Behind the scenes in Barcelona: A somewhat perplexed crowd of mobile executives

As Mobile World Congress 2015 wound down at the end of last week, organizers the GSMA declared it the biggest and best ever. The statistics were truly impressive, with 93,000 visitors to the event — 52% of whom were C-level executives — and more than 2,000 exhibitors (both up about 10% on MWC14) with record numbers of CEOs, senior government officials and journalists/analysts in attendance.

There were a lot of headline grabbers, from controversial keynotes and surprise winners of the prestigious Global Mobile Awards, to the confirmation of the Internet of Things (IoT) and 5G as the centrepieces of the industry’s attention and investments going forward. Buzzwords from vendors, many of whom organised impressive demonstrations, presentations and seminars, included Big Data Analytics, Network Function Virtualisation (NFV) and Software Defined Networks (SDN), spectrum-use efficiency and technologies to allow operators to monetize exponentially-growing data usage.

MWC became the MOU show, with hundreds of memoranda of understanding being signed. Perhaps more co-operation agreements to work together on new technologies and business models were signed in the week of MWC than would normally be seen in the rest of the year.

There was a glitz-krieg of new products, with the star of the show being Samsung’s new Galaxy S6 smartphone—although more than 30 smartphones from all the major vendors (except, of course Apple which has its own presentational event on Monday March 9) and some minor ones as well were unveiled. Device makers also launched a plethora of new wearables from watches (pre-empting the expected iWatch launch on Monday), through wristbands to glasses and an attention-grabbing 3D virtual reality headset from HTC.

But at the end of the day, there was a feeling of unfinished business and a general miasma of worry hanging over the mobile service providers in particular. And this was to do with the issues underlying the topic of Net Neutrality, which was talked up by US Federal Communications Commission Chairman Tom Wheeler during the opening day keynote. Wheeler was shot down in flames not just by operators and vendors, who objected to him becoming the de facto arbiter of new business models, but also by his fellow FCC Commissioner Michael O’Reilly. Facebook founder Mark Zuckerberg gave a diplomatic presentation during the following day’s keynote about the advantages of operators and OTT providers working together.

Against this background, operators talked behind the scenes about the issues underlying net neutrality. They expressed concerns about the lack of regulation of OTT players, despite strict regulation of themselves, and stressed the need for a “level playing field.” They talked of the huge problems being caused by Google, Yahoo and others encrypting their network traffic, which means the network carrying it cannot manage it. Growth in revenue has been lagging growth in traffic for some time now, and the inability to properly manage networks is exacerbating the problem. And this leads on to the need for operators to be able to monetize the new mobile Internet traffic, particularly with the growing impact of the IoT. Because if they can’t monetize it, investment in new network rollout will dry up, and there is a real concern the FCC’s net-neutrality intervention will have precisely that effect—while the lighter-touch approach of the EC and EU could give a boost to European investments and allow Europe to catch up with the US in the wireless broadband stakes. Australia’s user-pays model shows what can be achieved.

There is a recognition amongst operators of a general need for a change in strategy and adoption of new technology, particularly younger executives. They are much more optimistic about the future than their older counterparts, who built the industry facing the very different challenges of the pre-data period. The pieces of the puzzle are there, and many were on show or up for discussion at MWC15. The challenge going ahead is to assemble the pieces before it is too late for some operators. The stark reality of the situation was outlined by the respected Cisco CEO John Chambers, who told a MWC15 press conference 50% of today’s service providers could be irrelevant in 10 years’ time as they fail to adapt in a fast-moving digital world.