Telecoms.com roving reporter Jamie Davies delivers offers his take on MWC Shanghai, featuring an interview with Nokia’s Jane Rygaard.
Now with added video!
Buzzwords are nothing new to the telecoms and tech space, but 2018 is starting to see the rise of a few more; co-creation and collaboration
In most cases, vendors and telcos use tech-orientated buzzwords to dazzle, amaze and confuse customers, but this is a new type of euphoria. Its softer, less tangible and more acute. Co-creation and collaboration are necessary aspects of developing the digital economy, but purely by the flexible nature of the concepts, the buzz-bending, hype-escalating PR ‘gurus’ of the industry are going to have some fun here.
The definition and application of the two words are relatively simple on the surface. 5G can potentially take telcos beyond the realms of connectivity utility, providing an opportunity to become more of a consultative service provider. Instead of selling SIMs, telcos will be able to evolve offerings to be more than connectivity for enterprise customers. This means solutions which can proactively improve the efficiency of business operations.
Think of intelligent factories, smart cities or autonomous vehicles. In these examples, connectivity can be used to enhance the business, instead of just making it work. But before this dream of new revenues can be realised, the business needs to be transformed and new solutions need to be imagined.
This is where co-creation and collaboration comes into play. Telcos cannot simply knock on the door of a customer with a 5G offering and say ‘here you go, have come capacity, bandwidth and latency’, a solution specific to the industry, or the individual business, has to be created. It is a different type of business model.
One company which is taking this approach is NTT Docomo. Speaking during MWC Shanghai, CEO of Docomo Beijing Labs, Lan Chen told us the team now has more than 1400 industry partners, with plans to continue to grow. Chen said each of the partners were working with the Docomo research team to create products specific to industry, whether it would be AI-driven taxi solutions which predict demand or virtual assistants which are contextually aware. These partners range from technologists in enterprise organizations, to the internet giants like Baidu, as well as academic researchers. The point is they have experience in building services and products specific to the verticals.
Docomo is defining this research as co-creation, and there are already examples of services in the real world. Chen said there are several taxi companies working in Japan and China to hone the predictive demand service, and while it is not perfect, progress is certainly being made.
Elsewhere on the agenda, Intel had the chance to beat its chest and declare how collaborative it is. Robert Topple, GM of the 5G Advanced Technologies group, pointed to the work the team is doing with operators around the world to discover the future benefits of 5G.
“Important thing about 5g is the need to focus on scale not speed,” said Topple. “When you architect, it’s important that you build the foundation for bigger ideas in the future.
“Need to be software defined, virtualised wherever they are, but also built for the use cases of tomorrow. 5g is not about today.”
Looking at the R&D work, in Sydney the team is working with Telstra and Ericsson to use 5G to support eSports. This is something which is very unique; gamers can become content creators inside the game as opposed to linear content platforms of the past. This impacts the way in which you build 5G for gaming. In Japan there is work with Docomo applying mobility concepts into vehicles. The need here is to make sure an effective handoff between base stations and radio heads occurs, while also maintaining the experience. With autonomous vehicle the environment will change from a cockpit to passenger experience, which Topple highlighted changes the way which we need to think about connectivity and engagement.
Other projects included drones in China for maintenance of the Great Wall of China, an initiative with AT&T in the US for create wireless networks to support 4K video content and smart mining projects in Estonia with Telia. Each of these examples build the case for collaboration.
A final example is a conversation with Jane Rygaard, Head of 5G Marketing at Nokia. Rygaard pointed to the development of 5G networks and Bristol is Open as a great of example of where collaboration can work brilliantly. In Bristol, the initiative has evolved into a mish-mash of university academics, the local authorities and private industry all collaborating with the aim of making 5G accessible and successful for the digital economy. It accounts for different perspectives, ultimately making connectivity more useful.
Bristol is fast becoming one of the most technologically advanced cities in Europe, but it pales in comparison to some of the Asia metro areas. Bristol has a population of roughly 450k, which allows for some interesting PoCs, but China has 120 cities with a population of more than one million people. The scale, should collaboration be done effectively, offers great opportunity to apply variables on PoCs and collect mountains of data to hone models and services.
Collaboration and co-creation might seem like a simple idea, but the foundations of the telco business need to be sturdy and thorough. Such practices need a new structure and external contributions to be a success, something which is starting to catch on in Europe now. That said, the Asian telcos are miles ahead.
Walking around the exhibition floor, the industrial use cases were clear. Almost every stand had elements of enterprise emblazoned on the temporary walls and stacked high in the marketing literature. Asia has been thinking about this evolution for some time, adapting business models, moulding the ecosystem and liaising with external partners to create a more fluid and innovative environment. Industrial applications, the solutions and the communication strategies to engage customers are much more mature.
