Editor’s note: International communications and network consultant John of UK-based Strand Consult, speaks out about all the 5G next generation wireless related talk he heard at the recent Mobile World Congress in Spain.

BARCELONA – Attendees to MWC found plenty of content on the popular buzzwords: Internet of Things, AI, blockchain, robotics, small cells, 5G and smart cities. There was reminiscent of the 3G hype that failed to live up to expectations.

Strand Consult prefers a sober, objective approach to look at 5G from four angles:

  • Technological developments – what happens when;
  • Distribution – how should these solutions be marketed and sold;
  • Business models – how to earn money;
  • Regulation – how does regulatory policy affect the possibilities of marketing, selling and earning money on these solutions?

Strand Consult has studied 5G closely well beyond MWC. While it is clear that 5G will be exciting, it is less likely that mobile operators and infrastructure providers will be in a position to monetize the value created. The largest value creators will likely be the makers of connected devices and companies that create services on top of the mobile network. In many areas, this is reminiscent of the migration from feature phones to smartphones in which the value was realized by the phone makers (Samsung, Apple and others) and those offering the services used on the phones which were purchased in the app store.

Mobile operators and infrastructure providers are less likely to experience ARPU growth and increased CAPEX in the coming years. Competition on infrastructure is so tough and has been so tough for many years, which makes it hard to expect many good news from infrastructure providers who find it difficult to earn money.

At Strand Consult we have focused on a large part of these challenges over the last 5-10 years. These are the things that are the foundation for mobile operators and infrastructure providers to realize the 5G dream that will connect billions of devices to the internet. In any case, the will be no 5G to speak of if infrastructure is not built. That’s why Strand Consult focuses on 10 Steps to reduce cost for mobile infrastructure and improve regulation. In connection with our project The experienced mobile coverage – what is bogus and what are the facts? we have looked at how to measure and secure access to good infrastructure. In connection with How to become a successful MVNE we have looked at how operators can build efficient distribution in the 5G market through partnerships. When it comes to policy and regulation, we offer extensive knowledge on net neutrality and training with our workshop Next gen telecom policy and regulation – Workshop for leaders in the telecommunications industry

Looking at what happened at CES in Las Vegas in January combined with what was said at MWC, it is clear that the smart life does not require new hardware. It is fascinating to see the market flooded with products thatconvert old hardware to intelligent hardware. Visit Best Buy  and Home Depot and search for Google Home and Alexia and see the hundreds of products that combine old hardware with new technology. See how Ikea has launched intelligent lighting systems compatible with Google Home and Alexia.

You can turn your 20 year old vehicle into a smart car with on board diagnostics (OBD2) and a mobile app, available from Amazon. Check out AutoPi solution that lets you talk to your car as if it were KITT from from the classic Knight Rider. The sales figures of Google Home and Alexia suggest that consumers already buy and use these Internet of Things, AI, and Smart Home solutions.

The price for connecting devices to the network is marginal. At MWC, T-Mobile launched its IOT offer with a flat price for a SIM card that lives for 10 years. Other operators launched similar concepts and before IOT has grown, the price of connectivity will probably come down to about €1/device/year. At this price, many new devices will need to come online before operators will be able to realize a business case that makes shareholders happy.

Many at MWC talked about the market power or Amazon, Facebook, Google, and Apple; the need for regulation; and how net neutrality and privacy regulation are being being applied as platform regulation. The big internet companies tried to protect their business models by advocating for hard net neutrality. Now they reap what they sow: the boomerang of regulation is coming back to hit them.

There is exciting technology in 5G small cells which is compatible with a variety of networks. There are many interesting products for fixed 5G and 5G small cells, already being deployed in the US, but alas not in the EU, which continues to fall behind. However small cell networks require a paradigm shift in thinking about cost and deployment, particularly for pole attachment, backhaul and power consumption. There is a race now for cities to become test beds for the technology and how some cities will lose out. In the research note The Mayor From Hell: San Jose, California’s Sam Liccardo. How greedy politicians prevent good mobile coveragewe have described the challenges that operators face when deploying 5G.

Most MWC attendees are European and most agreed that the EU is behind the US and East Asia (China, Japan, and South Korea) when it comes to 5G. One will not find 5G business cases nor success stores in Europe. Europe was once a leader in high technology for mobile infrastructure, devices, and services. But is gone, just like so many other industries which have fled the continent that has become toxic for investment, innovation, and entrepreneurship.

While MWC was long on hype, it was short on discussions of the value chain, business models, and regulatory policy. These are the issues about which investors care about, but which MWC did not address. Simply put, money makes the world go round and we are still waiting for MWC to “show the money” on the mobile telecom industry.

Read more at Strand’s website.

About the author

John Strand founded Strand Consult in 1994. Its first focus was optimizing the sales process and reducing cost for companies in the IT, Telco and Media industry. John had already built successful consulting company providing sales and marketing services for the Telecom, It, Finance and Publishing sectors. The mobile industry exploded in the 1990s, and Strand Consult grew along with its new clients from the mobile industry, analyzing market trends, publishing reports and holding executive workshops that have helped telecom operators, mobile services providers, technology manufacturers all over the world focus on their business strategies and maximizing the return on their investments.