The year is 2019 and 5G is finally here. Or is it?

At MWC19 Barcelona, there were so many 5G announcements that it seemed the technology’s arrival was clearly upon us, or at least imminent. And, in fact, we now have two countries with commercial consumer 5G launches: the US [1] and South Korea [2]. Of course, in both cases the launches are limited in terms of coverage as well as the number of supported devices. And with services aimed at mass market consumers, the enterprise opportunity has yet to prove itself.

As we move further into 2019 (and then 2020), we’ll get more 5G devices and more operators ramping their 5G plans.

China Mobile is set to launch 5G in the second half of 2019, with China Telecom and China Unicom to follow in 2020. Japanese operators are also set to launch 5G in 2020, including the new operator Rakuten, which will undoubtedly disrupt the market and try to use the technology to grow its market share.

Combined, these early launches will generate significant knowledge and give more courage to other operators to follow the 5G pioneers. At the same time, new devices and spectrum should boost adoption of the technology and accelerate deployments…and therefore 5G spend.

That’s right, 5G will require more than just spectrum and devices. It will take capex spend.

So how much are we talking about?
In our newly expanded 2025 capex forecasts (to be released this week), we predict operators will spend over $1.3 trillion over the next seven years on networks. The bulk of that (75 per cent, or a little less than $1 trillion), will be allocated to 5G. The rest will primarily go into upgrading and expanding 4G networks, which will continue to coexist alongside 5G past the end of our forecast period. With 4G, the monetisation strategy was more or less clear: charging more for data, either per MB, or by increasing the size of data bundle. In reality, this strategy didn’t pan out and generate an ARPU uplift in all markets. By contrast, 5G, offers a more complex system, where the combination of multiple technologies serves a set of diverse, varied, complex monetisation scenarios: that fact will weigh on capex.

What’s the catch?
To its credit, the industry has concluded there will be no single killer app for 5G and operators will have to find an individual approach to revenue generation. This means 5G networks will have to be built in a modular way, to offer customised services, along with scalability. At the same time, operators will have to maintain a capex-to-revenue ratio low enough to keep investors happy. With all this factored in, it would be fair to say the global 5G investment cycle will be more gradual than the 4G one: capex will be spread out, with the global capex-to-revenue ratio not exceeding 18.5 per cent.

So what should the money be spent on?
One thing is for sure: 5G will require more network densification, which means a lot of investment will go into RAN. In fact, we forecast the share of RAN in total capex will grow from 62 per cent in 2018 to 86 per cent in 2025 (see chart, below, click to enlarge). In part, this is a function of densification. In part, it’s because many operators in the early 5G launch markets already have fibre in place to support the upgraded RAN, and many of the rest should also have sufficient backhaul already given that global 5G adoption will still only be around 16 per cent in 2025.

That said, it is important to mention that the distribution of core and RAN investments will vary regionally, depending on the core network development level in each country and individual operator. While we do not expect the share of sites connected via fibre backhaul to grow significantly before 2025, once 5G networks are up and running operators will have to think about investing into their transport networks to be able to increase their capacity.

[3]Are there any ways to spend less?
NFV, SDN and Cloud RAN offer a way to roll out and upgrade equipment faster, with fewer people needed to maintain it and less physical space to deploy it. They promise easier and cheaper ways of switching between vendors, without the need to replace hardware supplied by one vendor to install the other. Meanwhile, network sharing can be a solution to costly RAN densification, especially in rural areas, where RoI is usually lower.

Some countries are even discussing the option of having one neutral host deploy 5G and wholesale it to other mobile operators. A neutral host could be a particularly viable option for countries with low ARPU and where operators already have a high net debt-to-EBITDA ratio.

Weighing on all 5G capex considerations is the fact that the overall business case for 5G is still unclear. And while multiple use cases present opportunities for operator revenue growth, the risks of failing to realise that growth remain significant. Ultimately operators will need to build their 5G networks according to the specific opportunities and constraints in the markets where they operate.

To that end, the number of different models for deploying and therefore financing 5G could run as high as that of the services it will eventually support.

– Alla Shabelnikova – senior analyst, Financial Data, GSMA Intelligence

The editorial views expressed in this article are solely those of the author and will not necessarily reflect the views of the GSMA, its Members or Associate Members.

