Light Reading

MWC14: What Are Telcos For?

Graham Finnie
Heavy Lifting Analyst Notes
Graham Finnie, Consulting Analyst
3/5/2014
50%
50%

Frustratingly confined to my sick-bed throughout this year's Mobile World Congress, there were one or two small consolations to be taken from missing the greatest telecom show on earth: I could get a cup of tea whenever I wanted one; and I could switch off the media noise and watch the garden birds preparing for spring.

But most of all, I could, for once, see the show from the outside looking in. Instead of burrowing my own topic-specific tunnels through the forest of booths and their caffeinated sales folk, I could see what matters to Joe and Jane Public.

And from that perspective, nothing, really, could be plainer. To the world at large, it's all about apps and devices. The big stories as viewed from my sick-bed were, in no particular order:

  • Samsung Galaxy 5
  • Connected watches
  • Mirrorlink
  • Connected automobiles
  • Windroid
  • E-ink device displays
  • iPro smartphone lenses
  • Smartphones for seniors
  • $25 smartphones
  • Connected fitness bands
  • Smartgloves
  • Smartfabrics
  • And, on the apps side, Facebook, WhatsApp, Openchat, Mastercard's Masterpass in-app payment scheme, surgeons using Google Glass, Opera Max data compression, and so on and on.

From this point of view, the network (and its supply chain) is little more than an afterthought: annoying when it fails, but otherwise invisible. SDN, NFV, NG-OSS and all the acronyms that keep those inside the network industry awake at night are of no more interest to the world outside than, say, new kinds of road surfaces, or the latest gas turbine.

No doubt that sounds a little unfair to those who toil heroically to keep their networks relevant in an end-user environment that is changing at frightening speed. The fact that telcos have been able to cope (just) in an environment where they control less and less of the device (and app) value chain is little short of miraculous.

But the world can be an ungrateful place, and viewing MWC from the outside in raises a larger and even more uncomfortable question in my mind. If telcos over the past 20 years have steadily lost control over the devices connected to their network, as well as most of the applications that run on them, what will they be selling to Joe and Jane Public in, say, 10 years' time?

It's hard not to follow the logic of the past ten years and answer: nothing but a connection and the bandwidth that goes with it. TV, telephony, messaging, and all the rest, on this reading, will have gone the way of every other app -- disappeared into Whats App, Facebook, Amazon Prime, Netflix, and other start-ups yet to be born. No longer will these apps and services be called, absurdly, "over the top" -- they will constitute 100% of what customers value.

There are, of course, no sure bets about the future. Many telcos are still deeply embedded in the business of providing services, and won't easily abandon a core source of value and stickiness. In fixed networks, triple play is still the default package in many countries. In mobile networks, a different kind of triple play (voice, messaging, bandwidth) rules. But for how much longer?

The question then will be whether telcos can develop enough ancillary capability to earn more money from their consumer customers, not just directly but indirectly. Ancillary capability means not only the services themselves, but the service enablers, perhaps paid for not by the users but by content and applications providers, or by enterprises. Things like security & parental control, guaranteed delivery, QoE, analytics, and other goods that network operators are well positioned to provide.

Small wonder, in light of that list, that network neutrality -- or rather, its absence -- matters so much to the telcos. With so much at stake, we have not, I think, heard the last of that debate.

Whatever the outcome, a great deal is at stake. If telcos can't uncover new sources of revenue (or persuade regulators to give them special breaks) the relentless focus on cost-cutting will continue. But if they can, new vistas will open up for both them and their suppliers. One way or another, service innovation -- or its absence -- will be the key to the future.

— Graham Finnie, Chief Analyst, Heavy Reading

(8)  | 
Comment  | 
Print  | 
Newest First  |  Oldest First  |  Threaded View
MordyK
50%
50%
MordyK,
User Rank: Light Sabre
3/6/2014 | 11:19:43 AM
Re: The future of Telcos
All this pessimism in regard to the carrier's future is disheartening. The carrier's have so much unique value ot offer, but they simply have to change their culture and start thinking like webco's instead of their old telco ways.
Mitch Wagner
50%
50%
Mitch Wagner,
User Rank: Lightning
3/6/2014 | 12:36:49 AM
Just because
Just because we didn't hear much about networking doesn't mean it's unimportant. When service providers are doing their jobs, the network is invisible, and consumers and businesses can access it without having to think about it.
nasimson
50%
50%
nasimson,
User Rank: Light Sabre
3/5/2014 | 9:46:20 PM
The future of Telcos
What an insightful article! The future of telcos is an often discussed subject. There are no easy answers to how telcos will win back the OTT market that they very stubbornly & unwisely left to the internet space. First it was other services, now it is messaging, pretty soon it will be voice. Telcos will find their bread and butter going to OTT. Perhaps Telcos only utility will be outdoor and the non-WiFi spots in indoor.
Gabriel Brown
50%
50%
Gabriel Brown,
User Rank: Light Sabre
3/5/2014 | 10:02:22 AM
Re: Telcos
Yes, probably. Maybe. It's hard to say for sure because WiFi is fundamental to the smartphone market. It has helped to grow the overall market for mobile data. In that sense, it has been very useful to MNOs.

