MWC 2017: What to expect

Ovum’s predicted major congress themes to follow and market trends to watch

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SummaryIn briefThe Mobile World Congress (MWC) takes place in Barcelona next week (February 27–March 2) and will see both traditional service providers and internet players announce new services, relationships, and technologies.

MWC 2017 marks a further shift in the evolution of the industry, toward the current situation where the internet is everywhere, every-”thing” is smart, and machines are ever more intelligent. As each year passes, the conference feels less like a mobile communications congress and more like an event geared toward the internet and its emerging technologies.

In 2017, we expect that most digital service providers will pitch new entertainment services through relationships with content providers and internet-based platforms. Many service providers will also set out their vision of smart home and will tout new platform relationships with Alexa and Siri. On the other hand, the internet players, through their own digital services strategies, will be seeking to position their platforms to the service provider community in order to extend their subscriber base.

The world of entertainment and content will also be the source of hot debate. Netflix will lead the charge, with CEO Reed Hastings launching a charm offensive aimed at striking a variety of partnerships with mobile operators. Major media groups will also be in force, presenting new ways of packaging their conventional TV and digital video content for the telecoms industry.

MWC 2017 – the key congress events to follow The key overarching industry trends to follow at the conference will be:

The rise of the power and profit of contentContent platform owners and producers are the new big players at the conference and will take center stage. With the objective of extending their platforms and reach of their content, these players will use MWC 2017 to create new content relationships and ways of working with vendors and service providers.

New relationshipsWhile content platform owners will generate some of the biggest headlines this year, social, messaging, and communication platform owners will also be looking to extend their platforms. Part of this endeavor will include the traditional telcos. Expect a good measure of new voice, messaging, and social platform announcements, in particular with Alexa and Siri. Some operators, such as Korea Telecom, will announce enhancements to their own platforms. We will also see the resurgence of some old friends, notably Nokia and BlackBerry, each of whom will launch new devices.

The (technically) augmented customerThere will be bold statements by many about an emerging set of technologies that represent a step-change in the spread and sophistication of consumer and enterprise behavior. This technology will enhance people’s lives in increasingly powerful ways. This shift allows for greater personalization of products and automation of everyday tasks. We will be sharing our view of the augmented-customer opportunity following MWC.

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Smartness everywhere – anytime, anywhere, anythingIn mature markets, the industry has now largely achieved its mantra of connectivity anywhere, anytime, to any device. The new lexicon of the augmented customer will increasingly take over as a means to deliver the touted possibilities of the future, by delivering “smartness” everywhere, through every-”thing.” As the B2C and B2B2C face of the IoT, smart living will be the biggest overall consumer theme at MWC this year. Smart living captures an array of product and service concepts that sit around the technically augmented customer – from metering to health monitoring, cars and fridge, to smart washing machines.

Automotive OEMs and their technology partners will have a record industry presence at this year’s event, and there will be plenty of examples of the ongoing evolution of automotive manufacturers into serious technology players. Watch out for other B2B2C industry solutions that will be on display as well. On the enterprise/B2B IoT side, look for many new examples of use cases and co-creation partnerships among technology vendors, service providers, and end users in both public and private sector verticals. In support of this, we expect to see announcements of creative new ways of enabling simpler, lower-cost delivery of IoT solutions – whether through low-power WAN technologies such as NB-IoT, or through “wholesale” or MVNO-type IoT managed service offerings.

The value (and vulnerability) of data comes of ageAs both enterprise and consumer IoT technologies and use cases continue to develop, the real promise of deriving value from IoT data will be a key theme at MWC. The benefits of automation and personalization are built on real-time environmental and customer data that can be monetized. But with opportunity comes risk. The flip side of the improved customer experience and sustainability enabled by feeding personal and IoT data into emerging AI engines is the vulnerability of that data to hacking, or to simply being shared in ways not foreseen (or authorized) by those creating it. We will hear from service providers, vendors, and end-user organizations on how they will manage the disruptive business models – and consequential privacy and security issues – that surround the use and commercialization of customer data.

5G – don’t believe the hypeMany different visions of 5G will be presented at MWC 2017. While there is consensus around the technology that will sit in the radio access network, differences of opinion exist around the extent to which SDN (software-defined networking) and NFV (network functions virtualization) will be part of 5G. Furthermore, while the business models of telecoms operators were never really in doubt when the 3G and 4G standardization processes were undertaken, the same cannot be said of 5G.

Our top picks for keynote presentationsCEO keynotes can be bland rehashes of what we already know, or (more rarely) they can be enlightening and stimulating because they set out how a major player will shape the industry. We have picked what we think will be the best of the bunch this year:

• This year’s must-attend keynote is from Netflix’s Reed Hastings. Just as Mark Zuckerberg set out Facebook’s relationship with the industry at MWC two years ago, Netflix will set out its stall in terms of how it will increasingly work with others. With growth set to slow after a record year in 2016, Netflix needs to find new ways to grow its business and it is clear it cannot do that on its own. Rob Gallagher has written on Netflix’s prospects and likely outlook here, which is worth reading before the event.

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Similarly, we expect John Martin from Turner to position its new content relationships and new forms of delivery.

• Speaking of convergence, we are curious to hear what John Stankey, CEO of AT&T’s Entertainment Group, will say – potentially not much, given the uncertainty over the US operator’s proposed acquisition of Time Warner and the regulation of telecoms and media under the Trump administration. But we would advise hedging your bets, just in case he does reveal more about the plan behind the biggest telecoms and media mega-merger to date.

