Marketing what’s next? – A preview & quick guide to the MWC 2014

MWC2014We are just a few weeks away from the biggest mobile event in the telecom’s industry, the Mobile World Congress 2014 in Barcelona, Spain, an event that typically measures the technologies and trends we will see during the rest of the year in the telecommunications’ world. What a better way of starting this year’s posts on The Madrid Telecom’s Blog, than providing a quick summary of the things you should know about the event and some predictions on the topics to discuss.

The show evolution

The “Mobile World Congress” (MWC) is a well-known show hosted by the GSM Association (GSMA) since 1995, originally done in Madrid in fact but moved to Cannes on 1996. On 2008, the GSMA moved the show to Barcelona, and hosted it there since then… and up to at least 2018 as the GSMA selected Barcelona on 2011 as the “GSMA Mobile World Capital”. Some might challenge the real purpose of the event, but a show that started as a way to purely encouraging technology evolution during the hype of the GSM technology, rapidly became a monster source of marketing and business for the rest of the industry. Some analysts estimates the GSMA represented an impact of around 3.5 million euros in earnings to the city of Barcelona during 2013, and no company in the technology or telecommunication spaces can afford not being present in the MWC show each year if wants to be known in the market.

The MWC2014 in numbers

The Mobile World Congress 2014 will take place from February 24th to 27th, once again in the Fira Gran Via in Barcelona, Spain. The huge exhibition space has been slightly increased to 98000 m2 from the 94000 m2 of last year. Again there will be a total of 8 halls, from which 5 will be used as exhibition areas (halls 1, 5, 6, 7, 8). Huawei was the vendor with the biggest space last year, having a total of 240000 m2 and 8 pavilions used, and we can expect similar sizes this year. Ericsson will also have a huge space allocated. The full exhibitors map can be seen (here).

According to the GSMA a total of 1595 different exhibitors are registered until today, while MWC2013 had a total of nearly 1700. More than 72000 visitors are expected this year, having 72534 as the total record assistance seen during last year’s show. More than 200 countries are expected to be represented, keeping in mind last year’s attendees geographical split was: 67% from Europe, 15% from North America, 13% from Asia Pacific, 5% from the Middle East, 3% from Latin America, and 2% from Africa.

The agenda of conferences fully covers the four days, including 7 keynote conferences. The show is expected to have more than 60 conferences and seminars in total, with more than 10000 attendees. The MWC2014 will be having more than 3000 media and analysts covering the event.

MWC2014_1

There are 4 types of tickets or passes for the show, visitor-silver-gold-platinum, ranging from 750 to 5000 euros depending on the access levels and options. The average price of a room in the hotels in Barcelona during the event is around 400 euros, while the regular price uses to be around 100. More than 25000 hotel rooms are booked in advance for the show with an expected occupation of more than 95% during that week. There will be around 50 restaurants in total across the exhibition spaces. The show will be open for visitors from 09:00 to 19:00.

Conferences Program

If you are lucky enough to have a pass to the conferences, the full schedule can be found (here). The keynote conferences include sessions from Alcatel-Lucent, América Móvil, Bitcoin, Cisco, EMC, Jasper Wireless, Millicom, SK, Telenor, Tele2, and WhatsApp, among many others.

Personally, I would specially highlight the following sessions thinking on what 2014 could bring to the industry:

  • Keynote 1: Industry Perspective: Mobile Operator Strategies (Feb 24th 09:15-10:45)
  • Creating the Next Access Networks (Feb 24th 14:00-15:30)
  • Building the Future Network (Feb 24th 16:00-17:30)
  • Keynote 3: The Connected Lifestyle: Transforming Industries (Feb 25th 09:15-10:45)
  • Smart Cities: Smarter Living (Feb 25th 14:00-15:30)
  • Driving New Revenues & Relationships for Operators & Brands (Feb 25th 16:00-17:30)
  • The Future of: Smart Buildings (Feb 25th 16:00-17:30)
  • Keynote 5: Up Close & Personal: The Power of Big Data (Feb 26th 09:15-10:45)
  • The Future of Voice (Feb 26th 14:00-15:30)
  • Complementing Coverage with Small Cells & Wi-Fi (Feb 26th 14:00-15:30)
  • Spotlight on Business Models for M2M Services (Feb 26th 16:00-17:30)
  • Optimising User Experience with Intelligent Network Assets (Feb 26th 16:00-17:30)
  • Keynote 7: Innovation Unleashed (Feb 27th 09:30-11:00)
  • Exploring Successful M2M Applications in Adjacent Industries (Feb 27th 11:30-13:00)
  • Rise of the Machines: Enabling the Evolution from M2M to an Internet of Things Future (Feb 27th 14:30-16:00)
  • Redefining Reality with Screens, Storage & Wearables
  • ·(Feb 27th 14:30-16:00)
  • Developing the Ecosystem for Mobile Identity Services (Feb 27th 14:30-16:00)

The key Trends and Topics

Every year the event gets bigger and massive, having representation from all the possible areas in the industry. However, we can always identify a few topics and trends as the most commented, or the ones creating the most interest or hype. These give an idea of what the year will bring for the telecommunications.

We can expect the following topics within the most popular during this MWC2014:

1. New wave of smartphones and gadgets, now including wearables: There are unofficial rumours of new smartphones being presented as the new Samsung Galaxy S5, or Sony Xperia Z1 Compact & Z2, among others. The wearables will be everywhere, possibly including a Samsung Galaxy Gear 2, and new features of the Google Glass for developers and designers. This topic will have a lot to say during the show and the rest of the year.

2. Smart Cities: The industry is making an effort to encourage the concept of the Smart Cities. There will be a space for the GSMA Connected City which aims to show the business benefits of the connected life.

3. Spectrum efficiency and automatic networks optimization techniques: We will continue to see many solutions targeting techniques for automation of the networks optimization and organization, now in both the access and core networks. The spectrum efficiency will be also discussed in detail as the vendors and standardization organizations are already starting to plan the next generation of mobile wireless communications.

4. LTE-A & VoLTE: Most of the operators in the world having LTE will continue evolving towards LTE Advanced and/or implementing Voice over LTE. Having the lessons learned from Asia and their successful deployments, we can now see the leader CSPs making plans for the next step in the evolution.

5. NFV , SDN, and the Cloud: The biggest hype in the industry during 2013 will continue growing during 2014. In the show we will hear a lot about virtualization, as almost every vendor will claim to support it in some level for catching up with the evolution wave. We should follow the demonstrations the NFV leading vendors and consultants, as this is the only way to have a taste of reality.

6. Everything connected, M2M and IoT: The Internet of Everything, as the industry is calling the Machine-to-Machine and Internet of Things these days, will be a key topic during the MWC2014 and the rest of the year. There are important evolutions in terms of hardware size and cost reduction for the devices, as well as connectivity and “cloudification” of the software and data from these. We will see a lot of different approaches and fun gadgets for the connected industry, connected car, and the connected homes.

7. Indoor coverage, small cells, WiFi: The next step in the wireless evolution, after the LTE is well established as the leading outdoor access technology, is covering the gap for the indoor access. Interesting solutions will aim to cover the gap with a combination of WiFi, small cells, and optimization techniques. Keep a close eye on the big players and their solutions for this space.

8. Big Data & Predictive Analytics: Once again, Big Data is the common topic among the business and network intelligence experts. We can expect more mature and sophisticated solutions for prediction of network performances and business behaviours. We can also expect highly advanced analytics solutions based on big data globally collected.

9. Consolidation of core networks and services: As most of the operators are taking the consolidation path, installing solutions from the big players for unifying all of the access technologies in a convergent core network and services, we will see more maturity in these solutions for providing easier transitions and additional features to the mix.

