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This is Strand Consult’s 20th year of coverage of the Mobile World Congress (MWC). This pre Research Note covers the event’s themes and keynotes and offers critical reflections of the important annual gathering of the global mobile telecom industry, expected to gather 80,000 attendees both online and in person. While up from last year’s 61,000 people, this is still shy of the pre-pandemic level of 109,000 participants.
The founding of the MWC occurred as the industry transitioned from analogue to digital, and mobile phones turned from luxuries into mass market goods. Today’s paradigm shift entails the policy development to enable the post-pandemic, post-industrial, networked information economy. MWC will feature thrilling presentations about 5G networks and beyond that deliver new smart services like advanced manufacturing, remote surgery, vertical take-off taxis, and virtual reality – a global opportunity approaching $1 trillion by 2030.
However the ongoing challenge for mobile operators is to grow shareholder value. While mobile networks driven tremendous value to the economy, average revenue per users (APRU) has been declining for mobile operators around the world for years. The benefits of mobile networks have flowed disproportionately to the third party services built on top of networks, not the network owners themselves.
See John Strand’s keynote on broadband cost recovery on Tuesday, February 28 at 16.20 in KOTRA Hall 7, stand 7A62. He will be joined by leading policymakers from South Korea including Minister of Science and ICT Lee Jong-ho, Congressman Cho Seung-re, Korea Telecommunications Operations Association Vice President Sang-Hak Lee, President of the Electronic Times Byung-jun Kang, Head of GSMA Northeast Asia Tae-Kyung Kim, and internet policy expert Dae-Keun Cho.
Read Strand Consult’s previews of the Mobile World Congress (MWC) from prior years.
2023 MWC Overview and Highlights
The MWC 2023 themes are 5G Acceleration, Reality+, OpenNet, FinTech and Digital Everything. GSMA’s CEO Mats Granryd will open the conference in the “Vision of An Open Future” keynote and will likely discuss the mobile industry’s evolution and its many contributions to the world.
The highly-anticipated keynote of Orange’s CEO Christel Heydemann will likely recap the speech she gave recently at Orange’s Capital Market Day in which she detailed that the future for Orange is not in the launch of new headline-grabbing apps but rather “operational simplification” and “infrastructure regeneration with a younger “next-generation network.”
Mobile operators will also detail that they need better regulatory conditions so that they can invest in networks. Of course, they want to improve returns for shareholders. However these same leaders knowing this for years, have also not changed their business models and the way they run their organizations. None of them can say they did not know and regulation made them helpless. Infrastructure sharing has been around for a long time. The right regulations is important on the other side great leadership is more important.
Consider Vodafone. Its many CEO‘s has enriched themselves, but not necessarily shareholders. Indeed, destroying shareholder value on a scale seldom seen in the industry. Management now claims the market is competitive, subscale and infrastructure investments need to be shared amongst fewer players hence in market consolidation is the answer. Although the thinking is correct, this has been the situation for many years & to use this now as an excuse for lack of leadership and underperformance is disingenuous.
Vodafone Group Interim Group CEO & CFO Margherita Della Valle will speak; she has had to date the unenviable task of reporting the miserable numbers produced by various CEO’s most recently Nick Read, who has just left the company after many years at Vodafone. Including CFO and being promoted to Group CEO after overseeing the dismal performance of the UK business. He may not be blamed for all what has happened previously, but he has been part of the group for many years and failed to get to grips with what is really required to turn Vodafone around.
The company has been significantly underperforming in its core markets (Germany – Spain-Italy- UK) for a significant time. The UK being its core original market where it beat the incumbent being a prime example. Vodacom Africa is the best performing business of the group although it is only partly owned by Vodafone and separately listed. This an answer to the question what value the group structure adds to that performance if any or if it is performing so well because of the lack of involvement. India has been highly value destructive, Turkey remains struggling, and the rest of the small assets are not significantly contributing to the overall picture and may well take up management focus. Greece, Portugal etc. Netherlands is a JV.