Collaboration and co-creation might seem like fluffy buzzwords which can fuel the lofty ambitions of creative PR powerhouses, but there is substance to the claim. Those who genuinely embrace the fundamental changes to business which collaboration demands will find themselves in an attractive position to reap the rewards of the enterprise connectivity game. Those who simply use the buzz to empower the marketing department will soon be found out.
The US is going hard and heavy for the consumer side, while Asia readied itself for the wireless assault on enterprise. Europe dithered, without committing, and is now playing catch-up.
It is a comment which we have made several times across the last couple of months, but European operators are lagging behind counterparts in the US and Asia. You might not have picked up on this point if you listen to politicians, but it is true. It is of course impossible to pin this down to a single reason, but a lack of commitment is certainly one of them.
Of course, the European market is awash with telcos. Comparing the largest telco in each country to counterparts in US or some Asian markets is an eye opener. We might think O2’s subscription numbers as the leader in the UK is promising at 30 million (according to Ovum’s WCIS), but compared to Verizon at 160 million or China Mobile’s 1.125 billion subscriptions, perspective is seen. This is of course a factor, as are legacy networks, market penetration, political position and the complicated regulatory framework across the 28 nations in the EU, but a lack of commitment is the one which we are going to focus on here.
Speaking to Nokia’s Head of 5G Marketing Jane Rygaard at MWC Shanghai, there is a sense of progress, but pointing to dilly-dallying in years gone, Rygaard identified one of the reasons for the lag.
“Even in the last couple of months since Mobile World Congress in Barcelona, there has been progress, but Europe is still behind,” said Rygaard.
As Rygaard pointed out, winning in the 5G world isn’t as simple as hitting a switch. Business models have to be adapted and a new mentality has to be taken on by the business. Selling SIM cards is not the same as selling connectivity solutions to enterprise organizations. There is no ‘one size fits all’ model as there is in the consumer world; each vertical, or even organization has to be taken on its individual challenges.
Solutions have to be customised to the landscape and business objectives, while different metrics have to be taken into account also. Think about the smart factory environment; presenting a latency solution to a customer won’t necessarily tick all the boxes, precision of the machines has to be taken into account as well. While this might not be completely under the control of the telcos, it is certainly something which has to be factored into the solution.
This is where Europe has been lacking. The telcos have been speaking with great interest about serving each of the industrial verticals, but work adapting the business models to suit these industries has only begun recently. Just looking around the exhibition floor at MWC Shanghai, you can see the Asian telcos have been working on this aspect of the business for some time. It is comprehensive, consultative and thorough. It is almost ready for 5G, but something which takes time. Europe should look to emulate the position some of the Asian telcos have constructed, but evolution doesn’t happen overnight.
The US is slightly different. The 5G proposition there is much more consumer orientated. It’s bigger, badder and faster, a race to gain bragging rights to claim the ‘5G first’ title. It’s not necessarily a bad way to go about business, China Telecom might disagree, but a firm commitment gave impetus and fuel to the 5G ambition.
Europe sat somewhere in the middle. The consumer benefits were attractive, video is after all a never ending trend, while enterprise offered a bounty of untouched IoT and connectivity riches. Indecision and caution seem to be suitable adjectives, but one thing is certain, the non-committal, risk-adverse tendencies of the European telcos are certainly contributing factors to the cumbersome jog to the 5G finish line.
Ericsson, Qualcomm and Microsoft have all announced initiatives designed to move the whole internet of things thing along a bit.
At MWC Shanghai Ericsson and China Mobile (pictured) signed a cooperation agreement for the latter to use the former’s Device Connection Platform to augment its IoT efforts.
“Ericsson is a global leader in IoT with solid cooperation with operators’ associations GMA and Bridge (Association), providing connecting services for nearly 30 operators in over 100 countries and markets, and accumulating rich technical experience and industry resources in the field of IoT,” said Qiao Hui, GM of the China Mobile IoT Company.
“By launching DCP, we will be able to solve unified connection management and roaming across borders for our international customers, while at the same time share business opportunities in the global IoT market, which will further drive the expansion of IoT business overseas for China Mobile, and improve our market competitiveness in this field.”
Qualcomm, meanwhile, is claiming the world’s first commercial IoT development platform supporting field upgrade to LTE IoT. This also seems to involve China Mobile, which seems to be having a busy time of it at MWC Shanghai, a company called Gizwits, which specialises in IoT development platforms, and manufacturer Quectel.
“The expansion of the IoT depends on the ecosystem’s ability to deliver vast amounts of solutions featuring edge intelligence and flexible connectivity that stays current through the device life,” said Serge Willenegger, GM, 4G/5G and Industrial IoT at Qualcomm. “We are grateful of the opportunity to work with Gizwits, China Mobile Shandong Branch and Quectel.”