• Telefonica’s José María Álvarez-Pallete López will likely provide further detail on the company’s new service portfolio and technology transformation program, which we assume would include new examples of a service provider applying AI. We had a sneak peak of Telefonica’s strategy back in September 2016 and commented on it here. We liked what we heard at the end of last year, but details were lacking on the commercial premise and any new third-party relationships that the company would need to deliver such a strategy. More detail could be unveiled at MWC, making this one of our top picks of the conference.

• Korea Telecom’s Chang-Gyu Hwang is keynoting again, and we think he will set out his 5G, IoT data value chain, and Gigatopia vision. This keynote definitely will be worth attending in order to understand KT’s progress on 5G and hear an innovative view of smart home and the wider industry.

• We have little indication of what we will be hearing from Allison Kirkby of Tele2. We are highlighting this keynote because Tele2 is a European front-runner in 5G and smart home (along with Deutsche Telekom, which is not keynoting). However, we expect we may hear about the rollout of LoRa technology, which will connect low-power devices as part of the IoT, and the company’s 5G rollout. Tele2 has a growing entertainment business, so discussion of a new content deal is a possibility. Tele2 is our wildcard – it is most likely to offer the unexpected.

• We will also be at Nokia’s Rajeev Suri’s keynote, as we expect to hear about a new strategy for the firm and updates on IoT and 5G. We will also be watching with interest to see how much emphasis he places on the “consumer” in his outlook and what progress the business has to report on Withings and its high-end virtual reality business Ozo. We also expect mention of a new N-series of devices (via HMD). Rumors are that the first model is the N95.

There are many panels, but we have gone through the auditorium agenda and picked out our top five to attend.

• Cars as a Service, Day 2, 14:00–15:00, Hall 4, Auditorium 2

• A poorly named session, but further reading shows that this panel offers great promise because it aims to explore how new partnerships are forming between media companies, automotive manufacturers, and other ecosystem players in the automotive market. This is an impressive panel including Hertz, Uber, Nokia, BMW, and Accuweather, and we think this will be a provocative session.

• The Future of Messaging Platforms: Engagement, eCommerce and the Consumer, Day 2, 12:15–13:15, Hall 4, Auditorium 2

• An exploration into the evolution of messaging. The panel will discuss how apps are adding new features, enabling conversational commerce, and including advertising, chatbots, and payments, so there is plenty of opportunity for growth in this area. The session is also hosted by Ovum’s Pamela Clark-Dixon, so it will be excellent!

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• Digitizing An FMCG Giant: The Nestlé Recipe, Day 3, 13:00–13:30, Hall M8 – Fira Montjuic, Nestlé Stage. Filippo Catalano, Chief Digital Operations Office, Nestlé

• Representing more of what we would like to see on the main stages, a firsthand view of how a multinational is exploiting new technologies in FMCG (fast-moving consumer goods). Likely to be revealing and well worth hearing firsthand from Nestlé’s chief digital innovator Filippo Catalano.

• Artificial Intelligence: Automation and Robotics, Day 3, 14:15–15:40, Hall 4, Auditorium 5. Lester Thomas, Chief IT Systems Architect, Vodafone

• In what appears to be a quiet congress for Vodafone, Lester Thomas’s session on automation and robotics will be a highlight for us. This panel promises to be a useful update on the technology, but it is the focus on what the technology means for the operator that has caught our eye.

• Consumer Data: Privacy and Opportunity, Day 2, 14:00–15:00, Hall 4, Auditorium 3. Ludovic Levy, Vice President, Global Data Strategy & Governance, Orange

• Privacy will be at the forefront of the discussion this year, with many panels at least highlighting it as an issue. This looks to be the one to attend, due to the strength of the panel, but we are particularly interested in Ludovic’s views and how Orange is responding to privacy issues.

Top trends to watch at MWC 2017We have highlighted our top trends for the conference and whom to look out for at the event. In each section below, an Ovum analyst has set out their thoughts on what to expect this year.

Trend 1: A turning point for mobile videoAnalyst: Rob Gallagher, Research Director, Consumer Services

Figure 1: Global, cumulative operator/OTT video partnership announcements by type, 2013–16

Source: Ovum

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Netflix will call for new modes of collaborationMWC 2017 will mark a turning point in relations between the mobile and TV industries, as the CEO of the world’s most important video service provider Netflix takes to the keynote stage. Ovum expects Reed Hastings to use the opportunity to launch a charm offensive aimed at striking partnerships with mobile operators similar to those it has with fixed broadband operators, such as Comcast, Liberty Global, and BT. We think he will be after four things: technical collaboration around the cellular delivery of Netflix; inclusion in mobile phone bundles, similar to the approach pioneered by Spotify; tapping mobile operator billing systems to turn “unbanked” people without credit cards into paying Netflix subscribers; and solutions to the opportunity – and threat – of operators zero-rating mobile video traffic. We also expect certain consumer technology giants more active in the advertising side of the online video market to be strolling the floor seeking to agree to more mutually beneficial arrangements with mobile operators around the handling and pricing of mobile video traffic. Major media groups will also be in force presenting new ways of packaging their conventional TV and digital video content for mobile operators. The key questions to ask relate to costs. Will operators be expected to pay traditional carriage and licensing fees? Or will content providers be prepared to entertain some kind of revenue share? Or will deals revolve around co-marketing mobile phone and app bundles? Expect content providers to be vague about terms in public, but be assured that operator mobile video partnerships will continue to grow (see Figure 1).

