EY World Mobile Congress 2014 predictions

20 February 2014

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The World Mobile Congress is due to start next week bringing together business leaders to debate the future direction of the industry.  Adrian Baschnonga, Lead Analyst for Global Telecommunications at EY, makes his predictions for the week ahead:

“Mobile World Congress is the leading annual event for the mobile industry and comes at a time when the sector is facing new disruptive technologies, fast-changing consumer demands and uncertain regulatory standpoints.”

Over-the-top titans

“Facebook’s acquisition of WhatsApp will be the major talking point, with the social media giant eager to take advantage of the messaging app’s young, international and fast-growing user base.

“WhatsApp has rewritten the world of instant messaging, consigning SMS to also-ran status in the age of the smartphone. A host of new chat and virtual assistant apps will be on show at the Congress – whether any one of them can reach the heights of WhatsApp remains to be seen.

“Ultimately, how mobile operators live alongside the new technology giants of the mobile internet will dictate the future of the industry – the worrying prospect of operators being denied growth opportunities by new technology brands remains as real as ever.”

Devices evolving in new directions

“Wearable technologies will be the device trend to watch at this year’s show. Specialist manufacturers have done much of the early running in smart watches and fitness trackers, but the leading global vendors all aim to take a lead in this fast-growing segment.

“Plenty of attention will also focus on alternative smartphone operating systems. Last year, the focus was on the Firefox and Ubuntu operating systems, and more OS announcements are on the cards this year as industry watchers ponder whether newcomers can take advantage of the ongoing smartphone boom to shake up the ecosystem.

“As ever, a slew of flagship products will be unveiled by leading vendors. As the high-end smartphone market becomes more crowded, vendors are under growing pressure to provide new types of user interface, such as gesture recognition.”

The Internet of Things is coming of age

“With new device form factors signalling plenty of innovation in the consumer and enterprise markets, attention is likely to focus on the smartphone’s growing role as a hub in the Internet of Things.

“Meanwhile, there will be interest in how machine-to-machine services are evolving, with connected car services and smart home appliances now starting to mature. Cross-sector partnerships will provide an important platform for growth as a number of industries look to capitalise on mobile technology.”

A new wave of mobile payments services

“We expect mobile payments to be one of the big topics. Operators are ramping up their partner ecosystems but emerging technologies – from bluetooth low energy to hosted card emulation – are appearing thick and fast, creating a fragmented technology landscape that may hinder mass-market adoption.

“Mobile payments itself is becoming part of a wider service mix that also includes location-based marketing, shopping and discovery services. Mobile operators, banks, retailers, internet giants and technology specialists all have overlapping ambitions in this space, and business models remain unclear despite high-levels of cross-industry collaboration.

“Consumers require greater reassurance on the benefits of new services, while security concerns are still a very real barrier to take-up. Although the long-term shift to digital payments is clear enough, the sheer pace of innovation has created an overcrowded market.”

Regulatory questions on consolidation

“The telecoms sector is back in megadeal territory, but industry leaders want more clarity on regulatory attitudes to consolidation and cross-border services. Europe remains highly fragmented compared to the US, which now leads the world in take-up of 4G services.

“While the EU has proposed single market reforms, operators want greater levels of certainty on a number of interconnected policies – from consolidation and spectrum release to net neutrality – particularly in light of the high levels of infrastructure investment required to support demand for mobile data in a highly competitive market.”