Companies to follow

What to see and who to meet during the event, totally depends on your area and your strategy for this year. However, I would highlight the following as the most interesting in my view:

– The big players Google (through its associates), Ericsson, Huawei, Alcatel-Lucent, NSN, Samsung, Sony, Telefonica, Vodafone, etc. are always a must see

– The ones covering the most evolved systems and products AT&T, EE, Oracle, Juniper, Cisco, LG, HTC, Ixia, Spirent, etc. are also interesting to check out

– The smart start-ups Jolla, Spark, Lifx, Stick n find, Smart Things, Cyan, Connectem, Affirmed, Metaswitch, members of the CloudNFV, and a BIG etc….

MWC2014_2

Your list will of course depend on your specific interests. The important is having a clear plan, as the four days typically pass too fast for all the information and space available and you are not just collecting “goodies” in such an expensive show. Also, do not miss the chance to explore Barcelona outside the Fira, as you will find better food, nice people, and a very interesting city.

A. Rodriguez

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Smartphones subsidies, no credit – no problem

Almost all the mobile operators around the world have offered or currently offer what is called smartphonessubsidies”, as a way to attract customers onto buying new handsets at cheaper prices, while engaging them on long-term service contracts with the operator. So this is like buying a smartphone on credit, and of course an exercise to increase the profitability of the handsets for the operator.

Although these offers seem quite positive for the customers, making simple math you can often discover these are not. Taking an example from one of the top carriers in USA, you find buying a subsidised Iphone on a two years contract and a decent plan can cost you at the end: $200 + ($100/month) x 24 = $2600. While a no-contract and no-subsidy Iphone on equivalent plan for the same time could cost you: $650 + ($45/month) x 24 = $1730. So in example you might end up paying additional $870 for buying a subsidised phone.

Subsidy

Beginning of the year T-Mobile changed the strategy with the announcement of ending the handsets subsidies, and of course, AT&T and Verizon among others looked at this move closely trying to understand the strategy (here). To me the strategy was simply trying to differentiate themselves from the competition, by offering “lower” rates on the monthly plans while having the full price for the actual handsets. Think on the tablets market where we all buy these devices at full price with no subsidy, and consider now how successful the tablets’ market is. You would at least agree there is an irony as a tablet functionality is very similar to a smartphone, but the operators do not offer subsidies for these.

Even apart from the simple differentiation fact, the operators in general are eventually seeing how the subsidy model is no longer paying off as expected due to the apparent innovation slowness. As the smartphones are becoming more durable, and as the Sprint CEO Dan Hesse said during a conference this year “…the subsidies just keep going up… the industry cannot afford to upgrade as often…” (here). The situation is even more radical in Europe, where according to a research from Informa Telecoms & Media beginning this year “…almost 30 operators (in Europe) have already dropped handset subsidies for some or most customers…” (here). In this case operators like Vodafone or O2 are replacing the subsidies with financing and leasing plans, much more profitable for the operators and allowing them keep offering latest and originally expensive handsets at low prices. Informa’s analyst Francesco Radicati comments, “The rising cost of devices like the iPhone means operators have to pay increasingly large subsidies to offer ‘free’ phones. Financing allows operators to continue offering phones for a low up-front price without subsidizing them; as an added bonus, it makes it easier to market smartphones to consumers on pay-as-you-go.”

An interesting change will be added when the LTE-only devices are available starting next year. As the voice will be also handled in the LTE chipset along with the data, and no longer requiring the current CDMA chipset for voice, the cost of producing the smartphones should theoretically be lower. Verizon CFO Fran Shammo already made the announcement they would launch VoLTE by the middle of 2014, and that would allow launching the first LTE-only devices (here). The question remains open on whether this would also represent lower handset prices for the subscribers, or not. Whatever the path followed it would seem the handset subsidies have the days counted, and as the corner store’ sign states: no credit, no problem.

A. Rodriguez