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Mobile World Congress 2012 Report from Barcelona
by Dr. Mehmet Unsoy Mobile World Congress (MWC) 2012 was held for the seventh time in Barcelona, Spain, during February 27 - March 1, 2012. According to the organizers, attendance was over 60,000, a record. Nice sunny weather added to the up-beat mood at the conference. However, some local labor disputes and student protests in Barcelona limited participation in some of the afterhour activities. We as mSolve, participated in meetings with well over 100 companies, several hundred executives, from 40+ countries. It sure was a very busy week! How is the industry doing? Obviously there are major economic problems around the world, especially in the Euro-zone. Despite this, the $1.9 trillion mobile industry is doing very well. It is true that consumer spending as well as operator Capex will be at best flat in Europe in 2012. However, there is growth in North America and the rest of the world that will propel the industry forward. The mobile subscriber base has crossed 5.3 Billion globally, covering almost 77% of the world population. The growth is being driven by demand in the developing world, India (850 million subs) and China (973 million subs) in particular. China is expected to surpass the 1 Billion subscriber mark within this year, which is a significant achievement on its own! Mobile industry is in the forefront of the evolution of other industries as an "innovation enabler", sometimes bringing major disruptions to those industries. We have seen major impacts of mobile technology in the digital media, such as music, movies, and the news industries. Content delivery as well as the business models in digital media have gone through a major transition, thanks to mobile technology. In addition, mobile technologies' impact on the finance sector, including banking, payments, money remittances and e-commerce were very obvious during MWC 2012. There were major announcements, partnerships (e.g., with Visa and MasterCard) as well as several innovative companies in the mobile money space, exhibiting at MWC. Also affected are the transportation industry, energy sector, and most interestingly the healthcare sector, with large number of innovations and start-ups leveraging mobile technology to re-invent the corresponding vertical industries. For example, at a keynote speech, Ford's CEO was inviting mobile technology companies to develop auto related services, saying that cars are the "great untapped opportunity" for mobile, stressing intelligent cars and transport systems. There is a wide recognition that mobile technology has become a "major change agent" for the global economy. Mobile Broadband is especially important for developing countries. That is why LTE makes more sense in some of these emerging markets than in developed markets. The World Bank estimates that a 10% increase in broadband penetration in a country (e.g. through LTE), may enable additional 1.3% GDP growth in that country. The ubiquitous mobile broadband is becoming as critical as water or electricity to economic development of these countries. Over-the-Top (OTT) players' role in the mobile industry was a major topic for debate. Mobile operators are making huge investments especially with mobile broadband and LTE. If they turn into bit pipes and provide these super-highways to Over the Top (OTT) players to monetize, then it would be difficult to justify building out these LTE networks in the first place. On the other hand, if the mobile operators put in some speed-bumps for OTT, then we have the 'net neutrality'

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Interestingly. at about 150 euros in Europe. and it is rumored to be one of the cheapest in its class. NSN claims the most number of commercial LTE deployments so far (52 networks). was the t"alk of the town" as well. but sold a staggering 49 Million iPhones just in Q4 of 2011. asking them to bring real value to the eco-system. Conversational video is a potential killer app for LTE. which also captured about 29% of the tablet market. Huawei (Atom Cell) and NSN (Flexi Zone) had new demonstrations of small-cell base-stations. WP is now the 3rd major operating system for SmartPhones. which is critical for the voice fall-back from LTE to 3G networks. to be released later this year. VoLTE (Voice over LTE) interoperability with 3G / WCDMA was demonstrated by Ericsson. It is now expected that South Korea will have at least half of their subscribers using LTE by 2014. For voice services. however the end-to-end quality assurance will be very critical for this service to take off. There were several leading companies in this regard at MWC. Huawei (Ascend). Most operators are struggling to find adequate solutions to meeting the ever increasing demand. Several manufacturers. Most interestingly. According to research. as the mobile industry transitions from the feature phones to SmartPhones. building out more infrastructure is one potential solution. 