“The IoT enabling infrastructure is rapidly evolving,” said Jack Huang, CEO of Gizwits. “A challenge during this growing process for developers and manufacturers is the concern that the products they deliver today may not work well in tomorrow’s environment.
“For example, telecommunication operators throughout the world are phasing out 2G networks, leaving manufacturers with the tough choices of either sticking with the 2G modem technology that has worked well but may not be supported in the near future, or switching to LTE technologies, such as NB-IoT or eMTC, with limited network coverage in many regions.”
“The path of the IoT ecosystem toward 5G goes through LTE IoT, including the NB-IoT mode,” said Yong Chen, GM of enterprise business, China Mobile Shandong Branch. “Qualcomm Technologies and Gizwits are collaborating to help our customers get ready for the future as we deploy the latest cellular technologies across our network infrastructure.”
Lastly Microsoft has announced the general availability of Azure IoT Edge, its cloud platform for IoT devices. “Today, we are excited to announce Azure IoT Edge is now generally available (GA) globally – enabling our growing list of enterprise customers to bring their edge solutions to production,” blogged Microsoft’s Sam George.
“We are also introducing new robust capabilities on Azure IoT Edge to easily develop and deploy intelligence to the edge. These robust updates position Azure IoT Edge as a true end-to-end solution for enterprise-grade edge deployments.”
As 5G inches closer to reality, the industry seems to be getting real about IoT too. All three of these announcements seem to be concrete steps towards providing substantial IoT services to the market and China is looking like a major driver of that activity.
While the US and Asia stream ahead in the race for 5G, European telcos are unsurprisingly sceptical over investments; could video be use case which operators are searching for to justify investments in the technology?
It seems strange to be talking about hardcore justification in Asia. While US operators are moving forward aggressively in 5G due to competition, the mood in Asia seems to be somewhat more optimistic. There appears to be a sense of ‘build it and they will come’ for 5G, investing in the potential of the technology, not the immediate gains. That said, few would complain about a silver bullet to solve all the uneasy questions surrounding investments.
This is what David Lynne, CEO of Viacom International Media Networks, is preaching. For those who are nervous about the prospect of reaping the rewards of the connected economy, video could be the validation needed.
“For this to work, mobile has to establish itself as a platform for TV,” said Lynne during his MWC Shanghai keynote session. “This can be a selling point for 5G.
“Many are sceptical about the use case of 5G, but it will allow mobile to compete with traditional platforms for pay TV content. Increased reliability and reduces latency to make the experience the same. Video will surely play a critical part of selling the 5G benefits to customers.”
For years the price of data has been tumbling making the telco business a tricky one to thrive in. Parallel to the decreasing price per GB, consumers are becoming more demanding, expectant of bigger bundles or even unlimited tariffs. With connectivity ARPU decreasing, and network demand increasing, the economics are not favourable. One of the theories of 5G is price stabilisation; with decreased latency, alongside increased speeds and capacity, operators might just be able to halt the trend of shrinking ARPU, and perhaps even increase it.
This is where some of the telcos are sceptical; it all seems too good to be true, but Lynne is convinced a thorough mobile video platform could offer genuine competition to the traditional means of consuming content on smart TVs and even PCs or laptops.
“I’d like to focus on one number; 78,” said Lynne. “This is the number which Cisco predicts will be the percentage of video internet traffic by 2021.”
As it stands, the majority of this content is in short-form, or VOD services such as YouTube. Though Viacom is currently working with a number of telcos who are Viacom’s content into packages to increase engagement and potentially revenues.
“It is an emerging business model though,” said Lynne. “Mobile providers know about experience and delivering, but not much about keeping the customer entertained. Some are bundling live video into billing. At its most effective, these can drive NPS (Net Promoter Score) and revenues.”
Examples of this include Telefonica’s Movistar in Latin America, where it offers both linear and on-demand content as a premium service, or AT&T which is bundling Paramount content into unlimited data packages. Some are even using the MTV and Comedy Central brands to engage younger audiences with customer content platforms. These are all examples of taking video to the next step on mobile. It isn’t just about short-lived experiences, but a genuine long-form video proposition.
Video is a trend which no-longer needs to be justified to the industry; it is growing faster and faster every single year. While this is certainly a strain on the network, there is an opportunity for the telcos to create relevance beyond being a connectivity utility in the digital era. A genuine and comprehensive video platform can be a challenger to traditional video platforms, justifying the 5G expense.
Mobile doesn’t just have to be for cat videos.
Mobile chip giant Qualcomm used the first day of Mobile World Congress Shanghai 2018 to launch new chips for smartphones and watches.