Whatsapp has, arguably, destroyed value for mobile operators. But it provides a lot of value to end-users and that encourages people to get smartphones and data plans. WiFi is a little the same.
mendyk
50%
50%
mendyk,
User Rank: Light Sabre
3/5/2014 | 9:54:02 AM
Re: Telcos
Won't wi-fi turn out to be more of a revenue reducer for mobile operators as it is currently constituted? If free or low-cost wi-fi does become ubiquitous, fewer users will need pricer data plans.
Gabriel Brown
50%
50%
Gabriel Brown,
User Rank: Light Sabre
3/5/2014 | 9:43:06 AM
Re: Telcos
I'm also skeptical about the $33 billion Whatsapp figure. But pretty obviously mobile operators have been outwitted and outmaneuvered in the provision of what at one point was expected to be a core service: sending messages and pictures.

I also doubt WiFi roaming will make much overall difference to operator revenues. But there are some parallels in that mobile operators are, largely, ignoring what is obviously a useful and well-used technology. I've argued that mobile operators should engage with WiFi. The difficulty is to figure out how they can better exploit the technology. That part isn't obvious.
mendyk
50%
50%
mendyk,
User Rank: Light Sabre
3/5/2014 | 8:28:40 AM
Re: Telcos
Colleen -- It's not obvious how mobile network operators are losing revenue without wi-fi roaming. I'm also curious (skeptical?) about that $33 billion Whatsapp figure.
clleenl-2
50%
50%
clleenl-2,
User Rank: Light Beer
3/5/2014 | 5:28:21 AM
Telcos
Hi Graham,

Isn't roaming WiFi the shimmering star for the telcos, and that's why they've been working so hard on developing Next Generation Hotspot aka Hotspot 2.0 with Passpoint certification? They can see there's a lot of money that's been left on the table - I read somewhere that Whatsapp accounted for $33 billion in less telco sales last year. Roaming WiFi would certainly recoup that and, at the same time, make connecting to hotspots easy.

 

Colleen O'Shea
http://wifitrends.blogspot.com

 
Educational Resources
sponsor supplied content
Educational Resources Archive
More Blogs from Heavy Lifting Analyst Notes
Overlays have been proposed as a way to bring the benefits of virtualization to the telco data center networking domain.
Join our fireside chat at Mobile World Congress in Barcelona as we discuss the operational implications of NFV with Justin Paul, head of OSS marketing at Amdocs.
The race to deliver gigabit broadband services is accelerating, and G.fast is a key technology that telecom service providers can deploy to compete successfully.
If NFV is to progress, proofs of concept and trials need to come out of the lab and into live networks in 2015.
This year is expected to be a year of great market evolution across most telecom sectors, specifically in virtualization and Long Term Evolution (LTE).
Flash Poll
From The Founder
Networks of the future will rely on "white box" switches and servers rather than proprietary hardware and that's going to alter the shape of the communications industry. Who says so? John Chambers.
LRTV Huawei Video Resource Center
Huawei Intros Smart Device for eLTE

3|30|15   |   05:25   |   (0) comments


Huawei has developed a secure, location-aware multimedia smartphone for its eLTE trunked radio solution, says Huawei's Norman Frisch.
LRTV Huawei Video Resource Center
Win Video, Win All

3|30|15   |   06:44   |   (0) comments


Video is going to be the next main source of revenue for operators. Operators have big opportunities and advantages to monetize video services. Globally, Huawei has helped more than 70 operators achieve over 30 million video subscribers. Watch this video for more.
LRTV Custom TV
The Benefits of HyperScale Clouds for NFV

3|27|15   |   01:50   |   (0) comments


Hyperscale cloud has been developed by the Internet giants to support the creation and delivery of software-based services at blistering speeds, and at the lowest possible cost. The original ETSI NFV vision was to adopt hyperscale cloud architecture and practices. This vision has become somewhat obscured along the way, due to misunderstandings about the hyperscale ...
LRTV Huawei Video Resource Center
eLTE Rapid Meets the Need for Speed