Vodafone’s next CEO will probably be another polished corporate type. This is not likely to improve the outlook. Vodafone needs a “cleaner” like Harvey Keitel “The Wolf” Wolfe in “Pulp Fiction.” not a Meryl Streep “Mama Mia” type, If Vodafone´s board want´s a Meryl Streep they must go for “The Iron Lady”
There will be a lot of mobile operators talk about their green energy policy, maybe to a fault. While advanced mobile technologies are critical for the so-called green transition, the promised gains whether in lowered costs, reduced emissions, or higher profits are yet to be seen.
Lockheed Martin, Chairman, President & CEO, James Taiclet will share the stage with Raymond Dolan Chairman & CEO, Cohere Technologies to talk about the use of OpenRAN. It’s interesting that the featured reference customer is not a mobile network operator, but an aircraft maker. This discussion will probably not mention the role of Chinese government players in the O-Ran Alliance and the specification process.
GSMA also includes sports stars and celebrities to spice up the keynotes. Last year Joan Laporta President of FC Barcelona addressed the group. The club was infamously $1.57 billion in debt and had just released Lionel Messi because it could not pay his contract. This year’s star speakers are father-daughter race car driver duo Carlos and Laia Sainz.
The Ministerial Programme
Much of the important communication at MWC is not public at all, but rather in the closed door GMSA Ministerial Programme, which seems an irony for an event which bills itself on the “open future.” One cannot buy tickets to the Ministerial Programme and only a select few are invited to discuss the conditions for how the industry is regulated. While confidentiality is important under certain circumstances, there are limits. The more transparent mobile industry regulation becomes, the better it is for shareholders, mobile operators, customers, and voters. In fact, GSMA should live stream the Ministerial Programme.
European Union Commissioner for the Internal Market Thierry Breton will likely talk about the launch of the European Commission consultation on the future of the connectivity and infrastructure and “need for all players benefitting from the digital transformation to fairly contribute to the investments in connectivity infrastructure.”
One GSMA Ministerial Programme speaker is also Denmark’s official “Tech Ambassador” to Silicon Valley, Anne Marie Engtoft Larsen. Her job is to schmooze with Big Tech and dignify their corporate campuses as countries. However US tech policy regulation is not made in California, but rather 4500 km (2.00 miles) away in Washington, D.C. A controversial position among experts, the tech ambassador is called by Denmark’s highest paid tour guide to California.
During the last eight years as Commissioner, EU Vice President Margrethe Vestager has not been to Silicon Valley once. However Vestager is frequently in Washington D.C. Her spokesperson Christina Holm-Eiberg says, “The political dialogue typically takes place based on where the political power center lies, and that is in Washington”
The Leadership for Future Connectivity panel features 10 speakers including representatives from the United Nations, the US Federal Communications Commission, Spain, Benin, and India. The only mobile operator is Vodafone, represented by Joakim Reiter, Chief External and Corporate Affairs Officer. This man has crisscrossed Europe to convince policymakers that there is no increased risk with using network equipment from Chinese players like Huawei. Strand Consult, among others, disagree.
DEI, CSR, and the rest of the acronyms are also big at MWC. These are interesting and important developments, however, GMSA should showcase whether and how the policies are realized in places like China, Russia, Iran, and so on.
One exciting panel will likely be Network Investment: Delivering the Digital Revolution featuring Deutsche Telekom, Meta, Netflix and the South Korea’s Minister of Science and ICT. These parties are engaged in major lawsuits and legislation about cost recovery. Strand Consult has detailed cost recovery policymaking in South Korea and the various lawsuits brought on by Meta and Netflix.
Another interesting panel is Cybersecurity in an Evolving Digital Ecosystem featuring Orange, MTN, Nokia, Mastercard, Google and ministers from Bahrain and Ecuador. This will likely focus on data breach and the financial impacts of cyberattacks.