[1] https://www.mobileworldlive.com/featured-content/home-banner/verizon-stakes-5g-claim-with-mobile-launch/
[2] https://www.mobileworldlive.com/featured-content/home-banner/korea-operators-set-consumer-5g-tariffs/
[3] https://www.mobileworldlive.com/wp-content/uploads/2019/04/GSMAi_RAN_Core_Capex_Breakdown.png

April heralds the start of the new fiscal year in many countries around the world, when various new tax rules come into place.

One example of a country that has been grappling with new taxes is Romania, where the so-called greed tax ordinance was implemented earlier in the year: it targets bank assets, energy companies and mobile operators. Romanian mobile subscribers will see bills go up as a result of the 3 per cent tax on all telecom operators’ turnover.

This is just the latest in a longer-term trend on mobile sector taxation.

The mobile sector continues to see further taxes added on by governments in an effort to maximise fiscal revenues. Governments across the world have introduced or increased 120 taxes specific to the sector since 2011. As of 2017, 1.5 billion mobile subscribers in 60 countries were subject to some form of additional taxation on top of general VAT or sales tax: that’s almost 30 per cent of mobile subscribers worldwide.

While this might seem like abstract data, there are real consequences. Here are some of the more worrying developments in mobile taxation (you can find more in our recent Rethinking Mobile Taxation to Improve Connectivity report [1]).

Uganda: social media tax
In 2018, the government introduced a tax of UGX200 ($0.05) to use many online platforms including WhatsApp and Facebook. The Ugandan regulator recently reported that, as a result, internet subscriptions fell by 2.5 million in the three months after the tax was introduced.
Sri Lanka: tower tax
Original plans for a tower tax in late 2017 included an LKR200,000 ($1,144) tax per tower every month. These plans were watered down by the time the tax was implemented in January 2019: the monthly rate became the yearly rate. Nevertheless, taxing towers will no doubt reduce incentives to roll out networks.
Turkey: activation taxes
Getting access to a new phone connection has been difficult for a while now: consumers in Turkey pay three different charges before the first MB of data is downloaded. But these charges, the special communication tax, wireless licence fee and wireless usage fee, are inflation-linked and now add up to TRY98 ($17.22) just to get started for the year. It’s no wonder consumer taxes account for more than 60 per cent of the cost of owning a mobile in Turkey (and on top of that there’s a number of operator taxes there including a 15 per cent revenue share).

These additional (and complicated) taxes aren’t good for developing a mobile market. Need proof?

Since taxes increase the price of owning and using a mobile phone, fewer people are able to afford and use mobile internet services. Charting out the results, we see that consumers in high-tax countries (with red dots in the chart, below, click to enlarge) are charged more than 3.5 per cent of their income in taxes on mobile. In these same countries, mobile internet penetration never exceeds 30 per cent.

[2]Of course, there is a reason many developing countries impose high tax burdens on the mobile sector.

Where debt levels are higher, governments reach for additional tax payments on the mobile sector to try and fill the fiscal gap. Where that debt is due to be paid back soon, governments’ requirements are even more pressing. And mobile transactions of all types are tempting to tax: the International Labour Organisation estimates 2 billion of the world’s employed population are in the informal economy, with 93 per cent of these workers in emerging and developing countries. Collecting taxes from a significant informal economy is difficult. On the other hand, mobile transactions such as buying SIM cards, handsets, and prepaid top-ups can be identified fairly easily, and therefore are easier to tax.

But, as much as this strategy might be popular or easy, it’s a mistake for two key reasons.

Taxable base decreases
Higher taxes means lower take-up and therefore a decrease in the taxable base, the number of people you are able to tax. So gains by governments in terms of increasing tax rates can be eroded by the lower number of people using mobile.
Mobile services can help in formalising the overall economy
Person-to-government (P2G) payments using mobile money can be used to collect general taxes from citizens; school fees; health payments; and other official payments, and therefore increase the taxable base. P2G payments are now available in over 30 markets.

Inevitably, the debate on mobile taxation will continue with the short-term fiscal requirements of governments being pitted against longer-term sector and economic development.

At the same time, governments are developing ambitious digital economy plans. Mobile operators are being asked to simultaneously take on the burden of generating significant tax revenues and invest heavily in infrastructure. Maintaining both roles might turn out to be unsustainable.

– Mayuran Sivakumaran – senior economist, GSMA Intelligence

The editorial views expressed in this article are solely those of the author and will not necessarily reflect the views of the GSMA, its Members or Associate Members.

