Earlier this month, Qualcomm made a number of 5G related announcements at its 4G/5G Summit in Hong Kong.

Unlike previous years, the recent event included a dedicated day of interactions with only journalists and analysts. I jumped at the chance for some candid conversations and left with three key takeaways around 5G and IoT:
1. Qualcomm has rapidly moved from prototypes (at 2017’s summit) to more concrete demos and tangible products and solutions ready for commercialisation in 2019 (this year’s event), a remarkable step which companies in the 5G ecosystem can build on.
2. The company is increasingly showing its technology leadership in 5G, leading with its mmWave solutions that will harness the indoor coverage ability for enterprise and residential use.
3. That Qualcomm’s ecosystem partners chose to share 5G enterprise use cases in industrial, retail, and automotive sectors suggests they expect these to be early adopters. Retail is unexpected as it isn’t often listed as a third example.

[1]Main developments
Overall, Qualcomm made eight new 5G-related announcements at its summit (see table, right, click to enlarge). Many are consumer-facing technical innovations aiming to accelerate developments in 5G and IoT. This is not surprising. Qualcomm, after all, is racing towards achieving 5G commercialisation in 2019 and consumer use cases are some of the first to materialise.

What is surprising is Qualcomm’s challenge to the broader 5G ecosystem to design the kind of immersive customer experience in a device form factor which 5G and mmWave will support.

This focus on designing products with enhanced customer experience in mind should not be ignored.

If successful, it could accelerate adoption of consumer IoT based on two new technological enablers from Qualcomm:
1. Its significantly reduced-size 5G mmWave antenna module should spur creatives to design the kind of extended reality wearables as ordinary as a pair of glasses, or the visor that Geordi La Forge wears in Star Trek. Qualcomm was candid (in private) that the current immersive form factor needs improvement to spur mainstream adoption.
2. The small cell partnership with Samsung (announcement number three in the table) is a significant move that helps remove the need to make a choice between Wi-Fi and cellular devices. While not necessarily positioned for in-home deployment, ubiquitous 5G coverage will help to make the case for connectivity beyond Wi-Fi or Bluetooth in consumer devices.

Cautious optimism
During a 5G deep dive session shared with journalists and analysts, Qualcomm showed a lab test focused on the performance of 5G mmWave indoors. It offered two future use cases in Enterprise Networks and factory automation, with the expectation that private networks should increasingly become economically and technically viable to deploy. Qualcomm backed this statement based on its own busy pipeline built out of committed business development efforts with C-level executives in each individual key customer.

I do not doubt Qualcomm’s experience, but would caveat the optimism with two additional points. First, Qualcomm’s current company-specific business development approach adds to the time needed to discover technical and business needs. Second, the mathematics of return on investments equations will always demand a strong business case to justify spending.

These caveats are important because our own Enterprise Survey (currently in progress) reflects a cautious prioritised investment approach towards 5G private networks among large manufacturers.

Overall, much of the excitement during the Qualcomm 4G/5G Summit was down to the technology achievements within the last year, which set the ground for further developments.

Implied above, the challenge from Qualcomm to the rest of the ecosystem is also to make progress on business models for both consumer and enterprise adoption. For example, the topic of who will pay for the customer experience was not discussed.

To this end, innovation is needed around the business enablers to price such a benefit. We are used to the one-off transactions of a product purchase, but 5G enables service-oriented transactions which require new mechanisms. Qualcomm’s Summit may not be the forum to discuss these outstanding areas. But, with MWC 2019 only a few months away, I expect to see more examples of use cases, collaboration and deployment from the 5G ecosystem in the New Year.

– Yiru Zhong, lead analyst for IoT and Enterprise, 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/2018/10/GSMAi_blog_table_QualcommSummit.png

India has 1.16 billion mobile connections (that is huge), making it the second largest market in the world. With this connection base and low data costs, it is not very surprising that the country’s networks today are transporting more than 10 million TBs of data in a quarter, higher than that of the US and China combined.

Accompanying the recent growth in mobile data traffic, the country has also witnessed tremendous telecom M&A, reducing the number of mobile players from 13 in 2016 to only four in 2018 [1].

Why does any of this matter?

Because, consolidation delivers an opportunity for surviving players to acquire new customers, requiring an understanding of customer preferences and brand switching behaviour.

You only need to look to porting request trends to see this brand switching in action: requests in the country have witnessed an average growth rate of around 30 per cent over the last four years, while connections grew at an average of 6 per cent over the same time (see chart, below, click to enlarge).

[2]

So, what is driving this behaviour? While we know that Reliance Jio disrupted the market, there are other factors that affect the brand switching behaviour in consumers.

Price perception
India is a prepaid driven market with a large share of price sensitive customers. It’s no surprise, then, that pricing has a major impact on brand switching with customers moving to a new operator when they feel prices surpass the reference of “reasonable.” It’s even less of a surprise that operators understand this and revise their tariff plans frequently to cater to individual needs and requirements.

A good example of pricing strategy in India comes from Reliance Jio, which captured more than 20 per cent market share within two years of its launch, riding on an aggressive strategy of low tariff plans. Consequently, the new entrant grabbed a significant market share from incumbent operators. Bharti Airtel and Vodafone India joined the league and played the price card to attract and retain the customers resulting in the tariffs as low as $2.50 per month for unlimited voice and 1.5GB of data per day. Where one operator leads, the others generally must follow.

Brand image
Brand image is a result of myriad strategies and messaging opportunities: word of mouth; adverts; public reputation building; and marketing communication.

In India, Airtel and Vodafone maintained a brand image of network reliability and high-end customers, while Idea had affiliated its image to the youth. On the other hand, Reliance Jio presented itself as a cost-effective brand. Based on these images, customers would gravitate towards the brand that better aligned to their needs.

In the face of stiff competition, however, this has had to change: operators are now connecting their brand images with value added services and converged offerings, with the focus on increasing their market shares.

Ease of portability
Ease of number portability acts as a catalyst to customers’ switching behaviour. It doesn’t cause switching, but it sets the stage for one operator to more easily poach subscribers.

