Bringing innovation to the forefront

Big data, smart cities and M2M were among the topics that excited mobile operators
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Companies at Mobile World Congress (MWC) have gathered to shape the future of the mobile industry and, therefore, the future of citizens. Technology is intrinsically linked to people’s lives and MWC was the perfect platform to show how the mobile industry will change our cities and the way we interact with each other, and with technology.

In order to promote this change, the industry needs to focus on its sustainability, as the companies offering services over the top often seem to be profiting at a higher level than the operators. Operators announced partnerships and deals to improve their core business as they announced projects in new business verticals that aim to increase their revenue. Moreover, internet players and operators continue to discuss the issue of how they can develop more effective partnerships that will allow for sustainable development of the industry.

“We find more focus this year on how to enable mobile network operators (MNOs) to generate more revenue as opposed to a focus on performance which is characteristics of past years,” Riad Hartani, analyst at Xona Partners, said to CommsMEA.

During the first evening keynote of the event, Mark Zuckerberg, CEO of Facebook, acknowledged that the telecoms infrastructure required for mobile broadband is costly, but offered telcos little in the way of advice on how to ensure sufficient ROI on 3G and 4G services. “In order to grow the Internet, we need to grow the infrastructure and that needs a lot of money. We need to grow the operator’s business faster,” he said.

“We can help because Facebook is one of the primary apps that people use, we can partner with operators to grow. The companies that are driving this growth are the operators because of the investment that they are making,” he added.

Regarding the new business model Zuckerberg didn’t share possible solutions, but he appeared keen to remind delegates that OTT services increase the data usage. “I don’t know how the business model should be. What we know is that Facebook drives data usage. When people are getting data for the first time, they buy voice and messaging and then they want to get in touch with their friends and family and that is what social media does. We realised that we need to be sustainable.”

Hans Vestberg, president and CEO of Ericsson, also discussed the transformation in telecom business models and spoke of the role that vendors should play as enablers of this change. “New business models are emerging, along with new ways of solving old problems that create new efficiencies. True customer intimacy can be created using digital tools. All in all, you can see that ICT drives transformation that is really changing the game," he said.

To promote this change, operators are improving their networks and relying on machine-to-machine (M2M) services to bring new and consistent sources of revenue. According to Vestberg, LTE subscriber growth will exceed 80%; and world mobile broadband coverage will be above 70% during 2015. For these reasons, some operators in the MEA region are already in talks with their vendors to discuss the requirements of 5G.

However, Hartani adds that there is much work to be done in terms of agreeing standards for 5G. “The process of standardisation awaits the industry to define what it wants from 5G and there’s no shortage of opinions. Spectrum is yet to be defined, but will be on the agenda for WRC-15 later this year. As for requirements, the general consensus is on the need for scalability and power efficiency in addition to capacity, which is not the sole driver,” he said.

Günther Hermann Oettinger, commissioner of digital economy and society at the European Commission, participated in ‘The Road to 5G’ keynote, and said that what is needed is a standard that combines most wireless infrastructure seamlessly from Wi-Fi and Bluetooth to 3G and 4G with “rock solid resilience”, as 5G will be the infrastructure for the next 20 years.

The shift that operators are witnessing also includes the transformation to digital. “There is a new logic being applied across industries. We can see a definite shift from physical products to digital services,” Vestberg said.

John Chambers, CEO at Cisco, said that his company was late when offering Software Defined Networking (SDN) but has led from the beginning on Network Functions Virtualisation (NFV). NFV takes functions that used to live in specialised appliances and turns them into applications that can run on generic hardware or in the cloud.

“Virtualisation demonstrations showed an increasing operator confidence in building their networks on commodity IT platforms, making software, not hardware, the differentiator,” said the consultant firm Current Analyst.

Telcos across the globe are embracing the Internet of Things (IoT) and are ready to offer consumer and industrial services. “We are clearly at the early stages of IoT 2.0. This was evident by the presence of IT solution and service companies looking to provide backend solutions and services that leverage connectivity of devices. Intelligence and security are the game here. Companies such as IBM, SAP, and many others are moving fast to adapt solutions for this nascent segment,” said Hartani.

The rise of smart cities in the MEA region brings a great opportunity for the telecoms sector to support the vision of governments and enhance the profits of the operators. Hartani highlighted that innovation and the need for more start-up business in the region will boost the growth in this specific sector.

Operators in the region, such as Ooredoo, Etisalat or Zain, were acting on these trends, as they inked partnerships to enable this transformation in the region. For instance, Alcatel-Lucent and Etisalat sign a deal to development network performance technologies. The operator also partnered with Huawei to develop a framework for M2M and IoT.

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