[1] https://www.gsmaintelligence.com/research/2019/02/rethinking-mobile-taxation-to-improve-connectivity/730/
[2] https://www.mobileworldlive.com/wp-content/uploads/2019/04/GSMAi_MobileOwnershipCosts.png

In just about a week, I’ll be headed to China. It will be my second trip to the country this year, with one more planned in June. You might ask why I’m headed there so much? It’s a fair question, one I’ve asked myself on more than one occasion even though the answer is fairly straightforward.

Let’s start with the specific events I’m headed to. June brings MWC19 Shanghai and last month was a quick trip to Beijing to talk up what happened at MWC19 Barcelona along with launching our latest research on the Chinese market.

I talked a bit about the trip in one of our Data Point videos [1] last month and you can find the Mobile Economy China report here [2].

Both of these point to a very simple reason for all the 12-hour flights: China is an important mobile market. This is so patently obvious that it feels silly writing it out. But, whether we’re talking about 5G launches, IoT scale or the innovation that comes from a society with 1.1 billion smartphone subscribers, the importance of China as key to understanding the direction of mobility is clear.

And the trip that’s coming up? That’s my annual visit to Huawei’s analyst conference. I’ve been to every one of these for more than a decade. Skipping out on the chance to catch up with the vendor (or any of its major competitors) never feels like a wise decision. But, if “China is important” explains the other trips, a visit to Shenzhen raises an obvious question. Why is Huawei important?

This, too, might seem blatantly obvious. Given the amount of news circulating around the vendor lately and a plea for “fact-based” judgements on it, it’s still worth highlighting some basics.

Operator market share
We don’t model network infrastructure market share at GSMA Intelligence. That’s okay, there are plenty of other people who do. My friends at Dell’Oro Group have Huawei capturing 29 per cent of the telecom equipment market in 2018, the top position, with Nokia and Ericsson taking a distant second and third, respectively. In other words, you can’t talk about the state of telecom networks in 2019 without talking about Huawei.

Mobile market presence
Of course, telecom networks market share and mobile infrastructure market share aren’t the same thing. So, let’s look at this a different way. How many mobile networks is Huawei present in?

The company claims to have supported 5G tests with 182 carriers. Does that seem high? It shouldn’t. Our own analysis of network launch announcements has Huawei touching more than one-third of operator 4G launches, over-indexing in some markets like Europe. That means you or someone you know is likely touching a Huawei-powered wireless network on a regular basis (US readers excepted).

Operator revenues
Over the past five years, Huawei’s carrier business revenues have grown by almost 80 per cent. The figures for key competitors? Let’s just say they’re not quite that solid.

I’m not sold on the idea that revenue success points to product superiority. However, it does support R&D scale and the financial stability operators like to see when making an investment that needs to live for ten or more years.

End-to-end capabilities
Another idea I’m not sold on? That end-to-end capabilities always help to win deals. Maybe for smaller operators which need a one-stop shop or a bundle of base stations and mobile devices. But Ericsson does pretty well for itself without smartphones to sell and Cisco manages to sell into mobile operators without a base station portfolio.

So why does end-to-end (in this case network infrastructure, consumer devices, and enterprise gear) matter? In part, because diversification helps with financial stability. In part, because these disparate spaces are converging as operators look to build networks on IT technologies and build services that more directly touch the consumer (think smart home, gaming or AR/VR). Know-how that touches all three spaces is an inherent advantage.

So, is there anything else I’m forgetting?

Oh yeah, that security thing and Huawei’s recently released 2018 annual report.

As we said in our MWC19 Barcelona wrap-up [3], “5G is increasingly positioned as ‘critical infrastructure’ given its potential for societal digital transformation. The critical nature means that 5G security is paramount”.

In other words, while mobile network security has always been top of mind, nobody should have been surprised by the elevated focus on 5G network security. And, as we talked up the possibilities the technology brings, and the scale benefits of a single ecosystem, we should have all been able to predict the stakes at hand and the potential impact of banning any major network vendor from 5G deployments: delayed service rollouts; the cost of replacing existing network assets; potential global R&D contraction due to constrained competition; and potential global technology scale impacts.

It’s a doom and gloom scenario, for sure. But Huawei’s latest annual report provides some important context. Among all the data in it, a few points stand out.

After years of double-digit growth, Huawei’s carrier business had a tepid 2017 (growing 2.5 per cent) and a worse 2018 (shrinking 1.3 per cent). As a result, the company’s consumer business suddenly became its biggest money maker [4], accounting for 48 per cent of revenues.

