A full crew of analysts from S&P Global Market Intelligence 451 Research and Kagan attended the recent Mobile World Congress in Barcelona, the mobile industry event that has morphed into a full-out "techco" show, bringing together network operators, their traditional equipment providers, and an onslaught of IT vendors aiming to "cloud-ify" and "edge-ify" the traditionally stolid telco sector. In this report, our team shares their high-level takes on what they saw and what impressed — or failed to impress. Look for additional reports on vendor and operator developments, and news to come.

The term "techco" (technology company) was tossed around quite a bit at MWC Fira, but this time seemed closer to reality than wishful thinking. More than anything, the exhibition floor was proof of the transition. There were as many mammoth booths from IT vendors (albeit heralding their telco divisions) as network equipment makers. There were network topology diagrams highlighted by distributed and virtualized network elements and large language model "farms," as well as demos heralding 5G-enabled use cases from urban air mobility vehicles to AI-enabled robotic coffee baristas. The traditional telco industry — risk-averse, culturally challenged, proprietary network-saddled — has failed many times to make the leap beyond mere telco, but tomorrow's telecom sector is anything but traditional in its structure, technology, business/service model and ambitions. MWC 2024 felt like a starting line. We look forward to checking back at next year's show to see how it plays out.

AI: Wellspring of telecom hope?

Brian Partridge, 451 Research and Kagan Research, Head of Research

Artificial intelligence took over the MWC Fira, and this time the hype was justified. If there is one consistent message peddled at every Mobile World Congress, it is hope — that the next great technology, open platform, partner ecosystem, regulation, or API is going to finally break the operator doldrums of stagnant revenue, spiraling costs and racing to the bottom of interchangeable utility status. In one fell swoop, AI has ignited hope in a way that no other technology advance before it did, by providing tools to attack nearly every inefficiency and weakness.

Are jobs at risk? Yes, and that is a concern. It will not take the same number of staff or the same skill sets to run IT and networks in the AI era. Does the telecom industry need a large digital-transformation shot in the arm? Absolutely, and the AI wave provides a rallying cry, a forcing function, and a reason to lean in and leap forward. It is impressive how rapidly the mobile ecosystem has sprung into action: AI in the radio access network (RAN), AI to detect fraud in real time, AI to uplevel service experiences and enhance customer experience, and AI to replace apps on phones — all were a "yes" at the event. The telco-to-techco race will be fueled by AI.

Open RAN gets real

Eric Hanselman, 451 Research Chief Analyst

The Open RAN ecosystem has taken big steps forward, with performance trials finally showing parity with proprietary deployments, and vendor interoperability expanding. The lingering question is the extent to which operators want and are ready to take on the integration tasks needed to succeed with multivendor networks. With commitments from major operators, there is more momentum, but it is not clear whether the near-term goal is to build an open RAN, or be ready for it at a future date.

Operational improvements are needed to get to a fully cloud-native RAN as operators improve their orchestration skills and capabilities. Telcos have always had strong automation skills, but are typically focused on individual service orchestration. Getting to the scale, agility and speed needed for cloud-native operations means stepping beyond the brittle automation tooling that drives most deployments today.

Open RAN vendors were out in full force. Many had encouraging experiences, but more still needs to be done to bring together software and hardware to realize open RAN's full potential. RAN is not immune to the sway of AI, and the recently announced AI-RAN Alliance is an interesting consortium, not only to leverage AI in the RAN for optimization, but to explore edge monetization with AI workloads. This emphasizes the level of interest that exists in making 5G investments deliver better returns than what is being seen today.

Listen to our Mobile World Congress Review on the latest episode of our Next in Tech podcast.

Telcos, open APIs and programmable networks

Raul Castanon, 451 Research Senior Research Analyst

The GSMA Open Gateway initiative placed a spotlight on communications platform as a service and network APIs this year at MWC. In previous years, CPaaS had a strong presence at MWC; until recently, it was largely on the exhibition show floor. This year's opening keynote was called "Open Gateway – The Art of What's Possible," and featured remarks from GSMA Director General Mats Granryd and GSMA Chairman and Telefónica SA CEO José María Álvarez-Pallete, highlighting the rapid adoption of the Open Gateway initiative. Unveiled at MWC 2023, the initiative aims to streamline telecommunications networks and open them up to developers. In just 12 months, 47 operators have joined the project, representing 239 networks and over 65% of global mobile connections.