Improving the quality and economics of mobile videoLast year saw live-streaming, 4K ultra-high-definition (UHD), and virtual reality (VR) video edge up the industry adoption curve. Technical discussions at this year’s MWC will focus on delivering these formats to mobile devices at the best possible quality and cost. Solutions will include deploying caches and computing power (both physical or virtual) deeper within mobile networks, employing multicasting at various levels, using systems to preload popular content on users’ devices during off-peak hours, innovations in video compression and transcoding, and advanced analytics The most important questions to ask about these technologies is not how they will work, but what business models they will support – or undermine. Will higher-quality services deliver a meaningful return on investment (ROI)? Will any savings be great enough to deliver better value-for-money for consumers? Which parties will define and control these new platforms – mobile operators, content delivery network (CDN) providers, video service providers, or technology giants like Google, Facebook, and Amazon? Which parties will pay to use them and how much? Or will use of the infrastructure be offered more or less for “free,” with the understanding that all parties will benefit from delivering great video experiences to consumers? Again, do not expect all the answers at MWC; these debates will play out over several years. In the meantime, attendees should seek out vendors that can address a more immediate challenge: gaining a unified understanding of how to ensure and monetize video quality of experience (QoE) across multiple formats, devices, networks, and platforms.

The inevitable overstatement of cellular’s roleAs with previous years, operators and vendors at MWC will no doubt continue to confuse “cellular” video with “mobile” video. What is the difference? While video traffic generated by smartphones will increase to 28% of total internet traffic in 2020, cellular’s share will increase to only 14%. Why? Because the vast majority of smartphone video viewing will continue to happen when consumers are not exactly “mobile” – that is, when they are at home and connected to Wi-Fi. Improving the quality and reducing the cost

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of delivery will make viewing over cellular more palatable to consumers, but it will not change the fact that the home will remain the most comfortable and popular place for viewing. This confusion will be evident in vendor pitches that overplay the role of the mobile operator in the delivery chain and products that add unnecessary cost and complexity to video service providers. Hype around 5G will only make this problem worse. Attendees would do well to challenge vendors on how these “solutions” will meaningfully impact the viewer experience and so translate into real business value, especially given that even the most sophisticated systems will be let down by poor mobile broadband coverage and blackspots that continue to blight towns and cities as well as rural areas. In most instances, network operators, video service providers, and vendors would be best-served by fixing problems with the home network, as that is where the real pinch will be increasingly felt with “mobile” video. If there is one area of cellular video that attendees should focus on, it is live streaming, because sports, news, and new forms of live video will be the principal drivers of viewing outside of the home.

Whom to look out for at MWC:Mobile video is a topic that sits at the intersection of telecoms, media, and technology, so it would be foolish not to pay a visit to the big integrated network and platform vendors Cisco, Ericsson, Nokia, Huawei, and ZTE. If you are interested in more of a managed video service offering, drop in on Kaltura, PCCW Global, Quickplay, and Verizon. We would also recommend visiting the stands of Akamai, Broadpeak, Fraunhofer Heinrich Hertz Institute, Giraffic, Qwilt, and Vasona Networks to hear their takes on addressing the challenges of delivering 4K, VR, live streaming, and other emerging forms of video to mobile devices. Cedexis and Nice People At Work should be able to shed light on understanding and ensuring video QoE, while CSG International can talk about monetizing video across multiple platforms.

Trend 2: Ever more connected things Analyst: Alexandra Rehak, Practice Leader, IoT

While not our most contentious prediction, we expect to hear a lot more on IoT across the industry.

Licensed spectrum LPWA technologies will be front and centerMany announcements and demos are expected at MWC, with heavier emphasis on NB-IoT. We are seeing various deployments going live from a number of operators, and we expect to see more announcements about trials, and planned rollouts of commercial services, from both service providers and vendors.

Expect to hear more about LTE-MTC-Cat M1 (LTE-M) initiatives from the North American operators and their vendor partners, and to hear some debate about which of these technologies is likely to dominate, whether in specific geographies or for specific use cases.

We will see many LPWA use cases coming to the fore, particularly for smart cities. Many of these will be NB-IoT based, but there will also be announcements regarding further unlicensed spectrum deployments – Sigfox’s reported 2018 IPO plans mean that MWC will be an important forum for Sigfox to announce new partners and deployments.

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Figure 2: LPWA deployments worldwide – live, trial, and planned, January 2017

Source: Ovum LPWA Tracker

Expect to hear a lot about how IoT data value propositions are evolvingMWC will provide the opportunity for many discussions around innovative approaches to data usage, data storage, data ownership, data sharing, data lakes, and open data – all of which will have a direct impact on the evolution of IoT. Analytics sits at the core of IoT value, with important questions around how to make sure that enterprises and networks/applications are collecting “just enough” data from IoT devices, analyzing it at the right point in the network or transaction flow (distributed and real-time analytics will be important themes), and directing it toward something actionable.

Expect to see systems integrators and applications/software providers making announcements in this area (e.g., salesforce, SAP), and ongoing confusion from end users about how to derive clear value from IoT data. We also expect to see announcements (and demos) of more machine-learning applications fed by IoT data – the first wave of artificial intelligence that is being directly enabled by, and some cases integrated into, IoT applications. Look out in particular for applications in the industrial world, autonomous/assisted driving, and smart home.