Meanwhile, the Chinese market has steadily grown in importance for Huawei: where it was 35 per cent of revenue in 2013, it’s now almost 52 per cent. Combined with EMEA, the markets generate 80 per cent of Huawei’s sales.

What’s the story here? That the ascending importance of consumer and Chinese markets will impact how Huawei looks at its business strategy and how best to deal with security concerns? Retrenching on the easier wins?

To date, there’s been no indication of a pullback. And, here, another highlight of its 2018 annual report is worth noting

In 2016 and 2017, Huawei kicked off its report by answering three questions: who is Huawei; what do we offer the world; and what do we stand for? In the latest document, it added a few new questions: who owns Huawei; who controls and manages Huawei; and who does Huawei work with?

The additions send a clear message: Huawei wants to signal that it operates around the world, as a private company with “no government agency or outside organisation” holding shares. A pullback wouldn’t benefit anyone. Not Huawei. Not its carrier customers with “1,500 networks in more than 170 countries”. Not the global standards organisations it supports.

Of course, this is a message it’s been sending for some time now. How that message evolves in the face of commercial and political progress on 5G is the key question. And it’s why I’ll be in Shenzhen later this month.

– Peter Jarich – head of GSMA Intelligence

The editorial views expressed in this article are solely those of the author and will not necessarily reflect the views of the GSMA, its Members or Associate Members.

[1] https://twitter.com/GSMAi/status/1106534553286569984/video/1
[2] https://www.gsmaintelligence.com/research/2019/03/the-mobile-economy-china-2019/743/
[3] https://www.gsmaintelligence.com/research/2019/03/mwc19-barcelona-beyond-the-headlines/736/
[4] https://www.mobileworldlive.com/featured-content/home-banner/huawei-profit-jumps-despite-dip-in-carrier-business/

At the GSMA’s China Week this year, stakeholders from the technology, media and telecommunications industry met in Beijing to engage and debate, and to reflect on key takeaways from MWC19 Barcelona.

Though I was unable to attend in person, the event also marked the culmination of a recent project of mine, with the launch of GSMA Intelligence’s (GSMAi) Mobile Economy China 2019 report. Here, we discuss major issues for the country’s broad mobile ecosystem, including operator financials; 5G; e-commerce; blockchain; and AI.

Mobile consumers have helped create a huge online marketplace
Chinese mobile users are enthusiastic social networkers and many are active on IP-based messaging apps. Tencent’s WeChat is now used by more than 1 billion people every day. China is also home to some of the most avid participants in e-commerce globally: the latest GSMAi Consumer Survey shows 69 per cent of smartphone owners use their devices to purchase goods or services online every month, with an additional 16 per cent doing so less frequently.

More significant, however, is how the intrinsic link between consumerism and the smartphone has established China as a contactless superpower. The main mobile apps are typically multipurpose platforms, offering travel booking and gaming, and incorporating digital wallet services (for example Alipay and WeChat Pay), which are now accepted in most bricks-and-mortar retailers. Some 81 per cent of smartphone owners use their devices for contactless mobile payment technology at least once per month, a substantially higher proportion than in some digitally advanced markets (see chart, below, click to enlarge).

[1]

Consequently, China has become the world’s largest market for B2C e-commerce, with a turnover of RMB1.7 trillion ($253 billion) in 2017, a 30 per cent annual growth rate. For Chinese consumers, Singles’ Day on 11 November is the year’s largest online shopping day, with sales valued at more than Black Friday and Cyber Monday combined.

It was adopted first by Alibaba in 2009, which racked up RMB213.5 billion on its e-commerce platform on the day in 2018.

Looking ahead, mobile data traffic growth will support greater use of online payment platforms and further development of the Chinese digital commerce market. In particular, growing smartphone adoption in rural areas and the extension of 4G services to the most remote communities will see more transactions conducted here, while also delivering benefits for social, economic and financial inclusion.

Wireless broadband connectivity enables the digitalisation of sectors, which can lead to increased efficiency and productivity, and positive knock-on effects for the wider economy.

Targeting AI dominance by 2030
With IP-based communication, social networking and e-commerce prominent features of consumers’ mobile experience, the government’s focus is elsewhere. It is aiming to weave AI into the fabric of Chinese society, which it views as a strategically important technology for reinvigorating traditional industries and for future national prosperity. In 2017, China published its three-stage Next Generation Artificial Intelligence Development Plan, which recognises the need to first achieve parity with the US. The second phase focuses on formulating legislation and making breakthrough applications of AI in various sectors by 2025, after which China is aiming to achieve global AI leadership during the third five-year period.