Yet, if tremendous growth in porting requests weren’t enough to create strong competition, the Indian government and policymakers are taking steps to further ease the process of switching among the brands. The Indian regulator, TRAI, has proposed to reduce the time taken by an operator to give a clearance to porting requests within the same circle to two days from a mandate of four days currently.

The Indian mobile telecommunication industry is entering a transition period: due to easy access to information and a wide range of offerings it is easier than ever before for customers to switch between service providers.

While we might understand the factors which have impacted the brand switching in the past, operators also need to consider strategies that will help them to retain customers. Operators understand this and are now moving away from conventional retention strategies, instead finding progressive solutions to make their customers remain loyal.

For example, as the market shifts from a voice- to data-driven economy, operators are now offering data-driven solutions to customers as their value added proposition including converged offerings, partnerships with OTT players to offer benefits like free annual subscriptions to Amazon Prime or Netflix, to their customers. This is a common strategy in many mature markets, but the fact that it’s now a feature of service offers in India is telling. It points to impressive development in only a short amount of time.

As tariff wars have reached maturity, it’s only natural to expect service wars to ensue as a customer retention feature. Where India has moved to quickly catch up with the rest of the world in terms of data usage and, now, customer retention, it will be impressive to see what innovations are coming.

– Radhika Gupta – head of Data Acquisition, GSMA Intelligence
– Lakshya Rastogi – research 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/blog/blog-is-india-consolidation-too-much-too-fast/
[2] https://www.mobileworldlive.com/wp-content/uploads/2018/12/12-Dec-GSMAi-blog-chart.png

First off, a disclaimer. It’s an important one (not like the warning that your McDonald’s coffee may be hot).

Last week, I spent some time at Facebook’s Telecom Infra Project (TIP) Summit and put together a blog post titled The Problem with Facebook’s Telecom Infra Project. If you haven’t seen it yet, you can check it out here [1].

If you did read it, you probably wondered why it took me so long to get to the actual problems I see TIP facing. The bulk of the blog was focused on a handful of more positive messages: that initial concerns about industry support for TIP were quickly put to rest; that an initially vague focus quickly sharpened; that the core value proposition of connecting the unconnected is a real issue which aligns with our own work here at GSMA Intelligence.

Was it a love letter? Not quite. But was it clear to anyone reading beyond the headline that I really like TIP, what it hopes to accomplish and the progress it is making? And within that context, the point of highlighting the problem referenced in the headline was less about disparaging TIP than it was flagging a challenge that needs to be focused on to create success.

Of course, with that as a set-up, it only makes sense to talk about a few other problems: if we want to successfully navigate the challenges, then we need to recognise them. And to be completely honest, the one flagged last week might not be the most pressing.

Broad versus deep
When I highlighted that OpenRAN, mmWave and optical transport programmes were being complemented by new TIP work streams, the point was to recognise forward progress. But there’s a potential downside to this progress: lack of focus.

There is no doubt that vRAN fronthaul; efficient power technologies; artificial intelligence and machine learning; end-to-end network slicing; solution integration; and edge networking are all critically important telecoms technologies. And there is no doubt they can all benefit from the TIP treatment.

What is less certain is whether TIP can focus on all of these simultaneously and show progress with scaling attractive solutions which are more than one-off demos or trials. As the scope of any company or organisation expands, there is always the risk of spreading its energies too thin. TIP is not immune to this.

Network supplier expertise versus inertia
If TIP is successful, it will bring new technologies into operator networks. And with those technologies will come new vendors. Hence, we saw the best performing vendors of the OpenRAN RFI including a broad set of players extending beyond the traditional end-to-end network players: Mavenir; Parallel Wireless; Altiostar; Fairwaves; Radisys; BaiCells; NEC; ASOCS; Phluido; Comba; Dali Wireless; and VANU (in no particular order).

From an innovation and pricing perspective, competition is a good thing. But, for the most part, today’s wireless networks have been built by a handful of network vendors. In many cases this includes the deployment and management of network gear. And, over the years, this gear has come to include technologies which can be upgraded to support new generations of wireless access. It all adds up to an inertia that favours working with incumbent vendors: they are easier to work with because they know how the existing networks run and how to keep them running.

Commercial wrangling versus open commitment
The inertia I just mentioned stretches beyond network operations and deployment. It is a core dynamic in how networks are purchased. Setting up new commercial arrangements with small, relatively unproven vendors can be risky: the type of risk procurement departments loathe. And, while a new set of vendors might promise a focus on innovation and openness, larger vendors are often in a position to cut costs in order to avoid losing out on business. The question for an operator, then, is how much that focus on openness is really worth? Can an investment in the future benefits of openness and supplier diversity be justified, especially when service pricing and margins are under pressure?

None of this is news to the people who run TIP, including its vendor and operator members. They all get it. And that helps to explain a vision Telefonica outlined of a new telecom infrastructure value chain which includes hardware vendors, software vendors, node integrators, network integrators, support vendors, and service vendors. Breaking down the end-to-end value chain helps to break some of the inertia (operational or commercial) that accrues to end-to-end players.

It’s a smart move. It’s necessary. But it’s not sufficient. Maintaining progress will require a few other things.

TIP will need to make a few bets. Rather than spreading its energies around, it will need to focus on a few technologies (like it did with optical transport and OpenRAN) where it can show progress and gather momentum. These bets need to touch incremental network opportunities, places where it is easier for an operator to work with new vendors because incumbency isn’t an issue yet.

Do you need an example? Consider the new TIP focus on edge networking, including the Edge Application Developer Project Group. While edge promises latency improvements, transport efficiencies and new operator revenues beyond connectivity, it’s still a very nascent space. It’s still very much anyone’s game.

The most important requirement, however, stretches beyond TIP itself. If operators are committed to open networking innovations, it must be reflected in their purchasing. They can’t always be swayed by incumbent vendors offering the same solutions at a discount.

This means new procurement thinking. It requires faith in the long-term benefits of open network solutions, even if reliability or standards support doesn’t compare with traditional network vendors. It may require co-investment or involve working with incumbent vendors, driving them further and further towards openness.