The shift to API-centric models represents a significant challenge for network operators, and there is still work to be done, particularly on the commercial side. From our interactions with technology vendors and network operators, it was evident that the business model, pricing strategy and use cases for several network APIs are still being developed. Nonetheless, its rapid adoption by network operators and its presence on the main stage show that the initiative is making strides. If API-centric models continue on this path, we believe they will have the potential to become a major milestone in the evolution of programmable communications.

Hybrid networks for enhanced connectivity

Mohammed Hamza, Kagan Research Principal Analyst

The growing role of non-terrestrial networks (NTNs) in connectivity was evident at MWC 2024. With spectrum and cost constraints around 5G affecting coverage, satellite providers are moving in. Using a mix of satellites in low (LEO), medium (MEO) and geosynchronous (GEO) Earth orbits, providers can serve high-throughput and low-latency connectivity, reach remote areas, and provide backup/redundancy to terrestrial networks, as well as support 5G networks, private 5G and internet of things tracking.

As mobile networks, the cloud, edge computing and IoT finally come together, vendors' and network owners' cooperation will deepen (including on topics like open RAN and network as a service), while pitting them against each other for direct access (via private wireless, for instance) to the enterprises and industries looking to benefit from advances in mobile.

Some MWC 2024 NTN highlights:

– SES SA showcased a partnership with Nippon Telegraph and Telephone Corp. that delivers a private 5G service with direct uplink connectivity to Azure cloud, and with edge compute capabilities backed by service-level agreements, to support (for instance) IoT telemetry using its medium Earth orbit satellites.

– Eutelsat Group is working with telecom operators to extend network reach via its GEO fleet and its recently acquired OneWeb low Earth orbit constellation. OneWeb is also working in Africa, and in Australia with Telstra Group Ltd. on mobile backhaul.

– Intelsat US LLC is avoiding direct competition with its telecom operator base. Its integrated satellite and terrestrial networks are enhancing connectivity, notably in Africa. South African telecom infrastructure vendor Openserve, owned by incumbent Telkom SA SOC Ltd., has picked Intelsat to improve network reliability, increase user throughputs and cut costs while serving remote areas nationally.

– Global service provider BICS is improving its connectivity services by adding satellite offerings. BICS noted the importance of narrowband IoT coverage, and how it employs Skylo Technologies Inc.'s GEO satellite network for direct connectivity for enterprise customers. Skylo is also using BICS to serve IoT NTN connectivity and roaming to partner mobile networks' enterprise customers.

– Standards help, especially with NTN alignment with 3GPP on 5G. Reinforcing these industry efforts, the GSOA (Global Satellite Operator Association) and GSMA formed a new alliance to promote deeper integration of mobile and NTNs, particularly in 5G, IoT connectivity, remote sensing and global coverage.

As 5G solidifies, 6G questions loom

Lynette Luna, Kagan Research Senior Research Analyst

The concept of 6G continues to be somewhat nebulous, given that carriers are still discovering what 5G can do. However, there was a sense of concreteness now that the World Radiocommunications Conference (WRC) has identified spectrum band candidates for 6G services. Specifically, WRC identified the 7.1 GHz to 8.4 GHz band as a future candidate, one that vendors and carriers are particularly satisfied with because it would allow operators to build 6G over the full bandwidth of these frequencies. Other high-frequency bands have been identified as well, but they are not ideal for 6G, given they do not have large contiguous bandwidth blocks.

WRC's allocation, however, will allow vendors to experiment with high-performing networks on very high-frequency spectrum, which presents significant power, interference and coverage challenges that today's technology cannot address. Several vendors demonstrated their solutions around the 6G opportunity. QUALCOMM Inc. showcased Giga-MIMO antenna array technology to enable mid-band-like coverage in 7 GHz to 16 GHz. Private-equity-backed companies like Digital Global Systems, Inc. and Finwave Semiconductor Inc. are tackling issues such as real-time dynamic spectrum sharing and using GaN-on-Si to address the combination of high-power transmissions in higher frequencies. Much to the chagrin of carriers, which are still digesting their investments and looking for new revenue streams for 5G, expect 6G to continue to make headlines as governments, associations and vendors look to bring to life a more solid vision of 6G.

For more from Lynnette, see MWC 2024: Operators putting hope in network APIs for revenue here.