2. especially with Nokia handsets. across 30 countries. RCS (Rich Communications Services) as soon and as aggressively as possible.News from mSolve Partners :: mSolve Partners | MyNewsletterBuilder Page 2 of 4 problem. there is an increasing gap between supply and demand on bandwidth. with about 500 million LTE users.5G or 3G handsets in the past. Not only has there been a very large number of operators deploying LTE commercial service. Apple's iOS is number two in operating systems. mobile video. Lumia 610 is expected to be the cheapest Windows Phone. Another major initiative is Wi-Fi Offload. Policy management technologies could provide mobile operators with such flexibility. there will be 200 live LTE networks across more than 70 countries. It is forecast that by 2016. We met with at least four companies with value propositions in this "new" eco-system. LTE deployments and commercial services are now a reality. For LTE infrastructure.7 trillion to public funding worldwide. with very attractive features. 90% of all base stations in 2016. These lower cost http://www. Apple is the profit leader with $33 billion in 2011. growing to 33% in 2014. and 50% by 2015. Another is optimization of the existing infrastructure. More on this later. ZTE (Era) were example of quad-core SmartPhones announced and displayed at the show. will be for small cells. The industry is moving toward Self-Organizing Networks (SON) for optimization of mobile networks. VimpelCom and Telefonica Latin America called for sub-$50 SmartPhones.com/email/newsletter/1411268863 3/12/2012 . Windows 8. becoming the first country to reach such penetration levels. like VoLTE (Voice over LTE). This is overwhelming growth for Google's Android operating system. LTE devices are expected to be 20% of the handsets rolled-out next year. He indicated that the industry (mostly mobile operators) will invest $800 billion in Capex in the next 4 years. and the whole Wi-Fi offload space attracted even more attention during MWC. During MWC 2012. Huawei's Ascend claims to be the fastest Smartphone in the world. but also the handset manufacturers have been much faster in coming up with LTE enabled handsets. was the center of some expectations. This sure was not the case with 2G. similar to the recent GSMA initiative of sub-$30 feature phones a few years ago. SmartPhone sales in 2011 reached around 480 Million. the focus is on small-cell technology. According to Wireless Intelligence. GSMA Chairman (also Chairman of Telecom Italia) raised serious concerns about the OTT players. Quad-core SmartPhones and Tablets were the "new thing" in MWC 2012. Recently. leveraging Wi-Fi networks to offload some of the data traffic and thus better utilize the cellular network. after iOS and Android. there are about 50 live LTE networks. as well as contribute $2. Obviously. Starhub's CEO was suggesting that the mobile operators could become OTTs themselves and/or establish partnerships with them. LG (Optimus 4X). such as Lumia models. as well! Microsoft Windows Phone. Network Optimization is hot again! With mobile Internet demand on the rise. Ericsson acquired BelAir. One of the new Nokia handsets. In fact. with about 49% of it captured by Android devices. primarily driven by the demand for mobile Internet access. with about 10 million LTE users. but others are not far behind.mynewsletterbuilder. HTC (One X). One way forward is for the mobile operators to offer their own services over LTE. capturing 24% of the market-share in that quarter. Today. Ericsson (multi-standard pico with Wi-Fi). there were a lot of LTE related announcements. LTE is the fastest developing mobile technology. OTT companies should be making similar investments and contributions to participate in the growth of this industry. During MWC 2012. To make SmartPhones more widely available around the world. including Alcatel-Lucent ( LightRadio Cube). several major operators such as Airtel. It is expected that VoLTE compatible networks and devices will be launched later this year.

