Analysys Mason attended the Mobile World Congress (MWC) 2014 in Barcelona, Spain. In this article, the lead analysts of our Mobile Devices, Next-Generation Services, Wireless Networks, and IoT and M2M Solutions programmes describe their highlights from the event.
Device launches will help operators to increase their user bases and drive demand for data
Ronan de Renesse, Principal Analyst
MWC was, once again, a major event in terms of new device launches. The devices announced ranged from the very low end, such as a USD25 smartphone prototype from Huawei Technologies, Mozilla and chip maker Spreadtrum Communications, to the very high-end with the launch of Samsung’s Galaxy S5 and Sony’s 4K video recording Xperia Z2 smartphone. Nokia (soon to be owned by Microsoft) raised a few eyebrows with the launch of Nokia X, a range of low-end Android smartphones. Nokia also indicated that its Windows-based Lumia range is performing well and accounts for more than 10% of smartphone sales in many European countries.
Unsurprisingly, wearable technology was also the order of the day on the show floor with the first appearance of exhibitors such as Fitbit and the launch of Huawei’s TalkBand, LG Electronics’ G-Arch and G-Health, Samsung’s Galaxy Gear 2, Gear 2 Neo and Gear Fit and Sony’s SmartBand. Samsung has clearly set the bar very high with its Galaxy Gear Fit, which features a beautiful 1.84-inch AMOLED curved touch screen. In terms of apps, Sony’s Lifelog was the most impressive because it monitors the wearer’s daily activities and links to their phone’s camera and music.
These device launches will help operators to increase their smartphone user base at the low end, and the wider LTE smartphone portfolio and incremental data demand from wearables will drive mobile data consumption at the high end.
We learned more about Facebook’s plans for WhatsApp, while the telecoms industry continues to develop its response
Stephen Sale, Principal Analyst
Amid much speculation about how Facebook will monetise its new customer base, WhatsApp continues to look for new ways to deepen its relationship with end users, while simultaneously making incursions into mobile operators’ core business. WhatsApp announced that it plans to introduce voice services in 2Q 2014, and that it is entering the mobile market as a branded reseller following an agreement with E-Plus in Germany. Facebook may not have given up on the Facebook Home principle just yet.
Operators’ next-generation communication services were prominent – a range of VoLTE and rich communications services were being demonstrated. A few observations:
- VoLTE is maturing as a proposition but only a handful of devices were on show
- joyn/RCS was hardly present as a consumer brand and is now (rightly, in our view) functioning as a mark of interoperability
- WebRTC is the obvious means for operators to extend their presence across devices.
Vendors were emphasising cloud services as enablers for rich communications to reduce costs and deployment time. The larger players with IMS installed bases are focusing on virtualisation. Smaller specialist vendors are talking about ‘OTT/IMS-in-a-box’ and many are complementing their back-end solutions with white-label apps. These companies include Acision, Amdocs, Genband and Kineto Wireless. Orange is also offering Libon to other operators.
Virtualisation of LTE infrastructure holds promise, but faces significant challenges
Chris Nicoll, Practice Head
The mobile network infrastructure is roughly a USD50 billion market worldwide in 2014, according to our estimates of RAN and core investments across all network technologies. A growing trend among the infrastructure vendors is to cannibalise their own hardware-based revenue streams to take advantage of the growing enterprise push towards software-defined networking (SDN), network function virtualisation (NFV) and cloud architecture. Every major MNO CTO we have spoken to this year at our Singapore event in January and at MWC 2014 expressed interest in these new architecture types to help reduce capex and opex costs, deal with network scale, and simplify network operations. However, these CTOs have also expressed remarkably similar concerns regarding cloud-enabled and virtualised network solutions.
- How reliable are virtualised solutions?
- How do I troubleshoot virtualised systems?
- Will the systems scale as expected?
MNOs’ technical leadership has clearly driven the trends towards cloud and virtualisation. The challenge for vendors is to sharpen the deployment opportunities for cloud RAN, and address the telco-grade concerns regarding the virtualised functions.
Small cells for LTE will undergo an extended development cycle
Small cells continue to solve key coverage problems for MNOs in both 2G and 3G networks. It is expected that market growth will come from 3G network expansion, and providing capacity and coverage and solving the increasing problem of indoor coverage for higher order (more than 2GHz) 4G networks. The Small Cell Forum continues an impressive march towards market development – at MWC it launched its Urban Foundations release helping operators to address small cell deployment in dense urban centres.
5G and LTE: friends or ‘frenemies’?
Is LTE already ‘over’? Definitely not. There is a general lack of consensus about what 5G will be and when it will arrive. Many of the infrastructure vendors are looking towards 2020 as the launch date for 5G, but the mobile operators are looking a bit further out, towards 2025 as the implementation date. LTE still has enormous growth potential to expand further into multi-band networks, provide in-fill and in-building support with small cells, support VoLTE and video distribution via evolved multimedia broadcast and multicast service (eMBMS). LTE clearly has a long way to go and the role of 5G is still not clear.
The Internet of Things and smart cities concepts were hot topics
Morgan Mullooly, Analyst
Internet of Things (IoT) devices and connectivity generated tremendous interest at MWC. Some items of note:
- Intel announced the launch of a developer programme for IoT devices. Many MNOs have been providing M2M kits to developers for some time now. However, developers do not engage with MNOs to the same extent as they do with large technology firms like Intel. Our view is that this is an exciting initiative that will enable and inspire developers to take advantage of the IoT.
- Samsung revealed the use of alternative operating systems as platforms for consumer IoT devices. Our view is that this development highlights that existing operating systems for consumer-grade IoT devices have some inadequacies. IoT will greatly benefit from Android, because it is a free and open-source OS for mobile devices with a huge developer ecosystem. However, we expect Google to eventually release a stripped down version of the OS to more adequately address the needs of IoT original equipment manufacturers (OEMs).
- The smart cities concept created a buzz at MWC. Our view is that there are really very few ‘one-size-fits-all’ solutions. Telcos that can quickly adapt to client city challenges and create bespoke location-specific solutions will do well in this space. Furthermore, it is vendors and systems integrators that are heavily promoting the smart cities concept – and operators will need to develop partnerships with these players to be successful in this space. In a step in this direction, AT&T and IBM announced, on the eve of MWC, that they will work together to develop smart cities solutions.