I understand that this is a lot to ask but change won’t come from building, and buying, networks the same way they have for years. Trials and demos are a good start, but need to be followed by deeper actions and commitments.

– 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-the-problem-with-facebooks-telecom-infra-project/

Everyone is getting excited about the brilliant future that 5G offers, but let’s face it: without a lot more spectrum dedicated to mobile services, dreams of faster speeds and greater capacity will just remain dreams.

But only last week the world saw two more small steps to fulfil those 5G dreams with two 3.5GHz auctions which offered spectrum discussed for 5G services coming to an end. And, with them, came a very noticeable disparity in final results between the two.

While three Finnish incumbent operators went just slightly above the starting prices, Italian bidders splashed out [1] on their investment, paying almost 11-times more than the reserve price (and 56 times more than Finnish bidders) for nearly half the amount of spectrum. With a few 3.5GHz auctions completed in the past 18months and several more on the way, it’s a good moment to look at what happened so far and anticipate what may happen in the future.

Of course, there are other bands important for 5G deployment as well, like mmWave bands (especially for densely populated areas). However, only Italy and South Korea have organised 5G-specific mmWave tenders so far (with operators paying only slightly more than starting bids), making 3.5GHz the most instructive as far as 5G goes.

[2]

Less (spectrum offered) is more (in prices paid)
Across these recent auctions, Finland offered the most spectrum: 390MHz. That is almost twice as much as offerings in Spain and Italy, with the UK auctioning even less (150 MHz). This was reflected in final prices: in terms of €/MHz/Pop (PPP adjusted), Spain paid almost twice; the UK four-times; and Italy nearly 13-times as much as Finland did.

It’s noteworthy that none of the recent 3.5GHz auctions ended with unsold spectrum.

Less spectrum offered means scarcity, but this does not necessarily mean it was artificially imposed by national regulators. In some countries, spectrum has been reserved to vertical industries or there already have been incumbents in the band, as licences have been assigned to fixed wireless access (FWA) or WiMax services (Spain, Italy, and the UK). Regardless, it creates the pressure for bidders to fight fiercely for any piece of spectrum left, which naturally pushes the prices up. And MNOs will need a lot of spectrum to deploy 5G properly; at least 80MHz to 100MHz of contiguous spectrum per operator in the mid-band, according to ITU.

Offering a sufficient supply of spectrum in the 3.5GHz band will take some of that pressure from the bidders and leave them with more resources to invest in actual 5G deployment.

Noteworthy, some mobile operators have been able to get access to the 3.5GHz band through the secondary market rather than government auctions, acquiring spectrum licences from incumbent FWA providers: Masmovil acquired Neutra and Eurona in Spain; Three UK purchased UK Broadband; and Fastweb bought spectrum licences from Tiscali in Italy. This may be a way of gaining access to some of the much-needed spectrum in the band without having to wait for government action. However, acquiring the spectrum piecemeal may mean that some band pre-planning will have to occur.

Lot size matters…a lot
Countries assigning spectrum in 3.5GHz have shown two different approaches so far when it comes to block sizing: offering a small amount of larger blocks (Finland, Italy, Czech Republic); or offering large amounts of small 5MHz to 10MHz blocks (South Korea, UK, Spain, Ireland).

Large contiguous blocks of spectrum ensure the higher quality of future 5G services. However, offering lots that are too big during tenders may also cause spectrum scarcity and lead to higher prices if the number of potential applicants exceeds the number of blocks. This can be illustrated by the recent example of Italy, where only two lots of 80MHz and two smaller lots of 20MHz were offered, forcing operators to fight for the bigger lots. Appropriately sized lots may allow operators more bidding flexibility and ensure more participants will end up with winning spectrum, and that more end customers will be offered 5G services.

[3]

5G hype is attracting new players
In Finnish and South Korean auctions, only incumbent operators participated and the price increase compared to starting bids was rather low (19 per cent and 13 per cent respectively), as applicants had a lot of spectrum to bid for (130MHz and 93MHz respectively). In other markets, however, participation of potential new entrants increased the competitiveness, which left the bidders with less spectrum available, on average, per bidder (typically only 30MHz to 40MHz in the UK, Czech Republic and Italy). This fuelled the struggle to secure as much spectrum as needed.

While allowing new entrants shouldn’t be avoided, their presence within the bidding process has to be taken into consideration, in terms of auction elements such as reserve prices, lot size or overall auction design, especially regarding three- or four-player markets.

[4]

Everyone is closely watching the forerunners
It’s no surprise that 5G spectrum auctions are garnering more interest and analysts are trying to use those results to predict the future pricing trends. While benchmarking to other markets should not be the only element considered in spectrum valuation, results from previous auctions are carefully studied by regulators in terms of setting their own reserve prices and the temptation to set them on a higher level may be strong.

However, every country is unique, with its own market forces and conditions to consider, so benchmarking at this stage, especially given the wide variety of outcomes, is risky. So far, 5G auctions have happened only in developed markets and the dynamics and conditions are very different from those in the developing world.

Designing auctions with sufficient spectrum offered, appropriately sized lots and reasonable reserve prices is important and also complicated: it’s possible that some countries may even turn away from auctions as the assignment mechanism for some of the 5G spectrum. The Hong Kong Secretary for Commerce and Economic Development suggested spectrum could be assigned to MNOs for free in order to ensure access to spectrum and result in boosting national competitiveness. Additionally, many countries have already assigned fixed wireless/WiMax licences in the 3.5GHz band, often to MNOs.

The question remains whether the operators would be able to convert their licences to tech neutrality and offer 5G services, without having to undergo a long and costly process of reapplying and competing for the same band they already use. The ultimate goal is putting spectrum to good use and, clearly, regulators are recognising that auctions are not the only approach for spectrum assignment in the 5G era.