IoT: Nowhere and everywhere

Rich Karpinski, 451 Research Principal Analyst

Prior to the pandemic, IoT opportunities, both consumer and enterprise, would have been front and center at MWC. In 2024 (and as several vendors echoed), IoT was nowhere and everywhere. Network-owning mobile operators continue to target the opportunity, particularly as an entry point into serving industry customers in verticals such as manufacturing, supply chain and automotive. Yet IoT as a business remains a slog, particularly for large operators that require new business units to quickly surpass a billion-dollar top line. Meanwhile, the IoT mobile virtual network operator (MVNO) sector continues to splinter and search for its footing, with even the largest, but still relatively small, players struggling in the public markets and challenged to grow beyond low-ARPU SIM card connectivity.

Change is afoot, even if below the surface. For starters, private 5G was a huge topic at MWC. What does private 5G do best but securely, and with quality-of-service guarantees, connect mission-critical industry endpoints: machines, assembly lines, robots, devices, sensors and more, which are all by definition IoT. Once collected, what is that data (and wide-area data collected via IoT low-power wide-area network connections) good for? It has always been leveraged in low-bit-rate fashion for meters, alarms and operations consoles; real-time indicators of performance and problems on factory floors; retail environments; and in-car dashboards. Now, all of the data is central to enabling today's hype-cycle kingpin, AI — aiding not only in the training of AI models but also providing essential inputs into AI inferencing and decision-making, much of which will (and must) happen at the IoT edge.

At the same time, the IoT-managed connectivity market appears on the edge of a shake-up. MNOs are spinning off IoT units or taking a piece of IoT startups. Those startups are also starting to feel their oats, with providers we visited with at MWC, like Soracom, Emnify and FloLive, moving firmly away from simply reselling wholesale IoT connectivity to building regional — or in some cases, globally distributed — cloud-native IoT network cores of their own, often colocated inside MNO datacenters. The result: more programmable IoT connectivity, delivered seamlessly across legacy-carrier country boundaries, and with insight into performance and reliability that purely MVNO IoT networks are challenged to deliver.

Vertical view: Connectivity enables the software-defined vehicle

Beatriz Minamy, 451 Research Principal Analyst

Software-defined vehicles (SDVs) captured attention from two perspectives:

In-vehicle connectivity. Automotive vendors shared visions of enhancing the customer experience by improving in-vehicle connectivity and enabling new services, including video streaming, gaming and faster over-the-air updates. Additionally, homogenizing operating systems across devices to create a smart ecosystem is becoming a trend. SDVs running AI applications for connected services, advanced driver assistant features and automated driving demand higher compute and data capacity, as well as robust wireless connectivity.

Off-vehicle connectivity. For supporting connectivity and compute, 5G connectivity initiatives from tier 1 and wireless carriers aim to deliver unique in-cabin experiences and create derivative revenue streams. On the vehicle-to-everything (V2X) side, communication standards and regulations continue to pose challenges because they differ across regions, although a market preference for cellular V2X (C-V2X) is emerging in terms of being the most compelling global proposition. C-V2X includes cellular link (Uu) for vehicle-to-network leveraging private 5G networks with MEC (multi-access edge computing) and direct link (PC5) for vehicle-to-vehicle, vehicle-to-pedestrian and vehicle-to-infrastructure uses cases. SDVs equipped with V2X capabilities play a crucial role in enabling the smart city ecosystem by providing real-time transit data and enhancing intelligent transportation systems. Automobile original equipment manufacturers, network providers, cloud companies and other ecosystem partners continue to invest in testing their technologies to bring them to real life; however, the full realization of smart cities, and the enabling role of V2X, is a long-term project.

Vertical view: Fraud dominates operator fintech focus

Sophia Furber, 451 Research Analyst

From a fintech and payments standpoint, the fight against financial crime was a major theme at this year's Mobile World Congress. Given the number of scams that start with a call or SMS to a victim pretending to be their bank, this is an obvious area for players in the fintech and telco ecosystem to join forces in the name of consumer protection. We saw a proliferation of fintechs in the antifraud space on the show floor, providing everything from liveness testing to combating deep fakes to transaction monitoring, to help banks and fintechs pick up on patterns of activity that could indicate money laundering or trafficking.

For the second year in a row, the major payment networks, processors and business-to-consumer fintechs had a pared-down presence at the event, although JP Morgan Payments and China's Alipay bucked the trend with large booths. Hype around blockchain in financial services had mellowed into more practical conversations at this year's MWC. Live use cases that were talked about at the event included stablecoin-based remittances on the consumer side, and wholesale cross-border payments and asset tokenization on the business-to-business side.

^{This article was published by S&P Global Market Intelligence and not by S&P Global Ratings, which is a separately managed division of S&P Global.
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