Qualcomm has the market for third party smartphone SoCs sewn up at the premium end, but Chinese chip-maker Mediatek, among others, is giving it a run for its money in the middle and lower tiers. It’s presumably no coincidence, then, that Qualcomm chose this event to make its mass market chip announcements.
The Snapdragon 800 range is all about the premium tier, then we have 600s for the high tier and 400s for the mid tier. Qualcomm just announced the Snapdragon 632, 439 and 429, which will all be a bit better than their predecessors at things like performance, battery life, and that sort of thing.
“The introduction of Snapdragon 632, 439 and 429 builds off Qualcomm Technologies’ highest-selling mobile platforms and provides users with increased performance and power efficiency, superior graphics, AI capabilities and enhanced connectivity features,” said Kedar Kondap, VP of product management at Qualcomm. “We’re excited to offer these new platforms with enhanced features to our OEMs and consumers.”
The 632 SoC features a Kryo 250 CPU, an Adreno 506 GPU, the X9 LTE modem, and supports a 24MP camera. The 439 has an Adreno 505 GPU and the 429 has an Adreno 504 GPU. No branded CPU cores are detailed, which probably means they use off-the-shelf ARM cores. They support 21MP and 16MP cameras, respectively.
Qualcomm’s other announcement at the show was a new chip designed specifically for the kind of cheaper smart watch you might give to a child. The Snapdragon Wear 2500 Platform has features like extended battery life and low power location tracking so you can keep an eye on where your kids are. The platform also has an LTE modem and a special version of Android designed for kids.
“If you look at the targeted kid watch and tracker segment the growth in these designed-for-kids but highly capable devices, is very exciting, and customers are seeing wide spread global demand,” said Anthony Murray, GM of Voice, Music and Wearables at Qualcomm. “Qualcomm has helped to drive this fast expansion of 4G kid watches with its Snapdragon Wear 2100 platform and there are more than 10 devices commercially available today through retail and carriers,”
“With this next generation Snapdragon Wear 2500 platform, we are supporting new performance and features that customers will be able to use to create even more fun features and compelling use cases for these connected 4G kid watches and with our dedicated kid watch platform we aim to deliver a robust foundation that supports a rich and engaging experience for children.”
There is lots of talk about the whole platform and how great it is for this sort of thing. It supports limited camera, AI voice assistants and name-drops NXP NTC technology that can be handy for giving kids some limited digital wallet functionality. The marketing for these sorts of devices is understandably aimed at parents and talks about things like fitness tracking too. It’s not clear, however, how much traction there is for kid-oriented smart watches and for them to take off they would probably need to be pretty cheap.
We are paraphrasing with the headline, but the message from Lui Aili, President of China Telecom was very simple; evolve from a consumer focused business or struggle.
To demonstrate this message, Aili used a bowl of soup as an example. At the beginning the bowl of soup is full, but every time it is nudged a little spills out. Keeping the bowl steady is impossible, therefore the volume of soup will always be decreasing. The volume of soup is the total revenues in the telco industry, while the nudging of the bowl is the constant battle for consumer subscriptions.
In China, mobile subscriptions already exceed 100% of the population. It is an incredibly saturated market, with little room to grow. There might be more consumers entering into the dual-SIM lifestyle, but this is already a trend which has been developing for some time. Relating this back to the analogy, the bowl is unlikely to get any bigger any time soon, therefore the volume of soup is also unlikely to increase.
This is the challenge with the consumer facing business. Every time a telco steals a customer (nudges the bowl), the monthly subscription of that user also decreases. When this happens numerous times, the total amount of revenue in the industry gradually decreases (soup spills out of the bowl). Undercutting current providers is the primary way in which telcos gain new subscriptions, and it does not look like there is grounds to justify an increase in ARPU right now. This might change with the introduction of 5G subscriptions, but that remains to be seen.
This is one challenge for the industry, the total revenues are getting smaller, but parallel to this, the demands of the consumer are also increasing. Aili points to global trends of increased data consumption as a worrying sign. Delivering on these expectations, limitless data tariffs are starting to become the norm nowadays, is an expensive business. With this in mind, focusing on the consumer connectivity business is a slow erosion of revenues.
The ambition of China Telecom is a simply one; as it stands it owns the pipeline of connectivity, but the future is all about owning the platform and content as well. In the household, this looks like delivering connectivity, but also the smart home platform which manages applications and products, but also content in the entertainment world. While it might seem like a simple point to make, there still are telcos out there striving to dominate consumer connectivity alone; with the soup bowl gradually emptying, and increasingly becoming more expensive to maintain, should this be deemed a sensible business model?
China Telecom doesn’t want to be a telco anymore, the ambition here is to be an intelligent services company, sounding very similar to cousins in the OTT world.