The 90,000 attendees at this week’s Mobile World Congress can be forgiven if they felt a sense of déjà vu. There was a lot of buzz at the conference about getting Big Tech to foot the bill for some of the cost of rolling out 5G, an outcome the telcos have been seeking for years.
Keynote speaker Thierry Breton, a former CEO of French Telecom who is now the European Commission’s official in charge of digital , kicked off the opening day by discussing the controversial consultation he launched last week to determine whether to grant the telcos’ request to make digital giants help contribute to the billions needed to build the 27-nation bloc’s future communications infrastructure, including next-generation 5G wireless and fiber-optic cable connections.
Telefonica CEO Jose Maria Alvarez-Pallete and Orange CEO Christel Heydemann also participated in the MWC opening event.Heydemann deemed the EU consultation a “first step” to address what she called an “unbalanced situation.”.”We call for a new European framework which would bring a fair contribution of large online traffic generators to connectivity requirements,” she said.
Instead of lobbying government to extract money from Big Tech telcos would be better off focusing on innovations that would allow them to add to their top line growth by playing a bigger role in the future of the Internet in areas like connected cars and the metaverse, MWC attendee and veteran industry analyst Richard Windsor said in an issue of his Radio Free Europe newsletter.
“There is far more upside to be had in contributing more than just connectivity to the provision of digital ecosystems to users than there is in appropriating the profits of the success of others,” wrote Windsor. “Hence, I think in the unlikely event that operators extract their ‘fair share’ from the digital ecosystems, they will end up losing even more in the long term.”
The Dutch government on Monday warned against imposing an Internet toll on tech companies, becoming the first EU government to criticize Breton’s consultation.It said such a move may breach Net neutrality rules and lead to price hikes for Europeans.
Content providers such as Netflix, which has arranged for its CEO Greg Peters to meet with Breton at the Barcelona conference, argue their firms already invest heavily in infrastructure. They say that paying additional fees will detract from investment in products that benefit consumers.
Windsor argues that legislation forcing big digital providers to fund 5G networks is unwise for other reasons.“In my opinion, the mobile operators want the digital ecosystems to subsidize their inability to create a digital ecosystem which I think is a terrible idea,” he said in his newsletter “The main reason why Big Tech is so good at monetizing mobile usage is that the operators failed to create thriving digital ecosystems of their own and left the door wide open.”
Failure To Execute
Operators such as Vodafone attempted to create their own digital ecosystems as far back as 2008. At that time, Apple had only a tiny piece of the market and the telcos already had an important relationship with its users. Apple and Google were much better at delivering enticing user experiences and engaging apps and services than anything that the operators had to offer, so the telcos lost out.“This was not because Apple or Google did anything wrong or unfair but because the operators allowed them to come in and undermine the relationship they had with their users,” notes Windsor.
The most extreme example of this was in Japan. NTT DoCoMo created a successful mobile Internet service called i-mode and had complete control of the handset value chain. But with the arrival of the modern smartphone i-mode needed to change to keep up. “NTT DoCoMo was unable to execute and as a result, it became a bit pipe very much like all of the other operators across the world,” says Windsor.
Attempts by mobile operators to reinvent themselves as entertainment companies, banks and more at MWC events over the last decade have all fizzled. The mobile Internet is now a giant industry. Most of the profits have either accrued to the digital ecosystem created by Big Tech or content providers or to the providers of enabling technology like Qualcomm, MediaTek and Arm, notes Windsor.
“The operators had every chance to create digital ecosystems of their own and reap similar profits, but they failed to execute on this opportunity,” Windsor says. “If the roles were reversed and the mobile operators had competitive digital ecosystems with good profitability and Apple and Google were merely handset suppliers, we would not be having this debate.”
New Opportunities
The smartphone is not the end of the digital ecosystem story as there are new device categories – such as the metaverse and connected cars- which are as wide open today as the smartphone was in 2008, says Windsor. Both of these will require good connectivity from the cellular network, meaning that the operators have a foundation from which to build.
The metaverse, the convergence of all new data technologies on 5G networks, including Extended Reality (XR)) to Internet of Things (IoT), Big Data , Cloud Computing, Blockchain, AI and more, was a major focus at MWC this year. In Orange’s metaverse demonstration, users were transported to a futuristic neon-hued universe with lightning bolts, giant robots and a falcon carrying a green orb in its talons. A dancing figure appeared, representing the movements of a real-life dancer wearing motion-capture gear.” It was a dazzling display,” noted an Associated Press journalist who visited the booth “ though what consumer purpose it had was not immediately clear.”