We expect to see more IoT-in-a-box–type solutions both generally and for specific verticals (and particularly aimed at SMEs). We have seen many announcements of this type in recent months, and there will be a stronger trend at MWC toward providing bundled off-the-shelf IoT solutions which come pre-integrated with specific platforms, cloud services (e.g. AWS), and security and analytics support. Vendors, technology players, and communications services providers will all be pushing these kits, with the aims of encouraging IoT applications development on their own platforms and technologies, and gaining a better understanding of the universe of IoT device and applications possibilities – as well as insight regarding which of these will prove compelling to end users.

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Whom and what to look out for at MWC:• Pavilions and exhibits: For IoT demos, visit the GSMA Innovation City, Internet of Things Pavilion, and

Wearables Pavilion.

• Announcements from the leading service providers about LPWA deployment and commercialization, including Vodafone, Telefonica, Telenor, AT&T, Verizon, NTT DoCoMo, SK Telecom, Orange, and China Mobile, as well as Sigfox for unlicensed spectrum LPWA.

• Platform updates – and potentially some interesting new business models around providing end-to-end IoT solutions as a service – from leaders in the industry ecosystem: Cisco Jasper, ZTE, Huawei, Nokia, Ericsson, Philips, Samsung, Gemalto, and PTC ThingWorx.

• Verticals: We expect to see a number of industrial players announcing new IoT partnerships and products at MWC, including Bosch, GE, Philips, Hitachi, and Mitsubishi. Automotive OEMs will have their strongest showing ever at MWC, marking a new phase in their evolution toward becoming technology companies. Also look out for new smart home announcements and demos from leading appliance manufacturers.

Trend 4: The (re)birth of old device brands and AI to become the new must-have smartphone feature Analyst: Ronan de Renesse, Practice Leader, Consumer Technology

MWC 2017 will see the comeback of old smartphone brands BlackBerry, Motorola, and Nokia, with new handset models expected to launch at the show. This will be nowhere near the former glory of 10 years ago, but rather will focus on specific niche products with limited market impact.

Samsung will be notably absent from the show this year in terms of announcements, but it will still have a booth where attendees can try Galaxy A mid-range smartphones, the Gear S3 smartwatch, and Gear VR. This will play to the advantage of other device-makers Huawei, LG, Sony, and ZTE, which are all set to launch their flagship smartphone models at MWC, possibly along with other products such as tablets, wearables, and VR headsets. Those devices that we refer to as the Internet of Smartphone Things (IoST) will not see the same level of appeal as last year though.

Instead, AI-powered smart assistance will be used as a key differentiator among the various devices to be released at the show:

• Huawei already announced the Mate 9 at CES, which features Amazon’s Alexa. This may be extended to the P10.

• HTC Sense Companion AI was released on HTC U Play and Ultra smartphones in January. This is also likely to be extended to new HTC smartphones to be announced at the show.

• Google Assistant is rumored to feature in LG’s latest flagship the G6, also to be announced at the show.

In 2016, 219 million enterprise smartphones were sold, accounting for just over 12% of all smartphones sold. While the market has peaked in size, many Android manufacturers will be looking to take market share as more cost-effective solutions than those offered by market leaders Apple and Samsung.

While Google is less likely to announce an update for Android at Work, it will nonetheless spend a lot of the show touting the value and security of Android to operators and large enterprises. With the latest flagship smartphones due to be unveiled either at MWC or very close to the show, there will likely be a host

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of enterprise-focused features debuted with those new devices. However, Samsung will not be launching its new flagship device, so it is unlikely that it will announce the next iteration of its KNOX software at the show. This creates an opportunity for Apple, BlackBerry, and others to push their enterprise features.

Whom to look out for at MWC: • HMD: Nokia will not be making its new handsets. Instead it partnered with HMD, which entered a brand

licensing agreement with Nokia back in December 2016.

• LG: The Korean smartphone-maker always makes a splash at MWC by launching the most extravagant features in its flagship model, from 3D displays to curved screens and modular devices. The G6 will almost certainly be one of the stars of MWC 2017.

• Oppo: At booth 3D31, Oppo is the new top-selling smartphone brand in China. Oppo is part of a larger Chinese company called BBK, which also owns the Vivo, another top-selling smartphone brand in China. BBK is on course to overtake Huawei as the third-largest smartphone-maker by volume after Samsung and Apple. A recent survey conducted by Ovum in Thailand, Malaysia, and Indonesia clearly shows Oppo’s rapid progress outside of China.

• Wiko: At booth 6A32, Wiko is a French smartphone start-up that has been doing particularly well across a number of European territories. Wiko is interesting primarily because of its ability to capture younger customers by using innovative marketing strategies, which will be easy to spot at its booth.

Trend 5: The rise of chat appsAnalyst: Pamela Clark-Dickson, Lead Analyst, Communications and Social Networking

Increased focus on chat apps as platformsChat apps such as WhatsApp, Facebook Messenger, and WeChat will again be a focus at MWC, with at least two conference sessions covering the way in which chat apps continue to evolve to provide services other than communications. These conference sessions will also cover chatbots and virtual assistants, and the chat app’s role in content generation and sharing, digital media, commerce, and customer engagement. Ovum forecasts that by end-2017, the total combined user base of WhatsApp, Facebook Messenger, and WeChat will reach 4.7 billion (see Figure 3).

