After the tumultuous few years of the pandemic, MWC is back. The energy was high throughout the show and our friends at GSMA put on a terrific event. MWC provides a platform to understand and feel the movements of the tectonic plates. Chetan Sharma Consulting participated in a number of sessions and panels throughout the show. We also had formal and informal discussions with several key executives in the industry – C-Suite to engineers deep into the bowels of technology, policy makers and regulators, startups and participants from across every major geography and industry segment. We also did our usual rounds of the show floor. This note summarizes our observations from the show.
Battle for Narratives
MWC 2023 was a playground for conflicting narratives. For the last six months, there have been a lot of questions about the promise of 5G. The early hype of the technology is meeting its reality moment and the obsession with a “killer app” has shifted the narrative. Despite the change in trajectory of revenue growth, part of which can be attributed to 5G, revenue is hardly part of the conversation. FWA has been a success but there hasn’t been any new consumer service beyond fixed thus far. Enterprise use cases are plenty, but they are unevenly distributed, and the revenue is not available in the financials except from a few operators, so the outside world doesn’t see the progress. Europe has struggled to hit 5G in strides especially when the CEOs lament their financial distress. Operators also have a story-telling problem. Very few are good at it. Geopolitics makes people turn a blind eye to the 5G Industrial progress in China. So, 5G is Rubik’s cube of different narratives and depending on which side you look at, you will find a different answer in the fast-evolving landscape. And then there is the “alternate G theory” by my friend Dr. Seizo Onoe and I. To make sense of the world, one has to become adept at shuffling through the multiple competing narratives in their head at the same time.
Ministerial program
The regulatory and policy worlds are tightly intertwined with the technology and applications ecosystem. I had the distinct honor of participating in the opening session of the MWC Ministerial program with ministers/technocrats from India, Singapore, Denmark, and executives from STC and Qualcomm. We have been advocating the need for a Federal Digital Commission (FDC) to handle the growing need of understanding and regulating new technology areas. Singapore seems to be further ahead in its thinking about developing the right frameworks for tasks at hand.
Connected Intelligence world is accelerating
A decade ago, when we published our first paper introducing the concept of “Connected Intelligence,” it was new and not well understood. It is heartening to see that almost all major brands have embraced Connected Intelligence to the point that it is on their branding materials and CEOs are proudly talking about their role in this ecosystem roadmap. In fact, there isn’t a major company who is not talking about how they are powering the “Connected Intelligence” era.
Private 5G
The case for private networks especially in concert with Edge has always been there. However, the fragmentation, lack of devices, lack of automation, and lack of clarity on the business case has made it a choppy start. However, 2023 feels like some of these problems are getting resolved, there is more education on benefits, more enterprises are willing to try things out, and in general solutions are coming to the market that reduce the complexity of the deployment and maintenance of such networks. Outside of China, NTT and Nokia are perhaps seeing the most traction. AWS is also getting the game with partner agreements and automation strategies. China has more private networks than the rest of the world combined. Regulators talked about assigning new spectrum to private networks for industrial use.
5G Automation
There was a lot of discussion around automation to reduce costs and improve efficiency, but brownfield operators haven’t found a strategy that is sustainable. Rakuten has shown how to do in a greenfield deployment but how one goes about doing with a legacy network will be a key consideration in the 5G decade. It might end up deciding who survives and who thrives.
Marty gets lifetime achievement award
One of the highlights of the show was to see my good friend Marty Cooper receive the lifetime achievement award. He is an industry treasure, and I cherished every minute spent with him last week.
5G monetization
The search for 5G monetization reminds me of the story of Kasturi Mrig (Musk deer) in the Upanishads. The deer chases the smell its entire life without realizing that it is coming from within. To prepare for 5G monetization this decade, operators must look within and rethink their operations, their roadmap, and their strategy. They have to reinvent their thinking about how they approach the ecosystem from here on out. In the story, one day, the musk Kasturi Mrig falls off the cliff and in those dying moments realizes that the mystic aroma was coming from within all this time. Unfortunately, some operators are likely to meet the same fate during the 5G cycle. 50% of the operators think they are highly vulnerable in the 5G cycle.
5G Monetization runs through 4th Wave
We have said before that the 5G monetization story runs through 4th wave. Operators who experimented with 4th wave during the 4G cycle are better placed to build some robust new revenue streams.
Network APIs – how do you spell Déjà vu
The concept of network APIs is old as the Silk road or the Indus civilization – extending the capabilities to spread reach. The wireless industry has tried to expose and monetize network APIs, but those efforts have largely failed. Will nth time be the charm? Ericsson through its Vonage platform and GSMA with its Open Gateway initiative using some universal network APIs are taking another crack at it. This can only succeed if there is wide adoption and indeed commonality amongst the operators across geographies else the need for middleware will arise.
5G Consumer – FWA
In the consumer segment, FWA has been the only story that is scaling in some countries especially the US where T-Mobile and Verizon have grown it into a multi-billion-dollar business.