There will be many exciting presentations. Critical listeners are likely to get important information to be wiser and more successful.
China and Huawei send the finger to Joe Biden
Huawei is a major sponsor of MWC and its presence is omnipresent: they have the largest exhibition stand, placards, audio-visual communications, and so on. This is likely designed as big middle finger to Joe Biden and to demonstrate (however real or perceived) that US policy has zero impact on Huawei’s global business.
The Chinese government issues successive plans about self-sufficiency but then complains about being the victim of a trade war. It also likes to brag about its technological progress and advanced electronics. However the claims of supremacy did not hold up with the recent balloon fiasco, which China explained by saying they “lost control” of their objects which flew over Canada, USA, and Costa Rica, Colombia, Venezuela etc. Either the balloons are of poor quality, or the Chinese are poor navigators.
At MWC, Xin Dong, President & CEO of China Mobile will likely talk about 5G networks, the growth of cloud services, and how VR and AR applications are changing how people engage in the world. He will probably not discuss how China Mobile partners with the Chinese government to deliver the surveillance society in China.
Like IBM transformed itself as a computer hardware company into a service provider, Huawei will say its transitioning as a network equipment vendor into an IT software and service company which can deliver everything from mobile networks to smart cities to smart devices and clouds. Indeed Huawei and some 140 Chinese companies will use MWC to remake their image. Strand Consult has examined Huawei’s corporate communications strategy in this report “Fact Check: 10 Myths That Drive Huawei’s Media Narrative”
Image makeover or not, Chinese data practices have not changed: any data collected on any Chinese made device or service any where in the world at any time can be acquired by and for the Chinese government. Should one want to build and run a digital dictatorship, Huawei is the best friend you can get and can serve all your needs. Its reference customer is Secretary General Xi who runs the world’s largest surveillance society. While it is prestigious in China to work for Huawei, the bloom is off the rose in many other countries. Indeed many have found their employment in the company career-limiting.
For an insightful speaker, GSMA should consider an important government affairs professional who now lives in Barcelona who works for International Crisis Group, a transnational, independent, non-governmental organization focused on preventing and resolving deadly conflict: Michael Kovrig. This former Canadian diplomat who was arrested without charge and jailed for 1,019 days in China following the arrest of Huawei CFO Meng Wanzhou for selling sensitive equipment to a hostile government via its affiliate.
Strand Consult’s focus
Strand Consult’s focus has been and always will be on impact of policy for mobile operators’ shareholders and relatedly, improving the business case for networks with optimal spectrum, infrastructure, and technology policy. Strand Consult employs a global team of experts across various field to help mobile telecom operators navigate a complex, changing world. In its 26-year pursuit and publication of valuable knowledge, Strand Consult has stepped on some toes. However, Strand Consult’s job is not to make people happy, but to collect the facts and tell the truth. Strand Consult comes to Barcelona looking for answers to its many questions.
Broadband Cost Recovery
Among the areas of Strand Consult’s expertise is broadband cost recovery, the process to recoup the expense of building and running a broadband network with an accurate assessment and attribution of its use. With the asserted gaps in connectivity, policymakers are rightly concerned about the future and how to recover the costs of building and running networks. Strand Consult’s reports provide valuable information about the costs to build and run networks, the business models proposed to recover costs, and the policy needed to realize expectations for broadband.
Effective broadband policy ensures that all people can access the internet and that networks evolve to serve a wide range of services. Most people in the developed world can access a basic set of internet services, but policy could be improved. The Covid pandemic increased the urgency for universal broadband as people had to learn, work, and receive healthcare from home. More largely, the internet increasingly drives the economy and productivity and is becoming the key medium for the delivery of government services. Ensuring essential social benefit services online may be frustrated by the proliferation of video streaming entertainment, the pricing and policy of which takes de facto precedence. Thierry Breton Commissioner for the Internal Market, European Commission will likely speak on this topic at MWC.