Figure 3: Selected chat apps, monthly active users, 2013–19

Source: Ovum OTT Communications Tracker, 4Q16

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Chat apps will provide updates on engagement with enterprise marketWe expect to see updates and product announcements from key chat app providers with respect to their initiatives and success in enabling third-party content provision, enterprise messaging, and payments on their platforms. For example, Facebook recently announced the beta of native payments in Facebook Messenger, and has applied for an e-money license from the Central Bank of Ireland. Facebook subsidiary WhatsApp is also working on its strategy for enabling enterprises to communicate with its users.

Chat apps engage with AI: chatbots and virtual assistantsAt MWC 2017, we also expect that key players will detail the progress of their AI strategies, which are currently focused mostly around chatbots. Most large chat apps now enable some form of chatbot support on their platforms, with varying levels of success for the providers of the chatbots (typically enterprises). Chatbots themselves are still relatively nascent in the chat app world, and much still needs to be worked out in terms of best practice. Meanwhile, both Facebook and Google have enabled virtual assistant capabilities within their respective applications (Facebook Messenger and Allo), but again, these are at a very early stage in their development and market penetration.

Whom to look out for at MWC:Chat apps: Not many chat app providers would exhibit at MWC 2017, given both the expense and the fact that they either choose not to market themselves, or would spend their marketing budgets in other ways. However, some are participating in the conference program, so it would be worthwhile checking out the session that is focused specifically on messaging apps on Tuesday, February 28 (The Future of Messaging), and the session on AI and chatbots on Monday, February 27. Companies most likely to be in attendance and/or to make announcements or provide some kind of update on their chat apps: Google, Facebook Messenger/WhatsApp/Instagram, Microsoft/Skype, Line, Tencent (WeChat), Gupshup (India), KakaoTalk, Viber, and Snap.

Connectivity service providers: Twilio, Vonage/Nexmo, Bandwidth, and Plivo are all companies that provide communications platforms-as-a-service and cloud-based communications, and are working with chat apps (among others) as service enablers. Twilio CEO and founder Jeff Lawson will give a keynote on conversational commerce on Wednesday, March 1, in which he is likely to provide an update on the Twilio business, including talking about customer success stories, new product offerings, and KPIs. Incumbents such as SAP Mobile Services, Syniverse, BICS, Tyntec, and OpenMarket are working to catch up with the newer entrants, while also continuing to focus on their legacy messaging businesses. Ovum expects that these companies may make announcements about new products/services targeting chat app providers that will allow them to expand their participation in the value chain.

Payments providers: As more chat apps move into commerce, they will need to partner with payments companies in order to facilitate transactions via their platforms. For example, Facebook Messenger is working with PayPal and its subsidiary Braintree, as well as Stripe, Visa, MasterCard, and American Express, and in October 2016 obtained an e-banking license from the Central Bank of Ireland. Meanwhile Viber Media is working with Comtrade Digital Services to create an automated banking platform. PayPal is participating in The Future of Messaging conference session on Tuesday February 28, and will likely provide some insights into its partnerships with chat apps during this session.

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Trend 6: The push into richer communications Analyst: Pamela Clark-Dickson, Lead Analyst, Communications and Social Networking

Rich communications servicesWith the November 2016 release of the RCS Universal Profile for Advanced Messaging, we expect there will be further announcements on the progress of the GSMA’s Network 2020 project, and its partnership with Google and mobile operators to bring RCS-based services to market, as well as updates on live services. As of end-4Q16, 48 mobile operators offered commercial RCS globally, with Europe having the greatest concentration of launches, primarily because Vodafone has launched its Message+ and Call+ services in 14 markets (see Figure 4).

Figure 4: Geographic distribution of commercial RCS at end-4Q16

Source: Ovum’s Enhanced Telco Communications Tracker: 4Q16

Enterprise messaging and communicationsFor the past couple of years, the industry has focused on addressing the problem of SMS revenue leakage and anti-fraud, and the security of SMS as a communications channel. We expect that the optimal use of SMS by enterprises will continue to be discussed at MWC 2017, but that there will also be a focus on the integration of chat apps into an enterprise’s communications channel, and the omnichannel approach toward customer communications.

Communications platform-as-a-service (CPaaS) and Web Real-Time CommunicationsCPaaS and WebRTC are technology platforms that enterprises – including telcos – can use to build IP-based communications services for both internal use and for customer-facing communications. We expect that a number of vendors will be making announcements about their CPaaS or WebRTC products, including customer announcements. We also expect that telcos will be showcasing their services in this area, for example, Deutsche Telekom’s immmr.

Whom to look out for at MWC:Telcos: The GSM Association, Vodafone, Deutsche Telekom, Orange, Telefonica, China Mobile, Sprint,

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T-Mobile USA, AT&T, and SK Telecom. The GSMA traditionally announces updates on its Network 2020 program (which now includes rich communications services) at MWC, and Ovum expects that this tradition will continue at MWC 2017. A seminar session on Network 2020 is scheduled for Tuesday, February 28, in which a number of the previously mentioned telcos will likely participate, and during which they will likely provide updates on their progress with RCS-based services.

Connectivity service providers: SAP Mobile Services, Syniverse, BICS, CLX/Mblox, OpenMarket/Amdocs, Google/Jibe Mobile, Twilio, and Vonage/Nexmo. Connectivity service providers continue to evolve their products and services in line with prevailing market developments, while ensuring they maintain and iterate platforms that enable legacy communications services. Ovum expects that the above companies will announce customers and new products, encompassing chat apps, RCS, A2P SMS, anti-fraud and revenue assurance/grey routes, SS7 security for SMS, NFV and cloud, and WebRTC.