In light of this initiative, China’s tech companies are recruiting and investing heavily in AI. Consider just a few high-profile examples:
– Baidu is looking to develop and commercialise AI across several verticals, for example, the Apollo project for autonomous vehicles.
– Through the Damo Academy, its R&D arm, Alibaba is also working to produce its first in-house AI chips and quantum processors.
– One of Tencent’s major AI priorities is healthcare, where it is using data to help train AI algorithms for the development of virtual healthcare assistants.

Chinese mobile operators are also recognising AI’s strategic importance for future business and digital transformation, as well as driving autonomous and intelligent networks. China Mobile and Nokia are researching the use of AI and machine learning for 5G network security and reliability. China Telecom is working with Nokia and Intel to develop an AI-supported cloud network for the delivery of mass-market services with extremely low latency, while China Unicom is serving as deputy directing unit of the AI Industry Development Alliance of China.

The government hopes these investments and partnerships will combine to create a domestic industry worth RMB1 trillion by 2030. However, as applications of AI multiply and the technology matures, potential pitfalls have emerged. Facial recognition is raising questions around privacy and surveillance, while there are challenges to determining the liability and responsibilities of people and algorithms in self-driving cars.

These concerns are not unique to China and will require all countries to engage with AI’s ethical dimension, an area where the European Union is already making progress. Given that the impact of AI will be felt around the world, it is incumbent on all members of the global mobile ecosystem to coordinate and collaborate to embed the right values and governance framework at the centre of the AI debate.

 – James Robinson – Senior Analyst, GSMA Intelligence

The editorial views expressed in this article are solely those of the author and will not necessarily reflect the views of the GSMA, its Members or Associate Members.

[1] https://www.mobileworldlive.com/wp-content/uploads/2019/03/Mar27_GSMAiBlog_chart.png

The enterprise segment will be the principal driver of future IoT deployments. By 2025, we predict that out of a total of 25 billion IoT connection more than half will come from the enterprise/industrial sector.

This is what we have been forecasting. And this is what increasingly comes up during conversations with players in the IoT ecosystem. More important than our forecasts, though, is the fact that recent evidence suggests this is correct.

To be fair, a focus on the enterprise might run contrary to other views in the market. Yet as companies continue their quest to digitalise their operations, it’s only natural that the IoT market will scale…and our Enterprise IoT survey has confirmed just that. The enterprise appetite for IoT is immense: 65 per cent of enterprises have already deployed IoT solutions. And while the large ones may get the attention, some of these are very small companies. Given the fact that most companies are small, SMEs (small to medium enterprises, which include those with fewer than 250 employees, account for the vast majority of businesses, almost 95 per cent according to the OECD), we looked at enterprises with upwards of 20 employees in our survey. And, sure enough, the demand for IoT was near universal.

So let’s dig a bit more into the survey.

We wanted to understand the what’s, whys and how’s that are driving IoT adoption across enterprises. To that end, we asked IoT decision makers across eight verticals and 14 countries about all things IoT: their IoT deployment plans and timeframes; the scale of their IoT projects; their technology and vendor choices; the reasons behind their investment in IoT; key challenges, benefits and how they measure IoT success. Add to that questions around data analytics, security, and other IoT components and the result is a lot of data. Data which I am very excited about interpreting. But where to start?

That’s a good question. The easy answer is to look at our first cut of survey insights published recently, (IoT in business? The enterprise voice on the adoption choice [1]), digging into the drivers, challenges and measures of IoT success.

The better answer, however, involves the takeaways and longer-term implications for this rapidly developing market? Such as:

Small is big. The majority of IoT deployments are currently small. Even though IoT is moving beyond trials and proof-of-concept (PoC), the current size of deployments makes it feel like we’re still in a trial phase. One of the reasons for the smaller scale, is simply that smaller enterprises tend to deploy fewer devices.

We see this scaling up as the overall market matures and new capabilities emerge. Think small retail organisation currently connecting their point-of-sale (PoS) machines, adding a few security cameras, fleet management for the vans, smoke detectors et cetera…looking into the future these devices could be supplemented by automated check-outs, beacons, inventory management, and even robots. As more data is generated, collected and analysed, the application of AI/ML, in turn, will lead to new use cases and further benefits. And of course more connected devices.