– Robert Wyrzykowski, analyst – Mobile Spectrum, 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/operators-splash-e6-5b-in-italy-5g-spectrum-auction/
[2] https://www.mobileworldlive.com/wp-content/uploads/2018/10/Oct-11-GSMAi-blog-figure-1.png
[3] https://www.mobileworldlive.com/wp-content/uploads/2018/10/Oct-11-GSMAi-blog-figure-2.png
[4] https://www.mobileworldlive.com/wp-content/uploads/2018/10/Oct-11-GSMAi-blog-figure-3.png

This week, Facebook hosted its TIP Summit 2018 – the third time it has convened Telecom Infrastructure Project (TIP) members and other interested parties since the project’s kick-off in 2016.

When launched back at MWC 2016, the TIP buzz was undeniable. Just as Facebook was disrupting the businesses of so many operators, it was now promising to disrupt the telecom networks business with a focus on open networking technologies.

It was a direction in which the telecom infrastructure space was already moving and an extra push from a name like Facebook was more than welcome, especially since it was all in the name of bringing network costs down and connecting the unconnected.

What’s not to like?

Well, for starters, it wasn’t quite clear why vendors would get with the programme. Nokia was a founding member, but a plan to open up “what is a traditionally closed system” would obviously threaten the business of anyone currently selling into that closed system.

Of course, when queried about their support for network innovation, vendors are fond of saying that they develop and build what their customers are willing to pay for. Would it be safe to assume, then, that operators which have often been slow to change the way they do business would be slow to ask their supplier to follow suit? Or that, if these operators did ask vendors to innovate in the name of openness, they might not actually buy the resulting solutions – especially if they were less reliable or more expensive in the near-term?

And yet, the momentum behind TIP has continued to build. Operators see an opportunity to drive network innovation. Vendors (especially non-incumbents) see an opportunity to break into the network business formerly closed off to them. Facebook sees an opportunity to build a tighter relationship with the service providers it relies on for connectivity, while driving the altruistic aim of increasing emerging market Internet usage.

Growing support
A handful of members at launch became “more than 300” by the first TIP Summit and “over 500 member organisations” today. An early, somewhat vague, focus on “access, backhaul, core and management” morphed into concrete work around OpenRAN, mmWave and open optical technologies. These, in turn, were joined by additional work streams around: vRAN fronthaul, power and connectivity, Artificial Intelligence and Machine Learning, end-to-end network slicing, and solution integration.

This week, we saw the announcement of further work around system disaggregation (optical and cell site gateway), the results of vRAN fronthaul trials, OpenCellular trials, and the OpenRAN RFI launched in June by Vodafone and Telefonica [1]. By all accounts, the results have been impressive.

Job done, right? Maybe not.

The problem comes back to the core TIP value proposition of connecting the unconnected. It was the proclaimed focus of the first day of the 2018 TIP Summit. It was called out as the whole point of TIP in a fireside chat between Facebook’s Jay Parikh (VP of Engineering) and Ina Fried of Axios [2]. And, Facebook’s motives aside, it’s a real issue. Just take a look at our Mobile Connectivity Index (overview below).

[3]

In some regions (like Sub-Saharan Africa), nearly 40 per cent of the population isn’t covered by a mobile network. And even where network coverage tops 80 per cent across other regions, the percentage of people who are covered but not connected – thanks to cost, content availability or consumer readiness – is often more than 40 per cent.

There’s no doubt connectivity matters. Whether or not Facebook and TIP can change the connectivity landscape is another matter.

Sure, bringing down network infrastructure costs could make it easier to roll out networks to the uncovered. But conflating network infrastructure with networks is a mistake. Networks require siting infrastructure. They require spectrum. They require people to keep them running. TIP’s ability to impact those things is limited.

If there’s any doubt about the magnitude of the costs that go beyond network infrastructure, consider what operators spend on opex vs capex. We’re not talking an even split. Or even two-to-one. In many cases, it’s closer to five-to-one, or even more skewed towards opex.

TIP may be able to drive network infrastructure scale and cost efficiencies, but that’s only one part of the connectivity equation.

Ultimately, this is why it’s encouraging to see TIP messaging around rural connectivity accompanied by progress on innovations like network slicing, edge networking, 5G NR and other technologies that can be deployed everywhere. Not because rural connectivity isn’t important, but because the ability of TIP innovation to drive success may always be limited by dynamics beyond technology.

– 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/featured-content/home-banner/telefonica-and-vodafone-shake-up-ran-market/
[2] https://www.mobileworldlive.com/featured-content/home-banner/facebook-ramps-up-terragraph-reassures-operators/
[3] https://www.mobileworldlive.com/wp-content/uploads/2018/10/MWL_mobile_connectivity_index.jpg

Recent weeks have seen interesting developments within the IoT ecosystem, coming from the likes of ARM, Google, Intel, Qualcomm and Samsung. It made me revisit ecosystem players’ positioning within the IoT value chain, having already looked at how operators are positioned [1].

The simple fact of the matter is the importance of partnerships and collaboration cannot be overstated in IoT. The point laboured time after time is that no one company can do it all, by which I mean provide an end-to-end solution spanning chipsets, application and system integration. Sounds pretty obvious, but it doesn’t mean IoT ecosystem players haven’t tried to become sole solution providers.

So, let’s take a look at how some of the top tech giants are positioning in IoT. For simplicity I’ve split IoT capabilities into devices, modules and chipsets, platform management, data analytics, cloud and security layers.

[2]In essence, the boundaries between traditional technology/IT players and others are blurring as new business models in IoT emerge around data, analytics and, in a more broad sense, services. Companies are moving up and down the IoT value stack, aiming to capture the largest piece of the IoT revenue pie (see chart, click to enlarge – the red circle identifies the company’s core IoT capability, the arrows signify their expansion direction, and grey indicates areas of focus).

Just to remind ourselves how big this is, GSMA Intelligence forecasts revenue from IoT applications, and platforms and services (including cloud and analytics), will increase sixfold between 2017 and 2025, bringing in $137 billion and $754 billion respectively. In short, a rather attractive revenue opportunity.