5G Enterprise – China dwarfs rest of the world
It is widely accepted that 5G will be an enterprise driven cycle. There are plenty of actual deployments (not just POCs and trials) but one has to look. China’s enterprise 5G deployments dwarfs rest of the world combined. While geopolitics has its important role in world affairs, the west shouldn’t ignore what’s happening in China and learn/adapt to their ecosystem.
5G Next – 5.5G and 6G
Most of the attention at the show was on 5G but Huawei talked about 5.5G (or 5G Advanced). Ericsson had a number of technologies that are likely to become part 6G like energy harvesting to power sensors that can be woven into clothes and other fabric materials. The ecosystem must focus on applying 6G to the existing 5G spectrum bands. Seeking to only concentrate on THz spectrum will make the technology niche that won’t scale.
OpenRAN
OpenRAN was one of the hottest topics of the show. In fact, there were just too many vendors claiming to have Open RAN and core offerings and that makes the ecosystem confusing. Operators too have given mixed signals on how they go about nurturing the startups in the space. They must be careful how they engage and provide clarity of their deployment roadmap. Samsung, Mavenir and Rakuten remain the dominant players in the space. India is also pushing for its OpenRAN startups to get traction in overseas markets.
European Operator Consolidation
European operator ecosystem is not in good shape. Years of stasis, over regulation, and high degree of competition has left them vulnerable. Some markets might experience failure in the next 4-5 years and consolidation is inevitable.
Drama around “Fair Share”
Operators in Europe have been pleading to the regulators to provide relief in the form of payments from the Internet players who they claim are taking the spoils but not contributing to building the infrastructure. On its face, the arguments lack logic and operators don’t themselves believe anything of substance will happen. It is mostly a leverage play and a distraction. However, the flipside is that the desired world of “metaverse ready networks” will never arrive if something in the capex/opex calculus changes. Industry must find creative technical/business solutions rather than seeking regulatory remedies.
Hyperscalers in full force
Amazon, Google, and Microsoft were at MWC in full force to signup operators on their public cloud or deploying some functions in the private cloud.
Convergence battles
The traction of FWA is accelerating the discussion around convergence and consolidation. What’s the end state of the communications industry – how many players are enough or too many? What’s the best to manage competition in a given market? Should foreign entities be allowed to buy critical infrastructure players? What is too big to fail? Regulators have to be very careful how they handle some of these questions this decade.
Qualcomm handset demo
Perhaps the coolest demo was from Qualcomm. They showed stable diffusion running on a standard Android mobile phone and rendering a midjourney type image in less than 15 seconds by running the model directly on the device. This changes how we think about distributed compute for AI.
Focused startups
The startups in the mobile ecosystem continue to innovate. Some notables – Aira, A5G Networks, Opanga Networks, Cohere, Arrcus, Willet, Transcelestial, and others. 4YFN continued to be the buzziest hall.
India is a big story
Under PM Modi, India has done a good job of telling the India story. This has flowed down into the various ministries which represent different industries and secretaries are getting quite adept at making a strong case for investing in the Indian ecosystem. The 5G deployment in India started in Q4 and will be mostly done by the top 2 operators by Q1 2024. It is also following the China model of building out its startup and infrastructure ecosystem for domestic use first before making it an export industry.
Metaverse’s weak presence
In early Q4 2022, Metaverse was the hottest tech in town, but it was just not part of the conversation at MWC. There were some minor demos but nothing that captured the imagination of the attendees. The metaverse narrative has done a complete 180 in a matter of a couple of months. There are a lot of issues with Metaverse that need to be sorted out and it will take a few years before we are anywhere near scale. Chief Metaverse Officers will probably give way to Chief GPT officers. There were number of AR glasses at the show, but they are no where near meaningful commercialization. Everyone is waiting for Apple to show the way.
Talk of mmWave has cooled down
Most of the focus was on the midband. mmWave continues to face a challenging landscape though enterprise use cases are gaining traction.
AI dominates
ChatGPT has taken the tech world by storm. AI and telecom was a big topic at the show. Operators are looking at ways to incorporate AI in a range of operations from customer service to network operations, from traffic management to customer acquisition.
Synchronous S-Curves
We have talked about the power of synchronous-S curves and how they influence each other to create the magic of disruption. After seeing some really cool tech, we remain convinced that the synchronous evolution of multiple exponential technologies will shape this decade.
Satellite
More discussions around integration of satellite with terrestrial networks for both niche use cases as well as broadband availability for urban/suburban/rural areas.
New concepts
Lenovo had a cool rollable screen demo for smartphone and laptop. While we are years away from commercial introduction, it is great to see vendors pushing the boundaries on devices.
Sustainability
While there were some discussions about sustainability, it was just the rehash of old ideas and concept and overall, there was less substantive discussion. The only exception was the use of AI to reduce the energy budget given the European operators have seen their energy bills rise tremendously.
Booths: Huawei again had the biggest booth followed by Ericsson and Nokia. The spaces were filled with use cases, technology showcases, feature roadmaps, etc.
Parties: NTT and PwC have become the hosts of the most exclusive parties and dinners at MWC.