3|26|15   |   4:45   |   (0) comments


Designed especially for emergency and dedicated ad hoc local mobile communications coverage, Huawei's eLTE Rapid solution can deliver trunked voice, video and data coverage for multiple users over a 6km range and be set up in just 15 minutes, explains Huawei's Norman Frisch.
LRTV Huawei Video Resource Center
On Videos: Challenges & Opportunities

3|26|15   |   5:56   |   (0) comments


Most everything is now connected. And along with 4K and 4G technologies, everyone could be creating and broadcasting video contents. Users are expecting better video experience with any screen, anywhere and anytime. Operators will meet new challenges, but also see some big opportunities.
LRTV Custom TV
JDSU: Delivering Dynamic Networks for a Personalized Experience

3|26|15   |   5:59   |   (0) comments


Light Reading speaks to JDSU at Mobile World Congress 2015 about new solutions in the areas of HetNets, VoLTE, backhaul, virtualization, big data analytics, and real-time intelligence.
LRTV Custom TV
Smarter Service Chaining & New Ways to Benefit From Qosmos Technology

3|25|15   |   03:11   |   (0) comments


David Le Goff, director of strategic and product marketing at Qosmos, explains how the company has added application awareness to subscriber information to make service chaining more efficient and reduce costs for networking and infrastructure. In addition, Qosmos technology, which has been delivered as C libraries, is now also available as a virtual machine, ...
Between the CEOs
Qosmos CEO: The Changing Face of DPI

3|24|15   |   13:53   |   (0) comments


LR CEO and Founder Steve Saunders sits down with the head of Qosmos to talk about the changing state of the art in deep packet inspection technology, including its role in SDN and NFV architectures. Also, how the comms market is becoming more like the automotive industry.
LRTV Huawei Video Resource Center
FC Schalke Scores With Its Agile Stadium

3|24|15   |   6:23   |   (0) comments


Top German soccer club FC Schalke 04 has deployed a new, agile WiFi network from Huawei in its Veltins-Arena stadium and is reaping the benefits in terms of customer satisfaction and business opportunities, explains marketing chief Alexander Jobst.
LRTV Huawei Video Resource Center
Huawei’s Insights on Mobile Video

3|24|15   |   7:51   |   (0) comments


More people than ever are now watching videos on smartphones. Seventy percent of mobile traffic will be video traffic until 2018. In this video, Huawei's exports give their insights on mobile video in terms of business model, network planning and 4G network construction.
LRTV Documentaries
The Rise of Industry 4.0

3|24|15   |   02:26   |   (9) comments


Are you ready for the fourth industrial revolution? It's a big deal for influential operators such as Deutsche Telekom.
LRTV Huawei Video Resource Center
Getting Connected With eLTE

3|23|15   |   06:04   |   (0) comments


Trunked radio communications have entered the 4G LTE world, and with Huawei's eLTE solution, can now deliver a full range of data and video services as well as push-to-talk voice, explains Huawei's Norman Frisch.
Upcoming Live Events
April 14, 2015, The Westin Times Square, New York City, NY
May 5, 2015, Hyatt McCormick Place, Chicago, IL
May 6, 2015, Georgia World Congress, Atlanta, GA
May 12, 2015, Grand Hyatt, Denver, CO
May 13-14, 2015, The Westin Peachtree, Atlanta, GA
June 8, 2015, Chicago, IL
June 9-10, 2015, Chicago, IL
June 9, 2015, Chicago, IL
June 10, 2015, Chicago, IL
September 29-30, 2015, The Westin Grand Müchen, Munich, Germany
All Upcoming Live Events
Hot Topics
AT&T Woos SMBs With Small-Scale WiFi
Sarah Thomas, Editorial Operations Director, 3/26/2015
Just Don't Say IBM Is 'Relaunching' Networking Business
Mitch Wagner, West Coast Bureau Chief, Light Reading, 3/26/2015
TV Everywhere Nears Mainstream Adoption
Mari Silbey, Independent Technology Editor, 3/27/2015
Carriers Are Bright Spot in BlackBerry Q4
Sarah Thomas, Editorial Operations Director, 3/27/2015
Comcast Says TWC Deal Will Close Later
Mari Silbey, Independent Technology Editor, 3/26/2015
Like Us on Facebook
Twitter Feed
Webinar Archive
BETWEEN THE CEOs - Executive Interviews
LR CEO and Founder Steve Saunders sits down with the head of Qosmos to talk about the changing state of the art in deep packet inspection technology, including its role in SDN and NFV architectures.
Chattanooga’s EPB publicly owned utility comms company has become a poster child for how to enable a local economy using next-gen networking technology. Steve Saunders, Founder of Light Reading, sits down with Harold DePriest, president and CEO of EPB, to learn how EPB is bringing big time tech to small town America.
Cats with Phones
Naptime Click Here
"This is how I feel about your conference call."
Latest Comment