Strand Consult introduced the discussion of how Metaverse will affect mobile network traffic and cost recovery in its research note.
John Strand will speak on broadband cost recovery with leading policymakers from South Korea on Tuesday, February 28 at 16.20 in KOTRA Hall 7, stand 7A62.
Net Neutrality
Unlike CTIA in the USA, GMSA has not been successful to address the demonstrated harms of hard net neutrality rules in the Europe. Only Ofcom in the United Kingdom has dared to look at the empirical evidence. After 7 years of the policy on the books, Ofcom concludes that large content application providers disproportionately benefit. They assert that things could be better for consumers and that there could be more incentives for mobile operators to invest. Strand Consult reviews the UK policy and proposals to modernize policy in its report “Net Neutrality regulation is failing UK consumers, innovators, and investors”. It finds that no leading 5G nation has hard net neutrality regulation. Indeed 5G leaders have either soft or no net neutrality rules. The report includes case studies of South Korea, Japan, USA, Australia, New Zealand, and South Africa.
Mergers
Strand Consult has analyzed 4-3 mobile mergers for many years across the world. Its research project “Why four to three mobile mergers fail” offers new research and powerful facts about mobile industry consolidation in USA, EU, and around the world. Strand Consult’s goal is to lift the level of merger review in quantitative analysis, improve the credibility and transparency of antitrust decisions, and protect agencies from regulatory capture. Companies need to be smarter in their consolidation strategies; antitrust authorities need to improve their toolsets and measurement techniques; and policymakers need to modernize the standard of review. It appears that Margrethe Vestager may change her view on earlier pronouncement against in-country mergers.
OpenRAN
OpenRAN will likely be highlighted again at MWC; this time in a debate format. However, there is no need for debate; the facts speak for themselves. Some 243 mobile operators in 95 countries have already launched 5G networks using the standards of 3GPP 5G RAN. That is to say that there are little to no commercial success stories of OpenRAN amongst the world’s mobile operators. Strand Consult has published a series of reports and research notes on OpenRAN which provide valuable questions and tools for policymakers and operators to discern effective technology from hype.
GSMA will feature a discussion on security in open networks. However important this topic, it is not clear whether that session will highlight the many reports that government authorities and academics have published on this topic. It is helpful to compare and contrast security approaches. The EU’s 5G security tool box should be mentioned.
Questions that should be asked
While GSMA has proposed an exciting agenda for MWC, there are still some issues and topics not addressed. Strand Consult compiles the following topics and associated questions.
- What went wrong with the technologies that were previously at MWC but never came to fruition: RCS, OneAPI, UMA, DVB-H, EMS, Video calling over 3G etc?
- Just 4 of 26 board members of GMSA are women. Of those, only two are CEOs. GSMA has hosted a Women in Mobile program for years. How is it that working (or not) to bring women into leadership positions across the industry?
- The mobile telecom industry creates tremendous value for customers and third parties, but network owners have not fared so well. Why should we expect mobile operators to continue to invest when ARPU is declining, regulators refuse to allow consolidation which can reduce cost, and government impose deterrents to investment?
Mobile World Congress is big business for the participants, Barcelona and GSMA which runs many conferences through the non-profit entity GSMA Ltd., which before the pandemic had a yearly turnover of $ 228 million. With these revenues, GSMA covers most of the costs of the GSMA trade association. Because the MWC generates so much revenue from sponsors and exhibitors, GSMA is essentially financially independent of its actual mobile operator’s members, which ostensibly provide the governance of the association.
There will be many interesting discussions on 5G, OpenRAN, AI, security, and transparency. If not for the exciting MWC events, Barcelona never disappoints with food.
Strand Consult provides both pre and post review of the Mobile World Congress. Read reviews from the past 20 years.
Meet Strand Consult at the Mobile World Congress
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