSPs) are offering discounts based on the current usage of individual base stations, stretching their customers’ money and taming network congestion.

The speed of development in emerging markets leads some commentators to proclaim that we live in an era of “reverse innovation,” where things happen first in developing markets and then are exported to mature markets. I’ve never liked that term, which both flirts with condescension and seems to ignore the fact that, from the beginning, the work that went into most of these services occurred in markets developing and developed alike. But what of the central point? Have telecoms in emerging markets produced products or practices that could improve the business of CSPs in the developed world?

At first glance, maybe not. Mobile networks in Sub-Saharan Africa can double as point of sale networks because thereias no established competition, and because regulators are willing to grant them some leeway in order to extend financial services to the unbanked masses. In the developed world, telecoms networks will never supplant the established clearinghouses. Instead, the industry is focussing on enabling Near-Field Communications (NFC), which, in turn, require a level of infrastructure rarely found in emerging markets. And probably the industry’s biggest worry—competition with over-the-top players— has been a non-issue in emerging markets, since few people can afford data subscriptions. Basic pocketbook issues have meant that in low ARPU areas, it’s a 2G revolution.

But if you break down the emerging market success stories, you start to notice that many of the best practices are found on the IT side of telecoms, whether in charging or basic service design. Here, briefly, are three lessons I think we can draw from emerging markets:

• Compelling services are real-time services. Given the predominance of prepaid in emerging markets, it’s no surprise that real-time capabilities are so prominent. The dynamic tarriffing I referred to above relies on real-time analytics and discounts to direct users to less-trafficked cells. In developed markets, a few CSPs are experimenting with similar capabilities for their data networks, both pre- and post-paid.
• Usability is even more important than you think. Everybody mentions Apple when they want to talk about design, but when your transport is SMS and some of your user base is illiterate, making your tasks lightweight, universal and fool proof is a necessity. Developed world users flock to well-designed functionality as well. And optimizing communication between the client and the data centre is still very much an issue in telco services.
• Identity management is a key telco asset. If anything, it’s even more important in developed markets, where the telco has less of a natural place in payments value chains and where fraud can produce much higher damages in absolute terms. When NFC availability depends on vendors and the transaction is cleared by somebody else, the ability to certify a user is a natural capability of the CSP—until OTT players capitalize on foot-dragging to take over that function, too.

There are almost certainly others. Think of it this way: emerging market CSPs are running smart pipes over voice/SMS. Anybody in carrier IT can draw inspiration from that.

Andy Hicks covers telecom software, services, and business strategies in EMEA, with special focus on emerging markets, at IDC. Currently, he is focussing on the IT-ification of telecoms, the increasingly complex services market they compete in, and the work of multinational groups to rationalize their operations across borders.

Recapping the SIMposium, Berlin, 28-29 June

Last week, I travelled to Berlin for SIMposium 2011, organised by SIMalliance in partnership with Informa Telecoms & Media. The conference was a great platform for hearing about new contactless technologies, discussing emerging business models and addressing market challenges and the opportunities of machine-to-machine (M2M) for specific enterprise verticals.

Over the course of the two days, it became clear that Near Field Communications (NFC), M2M and handling identity/security were the primary topics of conversation. For starters, NFC was displayed in many context-enabling solutions; these ranged from e-wallet services all the way to public transportation payment systems. Now that NFC pilots are showing promise on the commercial side, it seems that solution providers’ imaginations are flying high! It will certainly be interesting to see what else is rolled out in the coming months. However, the key to future NFC uptake and to these projects being successful will be to make the solution benefits clear to end-users without making things overly technical.

M2M was also on every operator’s lips at SIMposium. There was a clear consensus that M2M will happen in a major way. Most operators believe that the challenges of M2M are different from those on the consumer side, and to address these, there needs to be a dedicated organization, network infrastructure and offering. Furthermore, M2M customers are looking for global connectivity, which means partnering (and possibly unified roaming pricing) for operators.

The first industry to make M2M really happen might be automotive and transportation, with the legislation in Europe (eCall) and Brasil (Resolution 245) being main drivers for the deployment. M2M is clearly made for verticals that represent different niches, which naturally makes things more complex for operators. Standardisation will help somewhat, but as one operator said at the event, the market is not waiting for standardisation.

Soft SIMs versus SIM cards was another very hot topic during the two-day event. The general view at the conference seemed to be that soft SIMs will gain popularity, but the security provided by regular SIM cards is currently far better. Managing SIMs’ identities securely via over-the-air (OTA) is increasingly important, especially as embedded SIMs become more attractive, because OTA is the only way to handle them. It became clear at SIMposium that SIM-based identity is a key concern for operators, and that there always will be a compromise between security and usability, no matter what the solution is. (One interesting application of note was SIM-based authentication to log on to Wi-Fi networks; in essence, the Wi-Fi customer experience needs to be as seamless as the 3G customer experience.)

Although NFC, M2M and identity management/security were top of mind, it seemed that many SIMposium attendees debated removable versus embedded SIMs—but there are clear benefits for both. For removable SIMs, the ease of switching from one device to another is undeniable; however, embedded SIMs can be placed on devices more freely without relying on ports to access them.

The SIM partner ecosystem is visibly growing, as evident with representatives from card manufacturers, device management vendors and operators, among others, in attendance at last week’s event. Comptel is very excited about this area—feel free to share your thoughts or questions about the market or the conference with us in the comments section.