GSMA´s cash cow hit by virus – Cancelling the Mobile World Congress is an opportunity to reboot the event next year
|GSMA cancelled the Mobile World Congress (MWC) this year on account of the corona virus. Strand Consult, which has attended the event for more than 25 years, publishes annual pre and post reviews of it (See links to notes for the last 16 years). As there is no event to preview this year, this note describes what GSMA can do to reinvent its flagship gathering which has become more style than substance.|
Let’s start with the facts. Leading international health authorities established that there was little to no health risk associated to hold the conference. However, GSMA was hit by a swirl of anxiety and decided to cancel the event after one major operator after another cancelled. When GSMA Chairman and Orange CEO Stéphane Richard cancelled, it was obvious that the event would not happen. To be clear, it was not the likes of Samsung, Nokia, Ericsson and LG that pulled out, but the major mobile operators. If mobile operators don’t attend, the value of the event drops, and it becomes difficult to justify the costs involved.
GSMA is better known for the annual gathering in Barcelona than for being the global voice of the mobile industry. Indeed, the challenges for the industry have increased, but GSMA’s policy positions have grown tepid. The association seems more focused on the generating revenue by maximizing the number of event participants rather than galvanizing support to tackle the mobile industry’s challenges. The event has become a hype party for new technologies with little to no discussion of the difficulties the mobile operators face on regulatory and financial fronts. For example, during the 4G era, the event became a showcase for the innovation of over-the-top providers, relegating operators to dumb pipes.
Now that the industry has moved toward 5G, there should be concerted effort to empower mobile operators with the tools for developing rollout policy for networks and spectrum reform. Instead GSMA has been reduced to stumping for Huawei and ZTE. Indeed, GSMA has become so integrated with Chinese technology providers that important discussions about democratic principles, respect for human rights, privacy and surveillance have been avoided for fear of upsetting the Chinese government.
China, Huawei, MWC and GSMA – it’s not about a virus.
GSMA appears to have difficulty balancing the needs of individual members with what is best for the industry as a whole. For example, in early 2019, some mobile operators asked GSMA to produce a report on the cost of restricting Huawei equipment in Europe. The report “Economic Impact Assessment of 5G supply chain restrictions in the EU” was never published but was leaked to the press with a claim that a Huawei ban would cost European operators €56 billion and delay 5G rollout. Strand Consult, which makes its living by testing such claims, calculated the real number to be closer to €3.5 billion, an amount which has subsequently been validated by European authorities and other research firms. Moreover, recent statements from BT and Vodafone on rip and replace costs in the United Kingdom also corroborate Strand Consult’s conclusion that that the cost of removing Huawei equipment is marginal.
The goal of GSMA’s report was to influence the political agenda, but its combination of outlandish figures and poor methodology was likely the reason that GSMA never published it. However, this backhanded effort to take positions which favor some members over others is not advisable for a trade association which purports to be the big tent for the entire mobile industry. Additionally GSMA has become reticent to discuss issues that could negatively impact the owners of 3 of its 26 board members.
GSMA board members China Mobile, China Telecom and China Unicom are owned by the Chinese government and controlled by the Chinese Communist Party. These companies are leading providers of the tools of the surveillance society, and they engage in practices which violate rule of law norms in the free world. Notably these operators use Huawei equipment, another Chinese government-controlled firm. Of late, we have seen the mafia-like practices of the Chinese government toward countries that decline to use Huawei equipment. Consider how the Chinese ambassador threatened the Sweden with trade sanctions if it did not buy Huawei and similar demands made in the Faroe Islands, Germany, and France. Did the Chinese government use the three Chinese mobile operators to put pressure on GSMA? Did Huawei, the lead MWC sponsor, pressure GSMA?
See Strand Consult’s research notes about China, cybersecurity, the use of Chinese equipment, and Strand Consult’s free report: The real cost to rip and replace Chinese equipment from telecom networks.
What should MWC be – my dream based on 13 research notes.
MWC can be a fantastic event, but GSMA needs to restore a robust policy discussion to the agenda. It should be the place where companies and nations describe and defend their approach to the digital society, where spirited debate on different views of the world can be heard. Here are some of the topics which should be discussed at MWC.
1. Asia, Africa and Latin America should learn from Europe’s mistakes. Ideology-based telecom regulation turned the EU from a world leader in telecommunications to a world loser
2. 10 things that to be in place before 5G will be a commercial success – It’s more than building and running mobile infrastructure. How to avoid the situation that the iPhone gets all the revenue – again.
3. EU faces a €150 billion network investment gap to reach its 2025 connectivity goals – Here are the challenges that impact telecom operators’ options
3. 4 to 3 mobile mergers can be derailed by operators telling a story too good to be true and regulators with a religious approach to consolidation.
5. The debate about network security is more complex than Huawei. Look at Lenovo laptops and servers and the many other devices connected to the internet.
6. The biggest taboo in European telecom industry is the cost of cybersecurity – just ask the banks
7. Telecoms operators’ next big challenge is the 100,000 Chinese hackers attacking their corporate customers every day
8. GDPR has a negative impact on venture investment in Europe. This will be a problem for the telecommunications industry.
9. Telecom regulation should be evidence-based and implemented with transparency. The reality of BEREC is that net neutrality rules are made behind closed doors and driven by the ideology of a few regulators from a small group of European countries.
10. New partnerships help telecom and tech companies become green. Google leads the way in Denmark.
11. EU and BEREC celebrate the 100th anniversary of the Bolshevik Revolution with increasing “nationalization” of the telecom industry.
12. Lack of telecom investments will create the next EU crisis. Action from the Commission is too little, too late, and too slow
13. Should GSMA be split up into two organizations, one for the operators who advocate for democratic values and who want to defend human rights and one for the mobile operators who do or cannot support democratic values and human rights.
The list of topics is long, and GSMA likely believes they have touched the themes at one point or another. Yet with so many taboos and too few critical questions, MWC is a sanitized safe space. MWC could be more relevant for the more industry and still be a cash cow. It’s unfortunate that the event was cancelled, particularly for the startups and entrepreneurs which probably won’t get their money back and which hoped to meet mobile operators from around the world.
Let’s hope that when MWC is back next year with a new and improved event with an edge. Read Strand Consult´s predictions for the mobile industry from 2020.