Productivity tops all. Less than one in four (22 per cent) of enterprises pointed to unclear RoI as a challenge to IoT solution deployment. And this is the same for both SMEs and larger enterprises. At first glance this is surprising given this is an emerging area and a lot of people still heavily focus on RoI. Our survey results point to IoT deployments focus on low hanging fruit and targeted use cases.

For example, Ericsson’s Panda Nanjing factory (its largest industrial factory involved in the manufacture of its radio products) deployed IoT to automate production, resulting in savings from increased efficiency, a reduction in maintenance costs and increased flexibility in product line design. The first year provided a 50 per cent return on investment, while breakeven is projected in less than two years. This is reflected in our survey results: increased productivity is one of the key drivers of IoT adoption and success is measured through cost saving/process efficiency. Beyond that IoT creates additional opportunities for companies: tailored products and or services; better insights; and improved business processes to name but a few.

Last week, I moderated a panel session at Smart IoT London, on the topic of RoI on IoT. There’s a wider set of implications to consider when thinking about the future direction of enterprises. Whether we call it digital transformation or the Fourth Industrial Revolution, it’s clear that the very nature and DNA of enterprises is undergoing a major transformational shift (for example: moving from product- to service-based), which in turn requires both cultural and organisation change. Smaller enterprises might take longer to embark on this journey. Yet, there was a clear consensus on the panel that RoI for more transformational IoT projects will be harder to measure but the overall impact will be greater.

Challenges remain around integration, security and cost.

[2]These are felt by all enterprises, no matter the size. A lack of internal skills can then often exacerbate typical challenges around integration, maintenance and security, while the enterprise also suffers from a custom-build price premium.

So what can be done to avoid this? We saw this year at MWC19 Barcelona the theme of “making deployments simpler”, where partnerships are emerging between different industry players [3] aimed at addressing enterprise pain points around integration and security.

Being able to address the small enterprise segment is one of the key challenges for any vendor, including mobile operators. It requires a different skillset, building blocks and relationships. Unfortunately, there isn’t a one-size-fits-all recipe for success. It requires skilfully crafted partnerships across a fast emerging and developing ecosystem to deliver on small enterprise needs.

– Sylwia Kechiche – Principal Analyst, GSMA Intelligence

The editorial views expressed in this article are solely those of the author and will not necessarily reflect the views of the GSMA, its Members or Associate Members.

[1] https://www.gsmaintelligence.com/research/2019/03/iot-in-business-the-enterprise-voice-on-the-adoption-choice/738/
[2] https://www.mobileworldlive.com/wp-content/uploads/2019/03/ji.jpg
[3] https://www.gsmaintelligence.com/research/2019/03/mwc19-barcelona-beyond-the-headlines/736/

The opening weeks of 2019 have already delivered big announcements from the likes of Daimler, BMW, Seat and Uber. All of them seem to be betting big on smart urban mobility [1] and all aim to create the ‘platform of platforms’ in the city transport space through newly announced ventures.

A decade after Uber brought taxi booking to our mobiles, fresh traction in the space suggests a new wave of innovation might be round the corner for smart urban mobility. Just look at a handful of the announcements made in the last two months:

Daimler and BMW
The automotive behemoths, after concentrating on an ecosystem of services adjacent to mobility (parking; car rental; electric vehicle charging, taxi booking), announced at MWC19 Barcelona that they are going after the integration of all into one mobile app.
This is expected to merge 14 different services into one later in 2019.

SEAT and IBM
Unveiled the Mobility Adviser app at MWC19, which will use IBM Watson AI to help commuters make decisions about their daily transportation options, from scooters and bikes (the so-called micro mobility) to cars and public transport. The initiative is currently at a proof-of-concept stage.

Uber integrates public transit into its app in Denver
It’s no secret that Uber has been trying to integrate public transport routes and ticket purchases as well as the option to rent electric scooters into its app, while also trying to find its way more into our lives through food delivery with Uber Eats.

Here Technologies’ SoMO app
Announced in January, SoMo is an app connecting various on-demand mobility services, offering the option of sharing taxis with selected people, all on top of Here’s core mapping service. It plans to integrate more mobility service providers with SoMo and expand to new cities in the near future.

The common denominator of all these ventures? The creation of a ‘platform of platforms’ for urban mobility that allows commuters to plan their journey end-to-end and through one single app.