Vendors: Xura, Comviva, and Genband. Xura continues to undergo transition, with its privately owned parent Sirius Capital recently acquiring Mitel Mobility (formerly Mavenir) and Ranzure Networks. Should these acquisitions be closed before MWC 2017, Ovum expects that Xura will announce how it plans to integrate the two companies. It is also likely that the previously mentioned companies will use MWC as an opportunity to announce new customers and products, covering legacy as well as next-generation communications platforms and business models; there will be some cross-over with connectivity service providers in terms of technologies. Genband will highlight telco and enterprise deployments on its Kandy CPaaS, while Comviva is likely to showcase value-added-services in emerging markets that are deployed over its platforms.

Trend 7: Virtual reality embraces practicalityAnalyst: Paul Jackson, Principal Analyst, Digital Media

Smartphone vendors take another pass at VR headsets. In 2016, many smartphone OEMs chose to unveil VR enclosures for their devices at MWC. Since then, around half of these firms have managed to ship – typically mediocre – headsets and the market has moved beyond VR headsets without movement tracking or some form of controller (see Intel’s Alloy concept and Google’s Daydream VR initiative). Those OEMs that have not moved onto the next hype train (see below) may well bring updated VR headsets to MWC 2017. These need to offer more than a cardboard-like experience (i.e. 360-degree video) and support some form of content marketplace – even then it will be an uphill battle to compete with the high-profile headsets (Samsung Gear VR, Google Daydream View).

VR disillusionment battles mobile AR hype. As we forecast, VR has not become a silver bullet solution for mobile operators and smartphone OEMs looking to generate more revenue – if anything, the smartphone-based headsets have just ended up as an additional BOM cost when bundled for free to encourage phone upgrades. Also, VR hype has died down (as the media moves on to AI assistants as its new “gee, isn’t the future exciting” topic), and simple mobile AR has come to the fore with Pokémon Go. While AR games are not new – Pokémon Go is a reskinned / updated version of Niantic’s Ingress from 2012 – they have been thrust into the limelight by the success of the Pokémon title; expect to see software developers, operators, and OEMs try desperately to copy the AR game formula.

Mobile gaming agenda livened up by Nintendo Switch. For years there has been an ongoing struggle in game developer circles to work out whether dedicated hardware like the PSP Vita or Nintendo DS is the

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future of portable gaming or whether smartphones and tablets will completely replace them. Nintendo has held off on smartphone games until very recently, but interestingly is launching its new hardware platform (Nintendo Switch) shortly after MWC. This device is a tablet with peripheral controllers and a dock to turn it into a proper home console – it will be interesting to gauge whether MWC attendees see this as a promising middle ground for consumers between those dedicated home consoles, such as the PS4, and simple, casual games on smartphones, or whether it is seen as a white elephant that fails to deliver on either front.

Trend 8: Focus on payments and retail bankingAnalyst: Kieran Hines, Head of IT Industry Verticals

Developments around the retail and digital commerce space will, once again, be an important theme at MWC. Providers from across the ecosystem will deepen their focus on how digital wallet solutions in particular can enhance the consumer purchasing journey, particularly in how to leverage customer preference and behavioral data to create a more personalized end-user experience. Gathering, managing, and using customer data is a core IT investment area for the retail industry; the need to better connect the store and digital channels is a leading priority for the majority of large retailers. Indeed, 57% of retailers are growing their IT budgets in this area in 2017, according to Ovum’s ICT Enterprise Insights study. Consequently, vendors from across the telecoms, enterprise software, and payments industries are all targeting this opportunity.

At the same time, payment acceptance and broader commerce-enabling solutions aimed at small and mid-tier merchants will continue to be an area in which we see further developments. With the ability to accept digital payments becoming relatively commoditized, focus on adding value around transactions has become a differentiator and will drive much of the focus in this space.

The role that payments technology plays in these new customer experiences will also be important. While tokenization solutions are now mature and proven at scale, open banking initiatives (most notably PSD2) will create opportunities for new added-value services (as well as business models) and should also feature prominently.

Securing digital transactions continues to be an important focus area. Biometric authentication solutions, particularly for use in digital payment and banking transactions, are a growth area for the financial services industry and will be an important space to watch.

With operator-led solutions for payments and some banking services well entrenched across large parts of the globe, attention has turned to the opportunities to provide services across the major corridors for cross-border remittances. Several providers have invested heavily in forming partnerships as well as achieving the scale, infrastructure, and regulatory approvals necessary to serve customers in this space. Further developments are expected this year.

Looking further ahead, this may be the year that we see some further developments around the role that payment services play in driving the monetization of the consumer IoT market. Despite the hype and the potential use cases, viable/scalable commerce models remain limited at present. However, the renewed openness of cross-ecosystem partners to collaborate may mean that we see some significant developments this year.

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Whom to look out forThe leading payment schemes. MasterCard and Visa have focused heavily on MWC in recent years, and both will be expected to announce developments in areas such as their offerings to support the IoT ecosystem, biometric authentication, remittance, and API/developer portal offerings. PayPal is also likely to announce further developments in its platform and partner strategy.

Developments in the digital wallet space. Amdocs, Mahindra Comviva, Worldline, and Ericsson will be among several providers looking to highlight the latest developments with their digital wallet solutions.