Upping the software stack: Technology companies such as Google, Microsoft and Amazon are adding devices to their existing software stack. Google has been investing in machine learning (ML) and artificial intelligence (AI) for years and is already well positioned in the data analytics space. During its recent Google Cloud Next ’18 event, the tech giant announced initiatives aimed at moving analytics close to the edge or near the point of data generation: namely, Cloud IoT Edge (software for IoT gateway-class devices running Android Things or Linux) and Edge TPU (a chip specifically designed to offer ML inference on edge devices).

This is a pretty compelling proposition for the fast growing industrial IoT segments such as smart cities, oil and gas, utilities and manufacturing. I also can’t ignore Amazon’s Alexa, which has been a runaway success in the smart speaker market. For example, Ofcom figures show 13 per cent of UK households now own a smart speaker, of which 75 per cent are Amazon Echo models (which feature the Alexa assistant).

From the devices up the stack: On the other side of the spectrum, traditional manufacturers and OEMs including Cisco, Intel, ARM, Samsung and Qualcomm are augmenting their existing core capability, hardware (modules and devices), with platform and data analytics capabilities. These companies grow their current capabilities either organically or by acquisitions with the ultimate goal to move into AI.

But also they want to address the pressing issue that is IoT security.

For instance, Samsung has been expanding its capabilities up the IoT value stack to include platform management and data analytics, but also down the stack – launching ARTIK modules tailored for IoT and ARTIK IoT Security. Recently, the company committed to a KRW25 trillion ($22.3 billion) investment [3] over three years in areas including IoT, AI and 5G.

Despite its bid for NXP Semiconductors falling [4] through, Qualcomm’s optimism when it comes to the IoT opportunity shows no sign of abating. It expects $1 billion in revenue from IoT this year as its chips make their way into even more devices: with a total of more than 200 wearables and 1,300 different wireless headsets, earbuds and wireless speakers on the market.

Platform seems to be the only game in town when it comes to IoT: Platforms management (in which we include connectivity, device and application management) is an almost default position for any digital company with designs on the IoT market. Most recently, ARM announced its ARM Pelion platform to support its vision of 1 trillion connected devices by 2035. This stems from the acquisition of Treasure Data, an enterprise data management company which it dubbed “the final piece of our IoT enablement puzzle”, along with the integration of its Mbed IoT Device Management platform with the recent acquisition of Stream Technologies.

Last, but not least, if it ain’t working…let it go: Intel reported revenue of $880 million in Q2 from its IoT Group, a 22 per cent year-on-year increase equivalent to 5.2 per cent of overall revenue. However, in April 2018, a decade after the acquisition, Intel divested Wind River [5]. Why? In the words of IoT Group leader Tom Lantzsch, it is a move designed to sharpen Intel’s focus on growth opportunities which align to Intel’s data-centric strategy.

– Sylwia Kechiche, principal analyst – IoT, 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/blog-the-operator-opportunity-in-iot-not-lost-yet/
[2] https://www.mobileworldlive.com/wp-content/uploads/2018/08/IoT-ecosystem-pic2.jpg
[3] https://www.mobileworldlive.com/featured-content/top-three/samsung-to-boost-ai-5g-investment/
[4] https://www.mobileworldlive.com/featured-content/home-banner/qualcomm-drops-nxp-bid-reveals-iphone-blow/
[5] https://www.mobileworldlive.com/featured-content/top-three/wind-river-charts-iot-course-after-intel-split/

If you haven’t yet decided where you’re going to take your summer holiday this year, I have some good news and some bad news. I’ll start with the bad: time is running out. Seriously; you’ve got about a month before the unofficial end of summer.

The good news? Time hasn’t run out yet. Technically, summer lasts until the latter part of September, giving you ample time to pick a place, book your accommodations and get there. And while I can’t tell you where to go, I can make a pretty rock solid suggestion. Consider going somewhere significant in terms of mobile. A market which either teaches you something about mobility or carries some sort of historic weight. If you’re reading this, I shouldn’t have to explain why this is a good idea. Heck, it might even be a tax deduction or something you could expense.

Still need some more direction? Okay, here you go with my picks for summer 2018, including a few reasons why the whole family (not just wireless fans) might be interested.

Australia/New Zealand: Why? Per the latest update to the GSMA Mobile Connectivity Index [1] (powered by GSMAi), Australia and New Zealand come out on top, separated by about a single point. With solid networks, mobile broadband penetration over 100 per cent and incomes which support mobile usage, they provide good snapshots of mature markets where mobile broadband and connectivity are a given. Bonus Points: Kangaroos and Platypuses; great wine; super poisonous snakes (Australia); and spring skiing (New Zealand).

Uganda: Why? Our latest update to the impact of the mobile industry on the UN’s Sustainable Development Goals (SDGs) isn’t out yet, but I’ll give you a heads up on something: there’s some cool stuff going on in Uganda. Think Living Goods Uganda which uses a network of door-to-door health workers armed with mobile apps to drive improved health and well-being. Think mobile money-based humanitarian cash transfers [2] in the Bidi Bidi refugee settlement. Bonus Points: Primate tracking and safaris; Wakaliwood; and banana wine.

Sacramento, California (USA): Why? It’s one of the first markets where commercial 5G services are being rolled out – albeit based on Verizon’s 5GTF (technical forum) rather than the 3GPPs 5GNR specifications [3]. You’ll need to actively seek out these deployments and they might not be commercial when you get there. However, a trip to this early 5G market provides some cool opportunities to see how NR might compare with TF and how a new network supplier like Samsung might find its place in 5G networking. Bonus Points: proximity to Silicon Valley, Napa Valley and Lake Tahoe, the largest alpine lake in North America (for when you need to escape the sweltering summer heat).

Oslo/Stockholm (Norway/Sweden): Why? This is a historic choice. If you’re afraid that a trip to see initial 5G network launches won’t really show you much, then how about a trip to see the first LTE markets launched almost a decade ago? In the same way we all know 5G capabilities will evolve, checking out the state of LTE today in the Nordic capitals (with some of the highest 4G penetration levels in Europe) should be a telling exercise. Bonus Points: late evening daylight plus archipelago or fjord cruising; Nordic strawberry season; Trolls; Oslo Jazz Fest; and chocolate covered bugles.