Can these companies really live up to their promises? Probably not. Consider the following:
Taxi sharing companies won’t make friends with cities any time soon
The Ubers of the world have been finding it really hard to operate even basic services in many cities due to protests from established competitors and conflict with local regulation over licensing of drivers. One can imagine the challenges of integrating local public transport data, especially when few cities’ transport authorities offer open APIs.
Uber’s Denver deal, to name one example, happened after seven years of Uber’s operation across cities of the world and is still at early stages. There is really no particular reason to be optimistic about the prospects of other players attempting to do the same thing across cities.
Micro mobility vendors’ future in question
Early endeavours in the micro mobility space are disheartening. Emblematic companies Bird and Lime both found it difficult to protect their assets from vandalism, so wide availability of scooters and dockless bikes in cities remain an open issue. In addition, the viability of the business model has been questioned due to small margins, hence talk about Uber buying one or the other. Therefore, even in the buyout scenario, an Uber, Lyft or Grab would have to subsidise their micro mobility business unit due to different margins.
Adjacent tasks provided over third-party apps add complexity
Bringing all urban mobility service providers under one application is not enough. The commuter is still required to perform a number of related tasks separately (mapping; navigating; planning; paying for ticket fares) which are tricky to integrate altogether in one app.
The reasons for this are that few cities offer mobile ticketing services for public transport: mobility apps are not necessarily good at mapping and rely on other apps, such as Google Maps; and payments over existing mobility apps often redirect users to PayPal or mobile banking apps.
All of these add complexity in the end-user experience and there is no development in sight that suggests their seamless integration will be achieved at scale.

Mobility through a single pane of glass is still a far away dream
Of course, integrating multiple means of transport (private, shared and public) and related services into one vendor’s app is a step in the right direction. However, the real value for commuters lies in offering this capability while integrating with all other mobility apps, even competing ones, through a single pane of glass type of platform that can operate independently of the geographic location.

If an app works in London but not in Paris or even in Bristol, is it really valuable and can it scale?

In reality, integrating all these services in one single pane of glass type of application is a far away dream due to inherent limitations in the respective companies’ partnership strategies and business models. For example, a typical European city has around five taxi booking apps and another five bike sharing services, which might not actually operate in the adjacent city or country. In other words, this is a highly fragmented market and further integration is needed.

But without any significant breakthrough, further market concentration such as the move by Daimler and BMW, can only lead to merging just parts of the mobility experience, without any visible way out of the location and multi-apps constraints.

Such a compromise which delivers an inferior user experience should not be accepted.

There is a market gap to fill: what would a breakthrough look like?
Clearly, there is a market need that aspiring entrants are so-far failing to address. Potential propositions might include a “connector” app which will interface with all competing mobility services providers and the adjacent ones, such as payments and mapping.

Of course, this “connector” app would have to be offered for free in order to incentivise companies to on-board. So the question is how to make money from that.

Interesting elements in that direction arise from Iomob, a Spanish start-up; Citymapper; and the Here Technologies’ Open Mobility Marketplace. However, more time is needed to assess their real potential in the market.

Another type of breakthrough would possibly be a solution that enables secure personal data and personal mobility preferences portability across applications. Blockchain presents some interesting attributes on digital identity, but nothing has emerged so far that would be applicable in the short-term.

Until there is a substantial shift in the market, some incremental improvement in our mobility experience is not bad at all, but it’s far from ideal.

– Christina Patsioura – senior analyst, Emerging Technologies – GSMA Intelligence

The editorial views expressed in this article are solely those of the author and will not necessarily reflect the views of the GSMA, its Members or Associate Members.

[1] https://www.gsmaintelligence.com/research/?file=d2e2f4b417a6a0f60d32b3dec01e7274&download

MWC19 Barcelona has been over for a week now. That’s enough time to look back at the big themes, little themes, and everything in between in an effort to determine what mattered and what it all means.

That’s what my team is doing in its perennial MWC wrap-up. However, building from my resolutions [1] to focus on 5G use cases, the enterprise, devices, and enabling technologies, I’ve managed to sum up the entire thing in just five pictures, saving you a lot of reading.

To be fair, any one of these topics could be the subject of its own blog and its own photo journal. That’s what happens when you pull together 109,000 attendees and more than 2,400 companies across more than 120,000 square metres of exhibition and hospitality space.

But, if you’re looking for a quick snapshot (pun intended), here’s mine.

Phones, phones, phones (5G that is)
This year, MWC brought us folding phones, phones that were mostly battery and lots of 5G phones.

