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Report from the World Mobile Congress in Barcelona

One of the biggest telecom events in the world, now in its tenth year, the GSMA Global World Congress, is attracting 90,000 visitors this year.

Why are so many people flocking to this event?

Obviously telecoms and mobile in particular, has become one of the biggest industries in the world. Hundreds of billions of dollars are invested every year and the market simply keeps growing. However, that alone is not enough to explain this large number of visitors. The main reason is that, yes, this is indeed one of the most important industries, but nobody actually knows where it can lead to.

It is full of surprises, new technologies and innovations. For companies involved in this industry, just making appointments with their key suppliers in order to stay abreast is not enough, as important new developments could come from totally new directions. So going to Barcelona, to the biggest mobile show on earth, is a good way of looking around and finding out what is brewing.

For the same reason those who depend on the mobile industry are also opening offices in the innovation centres in the world—not just in Silicon Valley and Bangalore, but also in minor innovation centres such as Rwanda, just to make sure that they are not missing out on key innovations.

As an example, m-payment developments are led from Africa and Asia, with 250 services and 100 million users; and in 16 countries there are now more mobile bank accounts than there are traditional bank accounts. An assortment of innovative start-ups are now offering a range of very innovative banking, loan and payment services, simply because the traditional banking sector has missed the boat here. Lessons learned here and the new developments that are occurring could be of critical importance to the financial market elsewhere.

However, innovation is not just a matter of products and services. Far more important innovation is needed on an organisational and a systems level. The future will be about sharing, and business models such as Uber and AirBB have been used by us on many occasions to show what ‘sharing’ really means. In order to grow the market all infrastructure should be shared and interconnected (fixed, wireless, IT, data, etc). All of this should be agnostic and treated as a utility—and on top of this real services can be built that are of value to customers, at prices that are affordable.

Tim Höttges, the CEO of Deutsche Telekom, indicated that from a technology perspective this means that what we will see is: softwarisation, virtualisation, convergence (of infrastructure) and data analytics (connecting different value chains). I would like to add gamification to this, for educational purposes. The end result for customers will have to be that use of services, applications and devices is effortless.

There is a real understanding that mobile, broadband and cloud computing are absolutely transforming whole industry sectors and those who embrace this are in front of the pack (and the various challenges). And they are the ones that are able to reap the first benefits of these changes.

Another absolutely key area is data and the need for connected data management. Currently 90% of data is locked up in silos and proprietary systems and this makes it basically unusable for the new environment we are entering. This is also called ‘black data’. However, as we have discussed previously, new developments are taking place that can unlock this data.

At the Congress all speakers mentioned the massive changes in business models and the need for deep organisational changes in order to enable participation in these changes. The other key areas addressed by all were security, privacy and ‘effortlessness’. The broader industry totally depends on trust—something the telecoms industry is very familiar with—and if those issues are not properly addressed this could severely hamper the growth of the industry. ‘Effortlessness’ was mentioned in relation to intuitive use.

What do customers want from mobile operators?

  • Quality measured in speed, coverage and content (they enjoy digital and they like the way they can now use entertainment)
  • Good value (they are still worried about roaming and accessing mobile broadband)
  • Privacy and security (they want both)
  • Competition and choice
  • Not yet so clear in their minds, but they also want what can be translated into smart cities, buildings, transport, healthcare, education, etc.

(Source: Vodafone at Barcelona Mobile World Congress 2015)

At this event the telco operators obviously also grasped the opportunity to continue complaining about the ‘free ride’ that the OTT players are getting, and they repeated their call to bring the OTT players into the same regulatory environment in which they have to operate.

While most if this is self-serving there certainly are issues moving forward. There is a clash of business models which is not in the interest of the customer nor in the interest of the long-term health of the industries involved. The control that companies like Google, Facebook and Amazon exert is increasing by the day, with very little interest in opening up their systems in the same way they advocate opening telecoms systems. There is still no permission-based system in place that gives customers full control over their data. Furthermore, what are at present different industries are merging deeper and deeper and there is much less difference between telcos, ISPs, broadcasters, OTT companies and other digital internet organisations. A radical review and regulatory reorganisation of this market will have to happen soon.

A few years ago it could be argued that the telcos also would have to adjust and transform their organisations and business models, but several of them are now well and truly engaged in doing that. While significant costs will still have to be taken out of the telecoms business before a true convergence with the other groups can take place, it is now more a matter of when, not if.

By Paul Budde, Managing Director of Paul Budde Communication

Paul is also a contributor of the Paul Budde Communication blog located here.

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