The GSMA Mobile World Congress (MWC) is the world’s largest exhibition for the mobile industry and combines influential companies from Asia, Europe and North America in the central location of Barcelona. The grandiose 20,000 square foot booths come with the largest names in mobile, like Samsung, Ericsson, Huawei, Google, Docomo, Telefonica, Orange, Verizon, AT&T, Qualcomm, Xiaomi, and other big names with big marketing budgets.
5G Loud and Clear
5G, 5G, and more 5G is basically the best way to sum up the news from the event. Every operator, network and manufacturer had some angle on the 5G rollout. However, hold your investment pennies for now on 5G stocks. The capex bill that comes with it may be one of the biggest the tech industry has ever faced. The GSMA trade group, a trade body that counts over 800 telecom and mobile corporate companies as members, stated that carriers will be spending $160 billion on an annual basis to roll out 5G networks. In addition to network costs, trillions will be required to install the infrastructure needed for the content, applications and emerging tech that will rely on the 5G networks (i.e. smart cities, autonomous vehicles, virtual reality, etc). Think 5G makes for a good long trade? Again, don’t count on it for now as the GSMA also stated only 15 percent of all mobile connections will be on 5G by 2025. (As I mentioned, the GSMA is a fairly reliable source as it counts 800 of the world’s top mobile companies as members).
According to VentureBeat, the financing firm Greensill puts the total cost for 5G at $2.7 trillion through the end of 2020. The issue is that it’ll take a few years to see any returns, which will put networks in the red until applications catch up. This, of course, is the fine print to 5G that the lights, camera and action of the booths at MWC didn’t portray (view my Instagram posts here). In fact, there was a panel where Mike Fries, the CEO of Liberty Global, pointed out that carriers in Europe have not recouped costs on 4G yet. “You’ve had 10 straight years of declining mobile revenues in Europe with the biggest issue being price,’ he said.
Will Foldable Phones Drive Sales?
Foldable phones were the most talked about product at the event. Huawei’s Mate X and Samsung’s Galaxy Fold were both on display behind glass cases. The use-cases for the foldable phone include more productivity while on-the-go and new applications for cameras, such as seeing the photo before you take it due to the second screen. The price tag is high – over $2,000 is the anticipated number when the phone is released later this year. Following MWC, on February 28th, Apple Insider reported that Apple has filed a patent application for “Electronic Devices with Flexible Displays” with sensor and micro-heater technology to keep a foldable screens from becoming too brittle in cold temperatures. No doubt, mobile handsets have stagnated recently with iPhone revenue dropping in Apple’s earnings reports. Will foldable phones deliver enough ingenuity to revive sales? Time will tell, but it does seem like early adopters are taking a risk on the durability of the manufacturing as Samsung’s foldable phone is already reporting issues after being folded 10,000 times. According to Wired and ArsTechnica, the foldable phones from Samsung and Huawei are made of plastic polymers, which can scratch easily and cause the previously mentioned wear from folding the device. In the meantime, glass-maker Corning is “working on an ultrathin, bendable glass that’s 0.1 millimeters thick and can bend to a 5-millimeter radius” that may hit the market in about two years. (Wired’s article is less than obscure and is entitled “Want a Foldable Phone? Hold Out for Real Glass).
SoftBank Becomes Bitcoin Competitor
Blockchain was a more muted theme at MWC, one that was mainly talked about in sessions for Silver, Gold and Platinum pass holders. In one session, SoftBank had an interesting angle on how to transfer payments electronically in order to avoid the drawbacks of bitcoin. Their proposal is cross-carrier identification systems (CCIS) and payment systems (CCPS) technology that runs through telecom carriers. CCIS focuses on enabling identification and authentication, which reduces the need to have different usernames and passwords by using Zero Knowledge Proof cryptography and Distributed Ledger Technology (DLT) to issue, store and authorize for identification purposes without requiring detailed information. The goal is to prevent identify thefts while minimizing the current requirements needed to verify passwords by creating encrypted digital identities.
The second part to SoftBank’s partnership with TBCASoft is a blockchain-based platform for global or cross-border payments. For instance, a user can make purchases in Japan with U.S. dollars through mobile-based Rich Communications Services (RCS). The official press release was in September of 2018. Here is some more information on how it works:
“The PoC enables users to make a variety of in-store, mobile and digital purchases directly from their device. For example, a mobile customer based in Japan can travel to the U.S. and make a purchase supported by SoftBank and Synchronoss via RCS. In addition, the RCS global messaging standard can be used to send a payment, while the CCPS blockchain API enables the recipient to use an RCS-based messaging app or legacy messaging service to receive person-to-person (P2P) money transfers through the RCS wallet app.”
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