expected later this year.5 trillion by 2020. but rather to iTunes! Apple iTunes users already have a credit-card relationship. In a keynote speech. but may not be necessary or practical for other mobile money transactions. In addition to Google Wallet. The Spanish arms of Orange. software based solutions. Mobile Messaging and RCS were newsworthy again. NFC might be ideally suited for commuters getting onto trains or buses. we have got White Space TV spectrum. and even opening the doors of your car. Isis is a joint venture of AT&T. T-Mobile and Verizon. and other aspects of mobile money were very hot items at this MWC 2012. Handset manufacturers are submitting their new NFC-capable handsets to Visa to get them certified. worth about $600 billion (that's why Ford CEO was at MWC). Mobile Wallets were also hot at MWC 2012. It was announced that there are commercial NFC deployments underway in France. mobile healthcare and transportation might be the biggest markets for Internet of Things in the coming years! As a spectrum to use for Internet of Things. for Etisalat Mobile Baby • Best SmartPhone: Samsung Galaxy S II • Device Manufacturer of the Year: Samsung • Best Mobile Tablet: Apple iPad 2 • • • • • • • http://www. Qualcomm. Telefonica and Vodafone have started rolling out RCS and are due to launch services this summer. for Angry Birds Rio Best Mobile App for Enterprise: Citrix Systems for Citrix Receiver Judges' Choice . and the challenges and opportunities associated with it. the most debated question seems to be whether HTML5 is the answer to everything. There are several "interim" NFC approaches around the industry. and several companies are leading in developing solutions around White Space. Operators in France.S. There is a good chance that iPhone's approach will not be tied to the SIM cards or mobile operators.News from mSolve Partners :: mSolve Partners | MyNewsletterBuilder Page 3 of 4 SmartPhones would definitely increase the mobile Internet traffic in emerging markets.mynewsletterbuilder. Obviously it is not. and the next two apps were healthcare related and collectively worth about $620 billion! So. This brand will be used by mobile operators to have a common service. with trials in many other countries around the world. Turkey and the UK. especially with LTE networks being deployed in those countries. Isis was present at MWC 2012. at least not in the near future. Mobile Money is a new buzz word! M-payments. thus offering another OTT solution. Japan. However. but will also be used for mobile marketing.Best Overall Mobile App: WhatsApp Most Innovative Mobile App (technical advances in apps): SwiftKey Best Enterprise Mobile Service: Fiberlink for MaaS360 Best Network Product or Solution: Turkcell for TiklaKonus Best Mobile Health Innovation: Etisalat. GSMA with Machina Research. Several companies announced RCS clients for SmartPhones and Tablets. such as stickers. GSMA launched a consumer facing RCS (Rich Communication Services) brand called 'joyn". Companies like Paypal (who says they will do $7 Billion mobile payments this year!) are challenging the need for NFC. D-Tree International and Great Connection Inc. Incidentally. and Apple may leverage this for a wide range of mobile money transactions. micro SD cards. and there are still lots of benefits of native apps. there were several major related announcements such as Visa certifying a set of SmartPhones to be NFC compliant and ready to use the Visa card. and they are not going to be replaced by HTML5. Near Field Communication (NFC) is at center stage of the discussions and debates. and has announced several major partnerships with plans to start NFC-based trials in two locations in the U. but the solution promoted by GSMA is the SIM card based approach. as the argument goes. some of the major GSMA awards given during MWC 2012 were Best Mobile App for Consumers: Rovio Entertainment Ltd. released a study that shows connected devices market to be worth $4. this summer. Germany. Italy and South Korea also committed to start RCS service this year. m-commerce. Korea.com/email/newsletter/1411268863 3/12/2012 . Another question discussed at MWC was what will Apple do for NFC. On the App Development environment eco-system. One of the major themes at MWC 2012 was "Connected Future" or "Networked Society". The top application in this sector would be "connected car". Finally. while several major players like Apple may be coming up with their own solutions for m-payments. Ericsson CEO stressed again the 50 Billion connected devices by 2020. especially to compete more effectively with OTT players. parking lots. especially with iPhone 5. NFC is more like an enabling technology and may not be limited to just mobile money. access control to offices.

Sui e 100 • D alas. Steve is Managing Partner at mSolve Partners and can be reached at Steve@msolvepartners. Mehmet Dr. Device or Tablet at Mobile World Congress 2012: Nokia 808 Pure View • Best Embedded Mobile Device (Non-Handsets): AT&T for Garmin GTU 10 • Best Cloud Based Technology: Appcelerator for Titanium Integrated Development Platform Next year. Best regards.com mSolve Partners LLC is an advisory firm that offers corporate and business development advice to companies in the mobile sector. TX 75287 t l Subscri | U nsubscri | Send t a Fri be be o end | Pref erences | Report Spam Pow ered by MyNewsletterBuilder http://www. which is promised to be a much bigger. in Barcelona again.mynewsletterbuilder.News from mSolve Partners :: mSolve Partners | MyNewsletterBuilder Page 4 of 4 • Best New Mobile Handset. We work with entrepreneurs. and leaders of major corporations in the mobile sector to assist them in achieving their most important strategic and financial goals. See you there. m Sol Part ve ners • 4838 St ony Ford D ri ve. MWC 2013 will be held Feb 25-28. but in a different venue.com/email/newsletter/1411268863 3/12/2012 . Fira de Barcelona Grand Via. and better place for the Mobile World Congress. investors. Mehmet Unsoy is Managing Partner at mSolve Partners and can be reached at Mehmet@msolvepartners. mSolve has a team of seventeen professionals and twenty advisors distributed in major markets around the globe.com Steve Gaynor also contributed to this newsletter.