China: Why? Though I’m an American, even I understand China is a big country and recommending it as a single location for a visit is silly. Point taken. But if you’re looking to understand the breadth of what you can do with IoT [4], China is a good place to start. Want to see a connected yak? Check. Want to see a connected manhole cover? Check. Want to understand how e-sim fits in? Check (look for more from us on this last point). Bonus Points: the Great Wall; pandas; beaches; Terracotta Warriors; and soup dumplings. Again, it’s a big country with a lot going on. If you can’t find something to keep the whole family busy, you’re not trying.

India: Why? At a little over 22 per cent, LTE penetration in India isn’t particularly high. Two years ago, however, the number was less than 1 per cent. All of this in a country with more than 1.3 billion people. Let that sink in for a moment. Even by 2025 it’s completely unlikely 4G penetration in India will catch up with China. Still, an opportunity to witness first-hand what happens when robust mobile broadband capabilities ramp so quickly doesn’t come around often. Bonus Points: see the notes on China above (big country with lots to see); sub-in the Taj Mahal; snow leopards; Chaat; and different beaches.

Niue (South Pacific): Why? Have you ever found yourself lecturing the kids about what it was like to live before 4G or 3G? Want to show them? Niue is one of a few markets with no (or almost no) options beyond 2G. There is WiFi in places but that’s not likely to do anyone much good when they want to post to Facebook or Snapchat (or whatever the kids are doing nowadays) when out and about. Bonus Points: caves; coves; beaches; rainforest; diving; dolphins; a golf course where pay is by an “honesty box” (if you never read another blog with my name on it, you probably know where to find me)

Greenland: Why? So you want to go to an island with almost no 3G or 4G coverage, but the South Pacific is too far, or too warm? Wonderful. Greenland is the place for you. It’s not all 2G, but it’s pretty darn close. Bonus Points: you can tell people you’ve actually been to Greenland and explain (over and over) how Greenland got the name which should have been used for Iceland.

Glasgow (UK): Why? Special events – like big concerts and sporting events – are real tests of mobile network capabilities. They’re also opportunities to leverage a solid network (and service delivery assets) in the name of services which go beyond simple connectivity. You’ve already missed the Fifa World Cup and Tour de France, but that still leaves the 2018 European Championships (part of which will take place in Glasgow) with 250,000 attendees expected. Will the networks hold up? Will carriers manage to provide “experiences?” The best way to find out is to be there. Bonus Points: Haggis; whisky; plus, I’ll be there (as a spectator, not competitor).

Los Angeles, California (USA): Why? Technically, September 12th to 14th is still within the summer. It’s also when Mobile World Congress Americas [5] is taking place. Official messaging stating the event will “bring together the brightest minds in the industry today, to imagine what tomorrow could bring” might seem like hyperbole. It’s not. And taking place in LA, it’s going to be an incredible opportunity to see the intersection of the mobile and content/entertainment ecosystems. Bonus Points: the beaches; sun; Hollywood; Beverly Hills; plus, just like Glasgow, I’ll be there too!

– 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.mobileconnectivityindex.com/
[2] https://www.gsma.com/mobilefordevelopment/programme/mobile-for-humanitarian-innovation/humanitarian-payment-digitisation-focus-ugandas-bidi-bidi-refugee-settlement/
[3] https://www.mobileworldlive.com/featured-content/top-three/3gpp-clears-5g-for-take-off-with-standalone-nr-specs/
[4] https://www.mobileworldlive.com/blog/intelligence-brief-iot-musings-from-mwcs/
[5] https://www.mwcamericas.com/

The impact of consolidation on mobile markets continues to be a matter of debate. After all, a merger between mobile operators can drive diverse outcomes which are important to consumers: price; quality; and service innovation. At the same time, the actual impact of a merger depends on multiple factors which could leave consumers better off… or worse off.

It’s by no means a simple issue of arguing industry consolidation is good or bad. It’s a more complicated dynamic.

That’s why competition authorities have such a challenging job when assessing the impacts of a merger, making it so important to look at the outcome of past consolidation. If we understand how previous tie-ups actually affected consumers, we can better predict the effect of proposed mergers. Then we can take informed decisions to the benefit of consumers. Simple enough, right? Not quite.

To date, the evaluation on the impact of mergers on prices has produced mixed results. While some studies find significant price increases [see footnote 1], others do not find any [2]. Some find decreases in prices [3]. As for the impact of mobile mergers on investment and quality, the overall findings are clearer: no study has found that higher market concentration reduces operator investment. Instead, more recent studies have found a positive impact of mergers on network coverage and network speeds [4].

Of course, mergers in the mobile sector are back on the agenda of competition authorities worldwide. US regulator the Federal Communications Commission (FCC) is studying the clearance of a merger between the third- and fourth-largest operators in the country, T-Mobile US and Sprint [1]. The European Commission meanwhile, is looking at the merger between Tele2 and T-Mobile in the Netherlands [2]. If cleared, the merger would reduce the number of players in the country from four to three.

Both mergers are being pursued in order to reach greater scale and realise cost efficiencies, which would enable faster, more cost-effective, rollout of new technologies including 5G.

BEREC
Wading into these waters is BEREC – the European regulators’ group. In a report, Post-Merger Market Developments: Price Effects of Mobile Mergers in Austria, Ireland and Germany, published in June (the most recent four-to-three operator mobile mergers in Europe), BEREC aimed to shed light on how to think about future mergers.

And what did it find?

On prices, it sees an increase: “there is at least some evidence that retail prices for new customers increased due to the merger”. On quality, it isn’t so sure, citing “uncertain long-run effects”. A combination of “at least some evidence” and “uncertain long-run effects” might seem less than compelling. Even so, there’s real reason to argue BEREC comes up short on actually looking at prices and quality; effectively getting the story wrong.

