One of the biggest telecom events in the world, now in its 10th year, the GSMA Global World Congress, is attracting 90,000 visitors this year. Why are so many people flocking to this event?
Obviously telecoms and in particular mobile has become one of the biggest industries in the world, hundreds of billions of dollars are invested every year and the market simply keeps growing. However, that is not enough to warrant this large number of visitors. The reason is that yes this is indeed one of the most important industries but nobody actually knows where this industry can lead to; it is full of surprises, new technologies and innovations. For companies involved in this industry, just making appointments with their key suppliers in order to stay abreast is not enough as new developments, critical to organisations, could well come from totally new directions, so going to Barcelona, to the biggest mobile show on earth is a good way of looking around for what is brewing.
For the same reason those who depend on the mobile industry are also opening offices in the innovation centres in the world not just in Silicon Valley and Bangalore, but also in minor innovation centres such as Rwanda just to make sure that they are not missing out on key new innovations.
As an example m-payment developments are lead from Africa and Asia with 250 services and 100 million users and in 16 countries there are now more mobile bank accounts than there are traditional bank accounts. A range of innovative start ups are now offering a range of very innovative banking, loan and payment services, simply because the traditional banking sectors have missed the boat. Lessons learnt and new developments occurring here could be of critical importance to the financial market elsewhere.
However, innovation is not just a matter of products and services, far more important innovation is needed on an organisational and a systems level. The future will be about sharing and business models such as Uber and AirBB have been used by us on many occasions to show what ‘sharing’ really means. In order to grow the market all infrastructure should be shared and interconnected (fixed, wireless, IT, data, etc). All of this should be agnostic and treated as a utility. On top of this real services that are of value to customers at prices that are affordable can be built.
Tim Höttges the CEO of Deutsche Telekom indicated that from a technology point this means that what we will see is: softwarisation, virtualisation, convergence (of infrastructure) and data analytics (connecting different value chains). I would like to add gamification to this for education purposes, the end result for customers will have to be that use of services, applications and devices has to be effortless.
There is a real understanding that mobile, broadband and cloud computing are absolutely transforming whole industry sectors and those who embrace this are both in front of the pack (and the various challenges) and they are the ones that are able the reap the first benefits of these changes.
Another absolute key area is data and the need for connected data management. Currently 90% of data is locked up in silos and proprietary systems that makes it basically unusable for the new environment we are entering, this is also called ‘black data’. However, as we have discussed before new developments are taking place that can unlock this data.
At the Congress all speakers mentioned the massive changes in business models and the need for deep organisational changes in order to be able to participate in these changes. The other key areas addressed by all were security, privacy and ‘effortless’. The broader industry totally depends on trust – something the telecoms industry is very familiar with – and if those issues are not properly addressed this could severely hamper the growth of the industry. ‘Effortless’ was mentioned in relation to intuitive use.
What do customers want from mobile operators?
Not yet so clear in their minds but they also want what can be translated into smart cities, buildings, transport, healthcare, education, etc.
(Source: Vodafone at Barcelona Mobile World Congress 2015)
Obviously also at this event the telco operators used the opportunity to keep on complaining about the ‘free ride’ that the OTT players are getting and they continued their call to bring the OTT players within the same regulatory environment they have to operate in.
While most of this is self-serving there certainly are issues moving forward, there is a clash of business models which is not in the interest of the customer nor in the interest of the long term health of the industries involved. The control that companies such as Google, Facebook and Amazon exert is increasing by the day, with very little interest to open up their systems in the same way they advocate to open telecoms systems. There is still no permission based system in place that give customers full control over their data. Furthermore what are now different industries, are merging deeper and deeper and there is increasingly less difference between telcos, ISPs, broadcasters, OTT companies and other digital internet organisations. A radical review and regulatory reorganisation of this market will have to happen sooner rather than later.
While a few years ago it could be argued that the telcos also would have to adjust and transform their organisations and business models; several of them are now well and truly underway in doing so. While still significant costs will have to be taken out of the telecoms business before a true convergence with the other groups can take place, it is now of matter of when rather than if.
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