Stepping away from the abyss

MWC Review: The changing face of the mobile industry

It’s been over a decade since MWC (3GSM as was) said au revoir to the yacht parties of Cannes and another six since the circus got evicted from its original Spanish home in the centre of Barcelona and unceremoniously dumped at the barely finished Fira Gran Via where congress remains today. The move out of town wasn’t popular; we missed the fountain lined setting beneath the National Museum of Art of Catalonia, and mourned the loss of undoubtedly the most reliable meeting place in conference history, the CBOSS stand, after the Russian vendor and its lady draped exhibit was banned from the show for allegedly offering escorts to delegates.

The move was undeniably necessary as the size and scope of the show had ballooned. Many questioned the future of the event bemoaning the scale and dilatory consequence.

Industry sentiment varies every year; 2015 felt flat, but 2016 was buzzing.

2016 Stats: 101,000 delegates from 204 countries/2200 Exhibitors/3 days of strikes/2 trillion Jamón baguettes & 8 florets of broccoli (table decoration in the Boqueria networking garden)

What was principally an infrastructure show for the Operator community has evolved over the years into an all-encompassing veil for the entire mobile ecosystem.

Once smartphones started to ship in volume (iPhone 2007) and 3rd & 4th generation networks were rolled out around the globe, the promise of a decade of hype was finally realized. The primary exhibitors of network and device vendors were joined by apps, content players and cloud technologies. Mobile advertising quickly set out its stall. Established pioneers like Nokia began to disappear into irrelevance replaced by new Asian players running Google under the hood. OTT companies that popped up in TV, music and gaming joined the party. More recently we’ve seen a growing presence from mobile commerce, wearables and IoT. This year saw mobile health arrive in a big way. Unsurprisingly there was a dedicated drone zone but the big consumer electronic theme for 2016 was VR. It was everywhere.

Anyone who picked up this year’s Exhibition Catalogue can testify at just how big and broad the event has become. There was even a dedicated Graphene pavilion.

As has been the case for many years the best peer group networking is done away from the show floor. Each night a huge selection of parties and dinners takes place in restaurants and nightclubs all over the city. Our own Hot Topics community all started in Barcelona in 2010. Even back then it had become virtually impossible for senior executives to find and connect with their peer group so we decided to curate some of the prominent themes from the week and invited a high profile selection from the industry to join the conversation. The rest, as they say, is history.

The one thing that is clear is mobile has moved from a vertical axis to a horizontal one.

And over the same timeframe, talent has been equally transient across the sector. For a long time operators suffered a brain drain to start-ups and OTT players. Recent consolidation across the vendor community, as the balance of power moved back to the larger OEMs, has seen many execs leave the space. Sales leaders who spent a career courting MNOs have left for broader enterprise leadership positions. And they have not looked back.

In 2013 we ruffled a few feathers amongst the Telcos by posting a report that suggested a lack of boardroom diversity meant that the MNOs struggled to drive and nurture innovation in the face of growing competition from the OTT players. Our point wasn’t to call them out, it was to highlight an issue that was only compounding the situation they found themselves in. We recognized the challenge that lay ahead; satisfying their shareholders who for years had watched their investments print money, whilst weening themselves off high margin voice and text revenues to fundamentally transform themselves into next-generation telcos based on data. Any lack of sympathy shown by the industry was largely down to how long it took many of them to wake up to the pace of innovation happening around them, and for them to start what would enviably be a painful process of restructuring.

The economics of the industry are changing rapidly and whilst the ownership of the network assets is arguably a strength of the telcos, it comes at a huge cost. During MWC16 there was a lot of talk about 5G. We are still a few years away from adoption but there’s no doubt some operator executives are going to be having sleepless nights as they calculate the cost of the next generation upgrade.

Operators are now fighting back.

There are some telcos calling for the regulation of OTT services (these are the same services that their own customers have adopted at an unprecedented rate and have reached a scale never seen before). But others are partnering with them.

A true next-gen Telco will focus relentlessly on customer experience, supporting rather than blocking the services that their customers want to use. They will own state of the art infrastructure, the pipes, but they will be smart, efficient pipes capable of harnessing and actioning in real-time the data flowing across the network.

By playing to their strengths; namely the network, customer data, and their distribution, they should be able to exploit opportunities in other sectors such as energy and health, extracting significant value from products and services that have been the lifeblood of the internet companies.

360Leaders is helping several large operator groups attract highly sought after digital skills and competencies in areas such as Big Data, Digital Health and AI from outside the Telco industry as they work hard to transform themselves. We see first-hand the challenge of bringing in outside talent into an industry that for years had a reputation for regulation, bureaucracy and for actually stifling innovation.

The tech market is red hot and the top 5% in any field always have options. Lots of them. For an operator to be able to attract and retain the talent that it desperately needs requires strong, decisive leadership capable of demonstrating that there is a clear mandate to really effect change. The publishing industry, with no legacy voice and data revenues to lean on, had ZERO choice but to adapt as it stared into the abyss. Operators have talked about change for a long time. Now is their time to act.