Let’s look at some examples on the pricing front:
Austria: putting aside the fact BEREC did not consider the late 2013 spectrum auction (which could have driven prices up), pre-merger prices in Austria were low compared to other countries and this means prices in Austria had less room to decrease, regardless of the merger.
Ireland: in some cases, BEREC might have found increases, but for most periods and tariffs analysed, the study admittedly did not find a significant effect from the merger on prices.
Germany: here, BEREC itself considers the evidence of price increases to be “not very robust”. And for MVNOs, which account for about 20 per cent of the market (and have an even stronger presence among low-usage customers), BEREC acknowledges it did not include data for them.

But, let’s put prices aside for a moment. When it comes to the impact on innovation and network quality, both hugely important for consumers, BEREC presents some basic trends in network quality in Austria and Germany. That’s great, but it’s not the same as actually detailing how the merger affected the observed trends. What’s more, it fails to compare network quality with other countries.

To be fair, that’s a lot to ask. But it’s also something the GSMA has spent time on. And what did we find?

A recent GSMA Intelligence (GSMAi) study, Assessing the Impact of Mobile Consolidation on Innovation and Quality, exploring the impact of the Austrian merger found it had significant positive impacts for consumers, with accelerated coverage of 4G by 15 per cent to 30 per cent and higher speeds for mobile broadband. In a separate study, Assessing the Impact of Market Structure on Innovation and Quality, GSMAi also found consistent results for Latin America, with consumers in more concentrated markets in the region experiencing better network quality. The results speak for themselves.

In summary, there is some convincing evidence of consumers experiencing better network coverage and quality as a result of a merger, but the impacts on prices are less clear and BEREC’s recent study does not add any clarity in that regard.

We are on the cusp of 5G networks being rolled out. These bring with them the promise of lower costs, better and new services for consumers. If mergers can facilitate these investments the result can be a positive impact on consumers.

There’s a lot at stake, and competition authorities that are considering proposed mergers clearly have a tough job ahead. Will they get it right?

– Pau Castells, director of economic analysis, 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] [3] CERRE 2015 [4], DG Comp 2015 [5], RTR 2016 [6], BWB 2016 [7]

[2] [8] Frontier Economics 2015 [9]

[3] [10] Houngbonon 2015 [11] and HSBC 2015 [12]

[4] [13] GSMA 2017 [14], GSMA 2018 [15]

[1] https://www.mobileworldlive.com/featured-content/top-three/t-mobile-sprint-make-merger-case-to-fcc/
[2] https://www.mobileworldlive.com/featured-content/top-three/ec-delves-deeper-into-t-mobile-tele2-dutch-deal/
[3] https://www.mobileworldlive.com#_ftnref1
[4] http://cerre.eu/sites/cerre/files/150915_CERRE_Mobile_Consolidation_Report_Final.pdf
[5] https://publications.europa.eu/en/publication-detail/-/publication/0ba81733-f193-11e5-8529-01aa75ed71a1
[6] https://www.rtr.at/en/inf/Analysis_merger_H3G_Orange
[7] https://www.bwb.gv.at/fileadmin/user_upload/PDFs/BWB2016-summary-Ex-post_evaluation_of_the_mobile_telecommunications_market.pdf
[8] https://www.mobileworldlive.com#_ftnref2
[9] https://www.gsma.com/publicpolicy/wp-content/uploads/2015/05/Assessing_the_case_for_in-country_mobile_consolidation.pdf
[10] https://www.mobileworldlive.com#_ftnref3
[11] https://editorialexpress.com/cgi-bin/conference/download.cgi?db_name=EARIE42&paper_id=108
[12] https://www.orange.com/fr/content/download/33263/1086075/version/2/file/Supersonic+13.04.15.pdf
[13] https://www.mobileworldlive.com#_ftnref4
[14] https://www.gsma.com/publicpolicy/wp-content/uploads/2017/07/GSMA_Assessing-the-impact-of-mobile-consolidation-on-innovation-and-quality_36pp_WEB.pdf
[15] https://www.gsmaintelligence.com/research/?file=0ba00039b123efd2d6f9a235d1b29074&download

In 2017, with the inaugural Mobile World Congress (MWC) Americas on the horizon, I penned a column on the topic of what it would take for the new event to be a success. What would be considered success?

Given the stakes (a reboot of the CTIA’s flagging annual show), it was a natural question to ask. After all, we all knew that when the dust settled, lots of people would be asking whether or not it had been successful and what that would mean for future iterations.

The stakes are not nearly the same for MWC Shanghai: it is no longer a new show. But newness shouldn’t be the only trigger for thinking about how we’ll look at the concept of a successful show. If nothing else, it’s a good launch pad for asking what we want to see. So, with MWC Shanghai just a week away, let’s do just that. Let’s ask what success will look like. What needs to happen and what do we need to learn?

IoT: Coming to a manhole or Yak near you
In the somewhat trumped-up war between Cat-M and NB-IoT, China has largely been a faithful NB-IoT lieutenant. Along with that has come a focus on driving IoT into new markets and new use cases and new applications. This traction is important for more than any one country or operator alone. Putting the use cases on display is important for showing operators and enterprises what is possible with IoT. It’s important to remember, however, that innovative use case demonstrations are just that – demos. They need to be followed-up with proof of a business case behind them. MWC Shanghai will doubtless execute on the first part: it will put the use cases on display. It will also need to execute on the second part of showing how to make money from them.

5G verticals: Take Your Pick (just maybe not today)
Where US operators have gained a lot of attention for their moves around fixed wireless access 5G, Asian operators have been putting their focus on mobile 5G. There’s a consumer component to that, but there’s also an enterprise component. As with China’s focus on NB-IoT, there is a real interest in tying 5G to success in the enterprise. But that’s not news, is it? Tackling vertical markets is a core part of the 5G story for operators everywhere. For MWC Shanghai to add to this narrative, it will need to do more than just talk up the opportunity for 5G in vertical markets. It will need to give evidence of how operators can execute (are executing?) on it.