IBM, particularly around its commerce offering. Interest in the ability of AI to enhance the customer experience in retail is growing and there will be a lot of interest in IBM’s cognitive solutions in this space.

Trend 9: Mobility is a key element of the digital transformation puzzle Analyst: Adam Holtby, Analyst, Enterprise Mobility and Productivity

The enterprise managed mobility (EMM) vendors will showcase capabilities that demonstrate why their solutions are an important part of the IoT puzzle. As smartphones and tablets did previously, a new wave of connected “things” is increasingly being utilized within the enterprise. How to manage, secure, and derive business intelligence and value from these assets is becoming an activity of increasing importance to organizations. MWC will demonstrate how EMM vendors are responding to this trend. New EMM analytics and business intelligence capabilities will enable organizations to gather mass amounts of insight and intelligence that can be used by service providers, IT operations, and other business functions to improve business processes. Being able to gather granular-level insight on things such as app usage and engagement and device power consumption and reliability, and understanding the types of documents commonly worked with across mobile devices are some examples of the outputs that these capabilities will deliver. Machine-learning technology, predictive analytics, and artificial intelligence technologies will also be showcased by vendors, specifically as to how these technologies will support service providers in deriving intelligent insights from the wealth of data collected via EMM solutions.

There will be a strong focus on how mobility can optimize and redefine business processes. Moving focus away from purely technological capabilities and more to how a mobilized and truly integrated estate of connected devices, applications, and services can help optimize business processes will be a more common, but important vendor narrative.

A stronger application ecosystem will position head-mounted displays as a more viable enterprise computing platform. As the application ecosystem evolves, enterprise adoption of AR technologies in particular will improve. Even though this technology remains quite nascent in the enterprise, understanding how augmented and virtual reality devices and the application ecosystems that are developed in support of them will be managed in the enterprise is an important strategic consideration – one that we expect vendors at MWC to address.

Whom to look out for at MWC:• SOTI, for extending EMM capabilities to enable organizations to manage a more diverse estate of

connected “things.”

• VMware AirWatch, for its unified endpoint management and real-time reporting and analytics

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offerings, which will exploit machine learning.

• Sophos, for information on how it plans to strengthen its mobile security capabilities after its acquisition of Invincea – a firm specializing in machine-learning–based threat detection.

• MobileIron will present findings from the recently published third edition of its Mobile Security and Risk Review research and deliver insights regarding how EMM is being utilized across industries.

• Vendors, including Brightstar and Tangoe, showcasing how compelling an option mobility-as-a-service can be for enterprises.

• Asavie will discuss the business innovation opportunities brought about by taking an integrated approach to IoT and EMM.

Trend 10: Ever more intelligent service provider digital support systemsAnalyst: Kris Szaniawski, Practice Leader, Service Provider Operations & IT

We expect a strong focus on offerings and capabilities that support the shift to digital services in service provider infrastructure, including analytics, AI, automation, customer experience, and security

Figure 5: Digital services, customer experience, and analytics are top business challenges for CSPs in 2017

Source: Ovum

• Service provider analytics and AI: Solutions that apply big data analytics to business processes and make intelligent use of data at the network, service, and customer level will figure prominently at MWC. We can expect to see lots of announcements of solutions that adopt artificial intelligence, a good example being Nokia’s release of its MIKA digital assistant. We will see increased attention on customer and revenue management systems that help to personalize services, content, and marketing offers. This will include pre-packaged analytics offerings targeted at business users within different parts of the service provider organization.

• Service provider automation: There will also be a proliferation of solutions making use of analytics and AI

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to deliver more agile and automated approaches to network monitoring, optimization, and network and service performance management. Vendors will be highlighting those digital support solutions that help centralize and integrate systems required to support future network complexity (SDN/NFV, 5G, IoT), for example unified network inventory. We will also see more announcements around network and service orchestration.

• Supporting the digital customer experience: The need to differentiate services through customer experience has become a top priority for service providers, so we can expect to see plenty of solutions supporting multi- and omnichannel experience, rapid onboarding, and personalized customer care management and BSS stacks focused on supporting digital services, for example, Amdocs’ latest CES update. We will also see products that focus on enhancing operations for the B2B customer segments, for example, configure, price, quote (CPQ) solutions.

• Service provider security: Announcements about security-related products will play an important role at MWC due to the need to deliver security in a 5G and IoT environment, such as the launch of a new release of Nokia’s Impact IoT security platform. We will see security products that can tackle threats at the device, application, and network levels.

Whom to look out for at MWC:• Amdocs for AI, cloud, and intelligent operations initiatives and platform updates, as well as the latest

on ECOMP.

• Ericsson, specifically for security announcements and to hear about new services methodologies and approaches.

• Guavus for its latest service assurance and operations analytics offerings.

• Huawei, for cloud-enablement services as well as new agile digital operations and upgrades to its customer experience offering.

• IBM, as always, for all its latest Watson and cognitive computing initiatives, including security.

• Mahindra Comviva digital business and lifestyle solutions and platforms.

• MYCOM-OSI for new solutions for assuring the telco cloud.

• NEC/Netcracker for the latest SDN/NFV update and to hear more about the Trend Micro announcement.

• Nokia will have a lot to talk about, including its Impact IoT security platform, MIKA digital assistant, automation, and analytics and of course the recent Comptel acquisition announcement.