It was the latter that stole the show. In part, because of the sheer number launched: everyone from Huawei, to LG, Xiaomi and ZTE announced them, alongside prototypes from Alcatel and OnePlus. In part, because it’s these devices that will enable initial 5G use cases, especially if priced cheaply enough to put into people’s hands (like Xiaomi’s Mi MIX3, pictured below).

[2]

Rakuten
The only thing that was nearly as ubiquitous as 5G phones was Rakuten. The newcomer Japanese mobile operator announced a rash of vendor selections (it’s working with Altiostar, Cisco, Intel, Mavenir, Netcracker, Nokia, and Red Hat among others).

More importantly, with the opportunity to build a network from scratch with cutting-edge innovations, Rakuten painted a way of how networks can be built in 2019, and distinguished itself as the one operator every vendor wanted to be associated with (thanks to Keith Dyer, editor of The Mobile Network, for this snap of Rakuten founder and CEO Mickey Mikitani).

[3]

Network infrastructure and supply chain diversity
Do you recognise the building pictured below? It’s the Renaissance hotel close to where MWC19 Barcelona was held. It’s also where Huawei showcased its Consulting service, which was in addition to its trio of booths covering networks, consumer and enterprise segments in the Fira Gran Via.

[4]Heading into the event it was unclear whether the network security concerns around Huawei that have been floated in some countries would be a major topic at the show. They were addressed in some form by Huawei [5], its competitors [6] and even the European Commission [7]. Where the breadth of Huawei’s presence at MWC19 mimics its reach in global telecom networks, the discussions around the vendor in Barcelona were only logical.

AR: for consumers or the enterprise?
When Microsoft launched its original Hololens mixed-reality smart glasses in 2016, there were questions of whether it was an enterprise or consumer solution.

Sure, the price ($3,000+) put it well outside the reach of most consumers, but its lineage to Kinect (an Xbox add-on) suggested incredible consumer use cases.

This year, the launch of the Hololens 2 put consumer aspirations to bed with a focus squarely on the enterprise. With GSMA Intelligence research showing that AR/VR headset adoption among consumers essentially stalled [8] in 2018, this isn’t surprising.

[9]

Gaming: the poster child for 5G?
AR headsets might be most at home in the enterprise (for now), but AR-based gaming is another subject. And, combined with 5G? Well, that’s an ideal use case for everyone’s shiny new network. At least, that was a clear message from MWC. Sprint announced work with Hatch on 5G-based cloud gaming.

Intel, Sony Pictures and Nokia demoed a Spiderman-related VR experience thanks to 5G.

[10]

Deutsche Telecom had a collaboration with MobiledgeX and Niantic (above) that was always packed with people: someone even showed up late to a meeting with me because they were too busy playing.

Putting aside questions around how 5G gaming will be marketed before 5G network coverage is ubiquitous, the allure of gaming as a 5G use case is understandable. Requiring high bandwidth and the low latencies that benefit from edge computing architectures, it ticks nearly all the 5G boxes.

– Peter Jarich – head of GSMA Intelligence

The editorial views expressed in this article are solely those of the author and will not necessarily reflect the views of the GSMA, its Members or Associate Members.

[1] https://www.mobileworldlive.com/blog/intelligence-brief-my-mwc19-barcelona-resolutions/
[2] https://www.mobileworldlive.com/wp-content/uploads/2019/03/GSMAi_MWC19_Blog_xiaomi.png
[3] https://www.mobileworldlive.com/wp-content/uploads/2019/03/GSMAi_MWC19_Blog_rakuten.jpg
[4] https://www.mobileworldlive.com/wp-content/uploads/2019/03/GSMAi_MWC19_Blog_renaissance.jpg
[5] https://www.mobileworldlive.com/featured-content/home-banner/huawei-boss-lays-into-us-security-scrutiny/
[6] https://www.mobileworldlive.com/featured-content/home-banner/ericsson-chief-takes-aim-at-europes-5g-policies/
[7] https://www.mobileworldlive.com/featured-content/home-banner/ec-vows-for-swift-resolution-of-5g-security-issue/
[8] https://www.gsmaintelligence.com/research/2019/01/future-of-devices-smartphones-ai-immersion-and-beyond/717/
[9] https://www.mobileworldlive.com/wp-content/uploads/2019/03/GSMAi_MWC19_Blog_hololens2.jpg
[10] https://www.mobileworldlive.com/wp-content/uploads/2019/03/GSMAi_MWC19_Blog_dt_niantic.jpg