Research Notes

Mobile World Congress 2010 – a Preview by Strand Consult

Once again the time is quickly approaching where we and many others will travel to the MWC in Barcelona.

All cultures and all industries – even families – have their traditions, and this is also the case in the mobile industry, where it is a tradition that over 40,000 people meet in Barcelona to talk about the mobile market, what it looks like and how it is developing. An event like the MWC is not just a congress where companies exhibit and show their products, it is also a place where those that follow or work in the industry come to share thoughts and visions and to seek inspiration. For many people, the MWC is and will continue to be the place where we not only see what is happening, but where we also meet the visionary people who help influence the mobile market both globally, regionally and nationally.

Many people are talking about the financial crisis. Fortunately the crisis does not seem to have affected the telco industry as badly as many other industries. In fact, the financial crisis has been good for many operators in the sense that it has given them a good excuse to right-size their organisations and considerably reduce their cost levels. If we were to speak of market players within the telco industry that have been affected by the crisis, it would primarily be within the infrastructure industry. Part of their problem is that the government in many countries cannot tell operators what the region’s long-term plans are regarding frequencies and regulations, resulting in operators having difficulty creating long-term strategies that are the foundation of the large investments that drive the infrastructure market.

This year we believe that many people will talk about that the largest challenge for operators is not the financial crisis that hit the world in 2008, nor the latest crisis that hit the PIGS countries (Portugal, Italy, Greece and Spain), but the fact that most governments do not have a long-term telco policy that the industry can use to navigate by.
This year’s Mobile World Congress in Barcelona will in many areas mirror our predictions for 2010, predictions that you can read about here: On the other hand it will most probably also be a reality check for those market players that do not have the right strategy and that have been focusing on the wrong products.

The conference – listen, learn and become wiser.

The 2010 MWC not only boasts an exciting list of exhibitors, but also an exciting conference program with many speakers that will be well worth listening to. As usual the conference program is a combination of what is currently hot on the market and the considerations that need to be taken by the GSMA organisation. There are no big surprises in the list of keynote speakers, the conference is a showcase for the largest GSMA members and the largest exhibitors in Barcelona.

This year Nokia has chosen to reduce their participation to the exhibitions that the Symbian Foundation, Nokia QT and NSN are bringing – Nokia will not have an actual Nokia stand this year. We do not know whether that is the reason why Nokia – the world’s largest mobile manufacturer – does not have a keynote presentation this year. On the other hand it is not difficult to imagine that there is a connection, as Nokia has clearly stated that they will not exhibit at the MWC, but instead piggyback on the conference by inviting people to an event within walking distance of the MWC. Or put slightly bluntly, Nokia is choosing to only participate in the freebie benefits of the MWC.

Looking through the conference program we see there are many exciting speakers, but we rather miss the big names, those that make a difference and perhaps some of those that can question the way that the industry is doing business. We have no doubt that the actual conference will be worth a visit, but we miss those speakers that can intellectually challenge the industry. Many of this year’s speakers are the “old boys” network.
And while on the subject of the conference, we believe that the most important event will be the “GSMA Ministerial Program”, an event where over 30 ministers and 50 regulatory heads from over 65 countries participated last year. We believe that those that have access to this event on Monday shoud actively participate and help open the political system’s eyes to the importance of conducting industrial politics in the telco area and that the telco industry is one of the industries that has the best tools to help solve both the financial crisis and the problems that were not solved in connection with COP 15 in Copenhagen last December.

During the main conference that starts Tuesday, we are looking forward to listen to Eric Schmidt from Google. It will be exciting to hear how he will avoid the subject about Google’s desire to turn operators in to dumb pipelines. I believe that many people are convinced that Google has not disclosed what their real gameplan is for the telco world and the role they see themselves playing in the future telco market. There are probably a great many people that see Google as the largest threat to the traditional telco industry.

