This year’s big telecoms get-together revealed an industry going through an identity crisis.
The headline question might seem like a strange one for a website with this URL to ask but we’re no longer sure we have a good answer. Since its invention in 1876 the point of the telephone (etymology: far away voice) was obvious – to be able to speak to someone who was too far away to hear your voice otherwise.
Over the ensuing decades the enormous commercial, political and social potential of being able to speak to anyone, anywhere (belatedly represented in the EE brand) became fully realised, to the enormous profit of the national monopolies that controlled it. Then, at around its centenary, we worked out how to send data over those same networks and the telecoms world exploded once more.
Almost half a century further on, however, much of that momentum seems to have left the industry. It could be argued that the most significant innovation since the creation of the internet is the touchscreen smartphone coupled with mobile broadband. But that was 15 years ago and has only progressed in minor increments since then.
Ahead of Mobile World Congress 2023 we asked “what’s the point of 5G?” hoping that we may have some kind of answer a week later. On the contrary we have come away with an even greater sense of existential anxiety about the state of the industry.
Of course there were infinite chats to be had about various technologies, efficiencies, initiatives, and partnerships but what the point of any of them in the great scheme of things? At the start of the week we reported on Nokia’s struggles to explain the point of its rebrand, let alone the industry. The next day we wrestled with the bewildering complexity of today’s telecoms proposition, with even Ericsson conceding the lack of obvious new sources of revenue offered by 5G.
Led by show organiser the GSMA, the operator community seems keen to jump on the ‘network exposure’ bandwagon, but it’s still not clear who we’re exposing it to and for what commercial purpose. We got the impression from all concerned in that initiative that it’s very much a ‘build it and they will come’ approach, with no guarantee of success. It’s increasingly clear that the same applies to 5G in general, certainly to a far greater extent than previous generations.
Huawei attempted to make the case for 5.5G, which served to illustrate how disappointing it has been so far, while Nokia seemed happy to be already looking towards 6G. The process of innovation is constant, of course, and the very concept of a G is increasingly unhelpful, but it does feel like a critique of 5G that so many in the industry are already looking beyond it.
Speaking to one senior figure from the operator side who preferred not to be named, we learned that they were underwhelmed by the operator offering this year, especially when it came to use-cases. While the vendors produce the tech, it’s surely the job of CSPs to bring it to market and get people to pay for it. One suggestion was to focus on collaboration; why not have use-case-focused, rather than company-focused stands at the show?
We also discussed the relative inefficiency of operators. Automation is a current buzzword but how much of that is actually going on? Instead of paying public cloud giants millions to take care of their convoluted business, operators should be making savings from automating as much as possible. Maybe that would help them to get back to their core business of helping their customers solve their communications problems.
Having moaned about a focus on arcana rather than use-cases, we were stuck by how little talk there was at MWC 2023 about Open RAN. Maybe that was an acknowledgement that, while opening up the radio to more providers is a nice idea, it doesn’t propose anything significant from a commercial point of view. Similarly cloud RAN and vRAN. We all get the potential of virtualisation and cloudification, but what communications problems do they uniquely solve?
A further illustration of the commercial bind operators find themselves in is their insistence, in Europe at least, that US big tech should be forced to give them money. Netflix used the show as an opportunity to flip the ‘fair contribution’ argument and, even if the EU decided to take the side of its operators, that would set a precedent that would encourage operators to rent-seek rather than innovate.
In a way previous generations never were, 5G is a massive gamble. The telecoms industry is offering up a trove of arcane but niche technological capabilities that it hopes someone else might figure out how to monetise. Maybe they will but this year’s MWC felt like everyone was in waiting mode, hoping someone else would solve the 5G use-case/monetisation problem so they could jump on their coattails.
When we asked the operator figure what the point of telecoms is they said it’s “very uncertain”. The danger of becoming a ‘dumb-pipe’ utility seems greater than ever. Nobody seems to know what communications problems need solving other than even more ubiquitous connectivity with undefined monetisation potential. If we’re no closer to answering that question by MWC 2024 then we’ve got real problems.
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