AI Insights: Skynet versus Alexa versus NUGU
Even if you’re a casual follower of artificial intelligence (AI) trends and only read the mainstream media, you know that AI is a big deal in China. Headlines including Why China will win the race for complete AI) dominance?; How China is trying to become the world’s leader in AI?; How Chinese tech giants like Alibaba are bringing AI to neighbourhood corner stores show it is a national agenda.

You’ll also know there are myriad AI use cases, ranging from the apocalyptic to the mundane. Carriers can slot themselves into most of these. Take, for example, smart speaker offerings from SKT or Telefonica. Whether they should, and how they can, benefit from the work going on in China is another story MWC Shanghai will hopefully shed light on.

Consumer insights: more than phones and drones
One draw of holding a mobile-focused event in Asia is first-hand exposure to innovative consumer business models, services and devices. That means the phone you’re possibly reading this on, sure. But it also means the wacky stuff you won’t see at home: services and devices that might seem experimental today but commonplace tomorrow. That’s why there will be consumer technology tours. That’s why there will be an augmented and virtual reality (AR/VR) expo. And that’s why there will be a Chinese Skateboarding League demo.

Yet, where so many consumer demands and trends have come and gone without operators figuring out their role, seeing a clear link between this consumer technology and service provider business models (connectivity or otherwise) will be important for making this more than just fun to watch.

This might all seem like a lot to ask. Or, it might not seem like much at all: personally, I’ve got no doubt that Shanghai will deliver on all of this in some form. It really depends on how much you listen, who you talk with, and what you make an effort to actively learn about. Between the sessions, and workshops, and meetings, there will be a lot going on in Shanghai next week. That’s because there’s a lot going on in the industry and a lot of the industry’s innovation is rooted in Asia.

No matter how you define success, it should be a fun week.

– 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.

The IoT has captured the public attention for better or worse. Yet, while news headlines focus on the billions and billions of consumer devices which will be connected (robots, cars, fridges, drones and so on) this is just one part of the story.

Purely connecting devices isn’t really what IoT is all about. Rather, it is about the data these devices generate – the insights derived from them and acted upon in order to create value and benefit consumers, enterprises and a wider society.

So now to answer the billion dollar question: how big is IoT?

As you’d expect from any well-hyped market, there are many, wide-ranging predictions out there. Industry observers might remember claims there will be 50 billion connected devices by 2020 (that is in two years from now…just saying). More recent forecasts point to one trillion IoT devices being built between 2017 and 2035. Of course, we have our own numbers: building on the 7.6 billion IoT connections (cellular and non-cellular) in 2017, we see the market growing more than threefold to reach 25 billion in 2025. That’s a long way from a trillion, but it’s an impressive number nonetheless.

The vast majority of these IoT devices – typically in indoor environments – are connected by unlicensed radio technologies, designed for short-range connectivity (Wi-Fi, Z-Wave and Zigbee). Licensed cellular IoT connections, though a minority of connections, will see massive growth – from 600 million connections in 2017 to 3.1 billion in 2025. For those keeping score, this translates into 12 per cent of connections being served by cellular networks. The bulk of those licensed cellular connections (60 per cent) will come from Mobile IoT, as we like to call NB-IoT and LTE-M.

[1]

While 25 billion might be a big, flashy number, what’s bigger than a billion? A trillion! And, come 2025, we see the IoT market as worth just that – $1.1 trillion.

Where will this money come from? Two-thirds will come from platforms, applications and services. Professional services will grab another 27 per cent. This leaves 5 per cent for connectivity, declining from 10 per cent today.

Depressing, right?  Well, it is if you’re a connectivity provider.

However, it’s not all doom and gloom for operators. There’s nothing stopping them from moving further up the value chain and beyond a connectivity sweet spot. In fact there are plenty of strategies and recent examples to demonstrate just that.

Enterprise pull-through: Operators have existing relationships with enterprises through the provision of communication services. These can be leveraged. In fact, integrated operators with fixed and mobile assets have sought to expand on their traditional role within the enterprise, leveraging existing sales channels to supplement communication services with broader ICT services, including cloud, security, data analytics and now IoT services. A number of operators have already expanded their IoT capabilities beyond connectivity as well. Recent weeks featured some hard-to-come-by reported figures on operators’ IoT revenue, which although aren’t impressive, indicate operators have strategies in place on how to gain a foothold in this fast growing market.

End-to-end solutions: Strengthened relationships with enterprise clients allow operators to upsell and bundle in services to play an end-to-end role in IoT service provision. In Q1 2018, KPN noted its IoT service offering, based upon its KPN Things platform, drove a 40 per cent year-on-year revenue increase. KPN’s platform combines IoT connectivity with additional services such as data and analytics, consultancy services and hardware. By offering modular building blocks and reusable solutions, and moving towards plug and play to avoid bespoke solutions, operators can easily scale up.

Mergers and acquisitions: A tried and trusted route to market is M&A to build E2E solutions. For example, Verizon’s acquisition spree started in 2012 when it bought Hughes Telematics. Recently, it resulted in the creation of a dedicated telematics unit, Verizon Connect, which also integrates its most recent acquisitions (Fleetmatics and Telogis) and positions Verizon as one of the leading telematics providers. Verizon reported $1.1 billion in IoT (including telematics) revenue in 2017, a 40 per cent year-on-year increase, equivalent to 1.2 percent of revenue, up from 0.5 per cent in 2013.

Partnerships: Another way to diversify IoT revenue is to form partnerships across the IoT value chain. During MWC 2018 Vodafone announced V-Home by Vodafone, a suite of services which combine the V by Vodafone consumer IoT system [2] with Samsung’s Smart Things open platform and includes services such as connected car, security cameras and pet tracking. Vodafone plans to expand its current country and products coverage, and launch an online marketplace for developers. This approach allows operators to address segments in which they lack a deep understanding of the market and sell services together with partners.

IoT is viewed as a key growth story for operators. However, the opportunity will not just fall into their laps. They need to chase it.

– Sylwia Kechiche, principal analyst – IoT, 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/2018/05/Picture5.png
[2] https://www.mobileworldlive.com/featured-content/home-banner/vodafone-launches-european-consumer-iot-play/