There are many exciting subjects in the conference program and there is no doubt that the main focus is on mobile broadband, how it has developed up to now, how it will develop in the future and how different market players will use it in the future. Currently over 50% of mobile operators’ CAPEX is used on expanding mobile broadband and when you compare this to the fact that mobile broadband price in many countries is decreasing faster than the market is growing, there is little doubt that mobile broadband will drive the mobile industry’s consolidation on a number of markets. Strand Consult has published this research note about this subject:

are sure that the many conference participants will learn a great deal of exciting information about how the speakers view the future and what is currently happening on their markets. But having said that, it is a little sad that an industry with so many interesting market players, year after year lets the same people fill out the key note slots during the conference. We believe that there are many exciting people among the GSMA members and industry suppliers that deserve the opportunity to contribute exciting and relevant information during the week.

What will we see at MWC 2010?

Regarding this year’s exhibition there is no doubt that we will see many exciting market players. It will be no surprise to see the largest industry players at MWC and you really should take the time to visit most of them, both to see what they are offering and to get an idea of the hype being generated by the commercial part of the industry. It is no secret that many of these market players have their main focus on the products and services they can market and sell right now.

Measured in volume, these are the players that are dominating the industry and that are showing the products that are at the top of the mobile operators’ shopping lists. With the current focus on mobile broadband and amount of CAPEX mobile broadband is using, there will be a great deal of focus on all the products needed to optimally produce mobile broadband. We believe that many market players will have a great deal of focus on how to handle traffic shaping, traffic optimisation solutions etc. for mobile broadband networks and that the number of solutions targeted at this area will explode, as mobile data traffic continues to grow significantly over the coming years.

While on the subject about the large market players, there is no doubt that the Chinese players will be very visible this year. Not many years ago many people perceived “Made in China” as being cheap, poor quality products. Today the world is very different and Chinese players like Huawei and ZTE, and other medium sized companies are now playing a role that is resulting in the traditional Western market players experiencing a level of competition that they would most probably have preferred to avoid. Even Barack Obama can confirm that China is a superpower and when it comes to telco technology there is nothing more to say than “Made in China” now has a very different meaning than just a few years ago. We believe that a lot of other industries should take a look at what is currently happening in the telco industry and start contemplating about when the same scenario will happen in their industry.

Again this year there are many national stands and we can again recommend visiting these. Visiting a national stand is often a fast and easy method of getting in touch with small innovative companies that have developed exciting solutions. Some of these companies will grow enormously during the coming years others will be purchased by bigger market players and some will disappear. Much of the innovation coming from many of the small companies is the type of innovation that will help drive the telco industry during the coming years.
The list of all the other companies participating at the MWC is abundant with exciting companies from many different areas of the industry. You will find everything ranging from totally unknown handset manufacturers, to companies that have created entertaining types of services, to companies that have developed technological solutions that are so specialised, that you would need to be a specialist within that area to understand and evaluate their solution.

The art for delegates participating in the exhibition is to find the few among the many, companies who’s solutions make a difference and who are building their business based on a business model that will enable a long-term sustainable business and that will at the end of the day give a return on investment on the money that customers give to operators every day. Most of the companies visiting Barcelona do business based on the money that mobile operators around the world pass on after they have paid the taxes and fees charged by their national governments.

The bottom line for 2010 is

Strand Consult will naturally have our employees visit many of the companies that we find interesting and again this year we will be looking for companies that are focused on solutions that will be interesting to the many companies that have purchased our reports and the over 20,000 people that receive our weekly newsletter. We are not sending four employees to Barcelona to have fun – we are there to listen, learn and become wiser.

For us, the Mobile World Congress is a fantastic place, where we can meet people we know and people we would like to get to know. We always run into new exciting people that become lifelong friends.

The conference will – as always – be interesting, with a variety of serious speakers and hopefully still a high number of participants. The MWC is the telco industry’s largest get-together party and 2010 will definitely be yet another exciting and fruitful event. All these are good reasons to come to Barcelona next week. Strand Consult has been in this business for 15 years with the sole purpose of helping our customers navigate in an ever-changing industry.

We are looking forward to some very exciting days in Barcelona – the Mobile World Congress will undoubtedly again surprise many people this year and even though we will go home with many answers, we will once again end up having a number of new questions that will need answering next year.

If you would like to meet with Strand Consult during the MWC, please email us your contact details and the details/purpose of the meeting, and we will get back to you. Journalists are most welcome!  Meet Strand Consult at the Mobile World Congress 

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