There are big opportunities to innovate in this new digital ecosystem, said Winston Ma, author of “Blockchain and Web3 – Building the Cryptocurrency, Privacy, and Security Foundations of the Metaverse” during a February 28 fireside chat with The Innovator’s Editor-in-Chief at 4YFN, an innovation- focused MWC event. For example, efforts are already underway to build alternatives to the Big Tech metaverse platforms. The technologies that will underpin the infrastructure for these alternative metaverses – which aim to safeguard user privacy and give consumers more control over their data – need to be developed as do the applications that will drive consumer engagement.
Operators should seize these new opportunities, says Windsor. But if they “ think that they will get a slice of the cake even if they fail to execute, then they will have no incentive to try,” he says. What’s more, he says it will also lower the incentives for new entrants if they know that they will have to pay a tax should they be successful in creating digital ecosystem for connected cars and in the metaverse.
“Operators should be doing everything that they can to ensure that they have a position in the provision of the digital ecosystems in these new categories,” said Windsor. If they don’t, history may repeat itself and telcos will likely end up as bit players not just in today’s digital ecosystems but in the Internet’s future.
IN OTHER NEWS THIS WEEK
BIOCOMPUTING
Scientists Are Developing A Biological Computer Powered By Human Brain Cells
Scientists propose to develop a biological computer powered by millions of human brain cells that they say could outperform silicon-based machines while consuming far less energy. The international team, led by Johns Hopkins University in Baltimore, published in the journal Frontiers in Science on Tuesday a detailed road map to what they call “organoid intelligence”. The hardware will include arrays of brain organoids — tiny three-dimensional neural structures grown from human stem cells — connected to sensors and output devices and trained by machine learning, big data and other techniques. The aim is to develop an ultra-efficient system that can solve problems beyond the reach of conventional digital computers, while aiding development in neuroscience and other areas of medical research. The project’s ambition mirrors work on the more advanced quantum computing but raises ethical questions around the “consciousness” of brain organoid assemblies.
METAVERSE
Car shopping from the comfort of your home could soon become easier with the help of immersive, interactive digital showrooms in the metaverse powered in part by ChatGPT, the groundbreaking generative AI platform, reports Axios.With their newly introduced “metaverse” dealerships, Fiat and Kia both hope to revolutionize the car-buying experience. The Fiat Metaverse Store, unveiled in January at CES, was developed in collaboration with Microsoft and software firm Touchcast. Customers can check out a vehicle’s attributes, ask the Fiat Genius questions and potentially even complete their purchase from home. The Fiat Metaverse store is currently available in Fiat’s home market of Italy, but it will expand soon to other countries, including the United States. Kia Germany has also unveiled a Metaverse store, which runs on Engage, a metaverse platform for business.
Colombia Hosts Its First-Ever Court Hearing In The Metaverse
On February 15, the administrative court of Magdalena – located in the Caribbean city of Santa Marta, in the north of Colombia – conducted a court session from the metaverse to hear a case against the Colombian Ministry of Defense and the National Police. The court magistrate, María Victoria Quiñones, accepted a direct request from the plaintiff to hold the public audience in the metaverse, which was also accepted by the defendant.During the hearing, Quiñones highlighted that the metaverse allowed for “a real interaction” and the use of the immersive technology aimed to make procedural cases more efficient, “as it allowed to bring people in the same virtual space, even when they were physically elsewhere – all without leaving aside the procedural guarantees and the principles of digital justice”.
MOBILITY
Race to Produce Cheaper EV Models Hurts U.S. EV Startups
Tesla will cut assembly costs by half in future generations of cars, engineers told investors on Wednesday, but Chief Executive Elon Musk did not unveil when it will debut a much-awaited affordable electric vehicle. The presentation was long on vision and a review of prior achievements, but short on specifics about any new Tesla products or services, causing the company’s stock to fall 5%. Meanwhile Reuters reports electric vehicle startups in the U.S., such as Lucid, Rivian, and Nikola are experiencing decreasing demand for their newer products. Reports from several firms indicate that potential customers are holding off on purchases or seeking better deals, which experts attribute to the availability of cheaper EV models from established automakers and price reductions by market leader Tesla.
Cisco Works With Mercdes Benz To Create Mobile Office
Cisco is working with Mercedes Benz to add its Webex conferencing tools to the dashboard of vehicles arriving in dealerships in the coming weeks, the company said on Monday, as it seeks to turn the car into a mobile office.The 2024 Mercedes-Benz E Class will be equipped with Wi-Fi and a cellular data connection, meaning drivers can download the Webex application to appear directly on the touchscreen of the vehicle’s infotainment system without needing a mobile phone.
CYBERSECURITY
White House Aims To Shift Cybersecurity Burden To Tech Providers
The Biden administration is promising to hold software developers and critical infrastructure to tougher security standards and apply more pressure on ransomware gangs as part of a national cybersecurity strategy released Thursday.A key element of the new framework involves shifting the burden of cybersecurity from individuals, small businesses and local governments and putting responsibility in the hands of software developers and other institutions with the requisite resources and expertise, reports CNBC.
