As usual, the Mobile World Congress (‚ÄúMWC‚Äù) took place in Barcelona at the end of February with more than 100,000 attendees. Several themes which had been in evidence in 2014 and 2015 were prevalent again this year, for example constant connectivity, wearables, mobile health and the Internet of Things (‚ÄúIoT‚Äù).
Other focus areas during this year‚Äôs 2016 MWC, as expected, centered around the autonomous car and virtual reality (‚ÄúVR‚Äù) and also the infrastructure layer around 5G and cloud-based services. ¬†¬†Facebook attracted a lot of attention with its VR solution Oculus Rift (created in collaboration with Samsung), and also around its efforts to bring mobile connectivity to the remaining billions of people in the world through the Telecom Infra Project, where the company is collaborating with operators and manufacturers to develop new methods for building cheaper mobile networks, facilitating ‚Äúfree‚Äù connectivity.
Industry collaboration was a frequent theme at MWC as the world is getting more integrated, and increasingly often several technologies are combined into new solutions and the cost of manufacturing is¬† driven lower. As a prime example, Ericsson and Cisco continued to highlight their strengthened strategic partnership for end-to-end solutions and Ericsson also announced a cloud collaboration with Amazon. This development will not only result in continued strategic partnerships within the communications industry but also across different industries, for example among the several car manufacturers present at the event, and a general increase in M&A activity in the technology area.
IoT is facilitated by technology developments such as hardware miniaturisation, constant wireless connectivity and cloud computing power at low cost, which enable new business models and transform today‚Äôs industries. As an example, the driverless car is more than just a consumer feature, as it will challenge today‚Äôs car manufacturing industry and service models and create totally new business models. Correctly positioned, today‚Äôs manufacturers can be a part of the new service solutions even though they might sometimes lose their direct contact with the end user ‚Äì similar to what happened in the mobile phone industry where operators rather than manufacturers often have the most extensive end user relationship (an obvious exception being Apple).
The rise of IoT, cloud-based services and 5G provides operators with opportunities for new revenue streams, but will require service agility and new network buildouts with a cloud-driven approach. In this race, there is a risk for operators of being challenged by over-the-top (‚ÄúOTT‚Äù) services that take advantage of these developments. The adoption of IoT in businesses will also require further standardisation. The two standards bodies for connected industries, Plattform Industrie 4.0 (Germany) and Industrial Internet Consortium (USA), recently announced that they will cooperate, which could be seen as a first step towards ¬†unified standards for industrial IoT.
The connected evolution is raising new questions around ethical rules, digital integrity and security, as well as user behaviour adoption. As always in the evolution of technology, the initial hype and inflated expectations will move into a reality-check phase before broader market adoption and real revenues materialise.
Once real revenues materialise and the IoT industry grows, we anticipate there being significant opportunities for our growth debt and pre-M&A and pre-IPO debt solutions.