• TCTS for new initiatives supporting digital transformation.

Also, it may be worth taking a look at the Mobile Operator Digital Transformation conference session on Monday.

Trend 11: More detail on 5G rollouts and devicesAnalyst: Daryl Schoolar, Practice Leader, Service Provider Technology

We expect to hear more detail on 5G front-runners’ pre-standard 5G trial and launch plans, including key technology developments. The number of 5G tests/trials by region currently stands at 38, according to Ovum research, with Asia-Pacific as the leader. We expect this number to be clearly higher by the end of the event as operators and vendors look to claim 5G leadership by making their plans public. Some service providers that have been most vocal about their 5G plans, for instance Verizon in the US, SKT and DoCoMo in Asia, and

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Telia in Europe, will give more detail about their pre-standard 5G launch plans. This will give everyone a better idea of how they plan to set the pace for the industry’s development of 5G technology ahead of the first fully standardized launches in 2020.

Given that 5G technology standards will not be ready until the end of the year at the earliest, leading mobile broadband operators will be increasingly keen to upgrade existing infrastructure to LTE-A and LTE-Advanced Pro to set the foundation for their 5G launches. These next-generation 4G technologies bring real advantages to end users, and the operators that invest in them can expect to see clear market gains. We will be watching with interest to gauge who these operators are, as the gap between mobile broadband leaders and followers grows ever wider.

• Ovum expects to see more development in terms of modems, with Qualcomm building on the X50 modem and competitors likely to announce their own versions. It will also be interesting to watch out for other enabling technologies for 5G handsets such as improvements to battery technology, and the key use cases, such as VR. Both of these are essential for the rapid adoption of 5G devices.

• Ovum is expecting 5G handsets to go on sale in 2020, alongside the first 5G networks, and will ramp quickly.

Whom to look out for at MWC:Ericsson, Cisco, Huawei, Intel, Nokia, Qualcomm, Samsung, and ZTE: These companies are all involved in much of the ongoing developments around 5G, from the device level, to the radio network, and all the way to the network core, and will share further detail of how the technology will unfold over the next few years.

Trend 12: eSIM gets realAnalyst: Dario Talmesio, Practice Leader, Europe

The newly enabled options and impact of eSim will be a hot topic at MWC 2017. The operator-friendly standard of reprogrammable SIM cards hit an important milestone at the end of 2016 when the GSMA released the second version of its global specification, which enables remote SIM provisioning in any consumer device. (In the first version, this capability was only available for companion devices, such as smartwatches.)

As standards catch up with a market packed with proprietary solutions, operators and partners alike are adopting subscription management solutions that are globally embraced.

Ovum expects operators to be more vocal about their eSIM plans at MWC 2017 and we expect a string of announcements from subscription management vendors and mobile operators. Some of the automotive companies at the event may announce MVNO plans, but we think it is probably too early and that this is likely to be a story (and potentially a keynote by one of the major automotive manufacturers) in 2018. We would put money on Elon Musk as a keynote speaker for 2018.

Digital service providers need eSIM: The technology will take some time to fully penetrate the market – eSIM penetration will only account for 4% of smartphones by 2019.

The battle for relevancy is not over – controls over the subscription-management UI will be critically important. Ultimately, the company in charge of the subscription-management UI will strengthen their customer relationship, at the expense of others. We expect the eSIM debate to intensify around the UI during MWC 2017.

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Figure 6: In the future, whom would you trust to be your mobile service provider?

Source: Ovum

Whom to look out for at MWC: Device manufacturers will not make a big splash this time around. We expect to see more wearable devices, tablets, and smartphones that support eSIM to be showcased this year. Huawei and Microsoft are two players to watch at this year’s MWC.

AppendixMethodologyResearch gathered via primary consumer and enterprise research, vendor briefings, and analyst market analysis and opinion.

Further reading“Trump, Netflix, net neutrality, and mobile video,” ME0002-000738 (January 2017)

“Telefonica seeks to broker new relationships with consumers and Internet players,” TE0009-001570 (November 2016)

Digital Economy 2025: Telecoms Core Scenario, TE0009-001505 (March 2016)

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AuthorsPamela Clark-Dickson, Lead Analyst, Communications and Social Networkingpamela.clark-dickson@ovum.com

Rob Gallagher, Research Directorrob.gallagher@ovum.com

Kieran Hines, Head of IT Verticals kieran.hines@ovum.com

Adam Holtby, Analyst, Enterprise Mobility and Productivityadam.holtby@ovum.com

Paul Jackson, Principal Analyst, Digital Mediapaul.jackson@ovum.com

Richard Mahony, Research Director richard.mahony@ovum.com

Michael Philpott, Practice Leader, Consumer Servicesmichael.philpott@ovum.com

Alexandra Rehak, Practice Leader, IoTalexandra.rehak@ovum.com

Ronan de Renesse, Practice Leader, Consumer Technologyronan.derenesse@ovum.com

Daryl Schoolar, Practice Leader, Service Provider Technologydaryl.schoolar@ovum.com

Kris Szaniawski, Practice Leader, Service Provider Operations & ITkris.szaniawski@ovum.com

Dario Talmesio, Practice Leader, Europedario.talmesio@ovum.com

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Ovum ConsultingWe hope that this analysis will help you make informed and imaginative business decisions. If you have further requirements, Ovum’s consulting team may be able to help you. For more information about Ovum’s consulting capabilities, please contact us directly at consulting@ovum.com.

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